Coronavirus fears are ramping up and misinformation is everywhere.
It’s times like these where monitoring the price action is particularly helpful.
Here are 5 stock charts I’m watching to better understand how this really is affecting the investing landscape.
China A-Shares via ticker ASHR have quickly fallen to an old pivot area and into key longer term moving averages. Given how aggressively price gave back the 2019 high, there’s a possibility this turns into a significant headwind in Chinese markets for the coming months.
The performance of this market will either be a guide to the seriousness of the coronavirus fears, or point to another catalyst / underlying issue.
That said, the recent uptrend remains intact until the prior swing low 26.90 is taken out.
Another barometer for coronavirus fears I’m watching is the US travel industry. There has been some good action in the group and it’s worth monitoring to see if this area holds key price support.
Here are just a couple of examples:
JetBlue broke a 4 year downtrend on earnings last week. If price action remains strong and holds the breakout, either the Coronavirus situation isn’t as bad as feared OR this is a very strong stock moving forward.
The US Hotels Index recently broke to new highs. For now the pullback is picture perfect and we’ll just have to see if it remains so. The 2100s is a pretty clear area to note. This is a very similar situation to JetBlue where Coronavirus fears could set up a buying opportunity if it doesn’t get out of hand in the US.
Junior Gold Miners via GDXJ have traded very well over the last year breaking out of a multi year consolidation. While global stocks have rallied, GDXJ has formed a potential cup and handle pattern. Over the recent high area ~43.50 we can target that 2016 high area ~49-50.
Copper has also quickly sold off. All of a sudden all recent progress has been lost and it’s trading below all major moving averages. 2.60 is the swing low worth watching.
We have no way to tell the future, but these charts should provide some solid hints in the coming weeks.
Thanks for reading. Trade ‘em well!
Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.