Sometimes a stock will break out, but then not make much progress. Within a few hours, days or weeks, it dips just below the buy point, which remains valid. Netflix (NFLX), Citigroup (C), Verizon Communications (VZ), Delta Air Lines (DAL) and MGM Resorts International (MGM) are all just below buy points after pulling back from breakouts.
Netflix cleared a 195.05 cup-with-handle buy point on Oct. 5. Shares held above that level for several weeks, finding support at their 50-day moving average for several weeks in November. But Nov. 29, Netflix shares tumbled that old buy point and their 50-day. Shares drifted lower for a few days before edging higher over the last four sessions to end the week at 188.54.
Netflix’s chart is complicated. Technically, the 190.05 buy point is still valid, but it lies below the 50-day line, which is modestly above 193. Netflix also has a new flat base with a 204.48 entry.
Citigroup
Citigroup cleared 76.24 flat base, really a base-on-base formation, on Dec. 4, but then fell for the next three days. Citigroup climbed 1% to 75.71.
JPMorgan Chase (JPM) and Bank of America (BAC) are both extended from recent breakouts.
Verizon Communications
Verizon cleared a 51.28 V-shaped bottoming base on Dec. 4, but then fell for the next three sessions. The Dow industrials component rose 1.3% to 51.09 on Friday.
Delta Air Lines
Delta Air Lines cleared a 54.16 cup-with-handle entry intraday on Dec. 4 and Friday, Dec. 8, but was unable to close above that level.
Delta reported strong November traffic on Dec. 4, with Southwest Airlines (LUV) and United Airlines (UAL) raising key revenue guidance later in the week.
MGM Resorts International
MGM Resorts broke out past a 33.69 cup-with-handle buy point on Nov. 24, but since then has moved back and forth from that entry. Shares fell through their 50-day line on Dec. 6, and closed Friday at 33.18.
MGM’s Relative Strength line has been lagging for the past several months, reflecting the stock’s underperformance vs. the S&P 500 index.
MGM Resorts is less exposed to Macau, the world’s biggest gambling market, than Las Vegas Sands (LVS), Wynn Resorts (WYNN) and Melco Resorts (MLCO). Those 3 casino stocks are all extended from recent breakouts.
