Tech Talk: Two Stocks And A Golden Cross
It’s generally the case that the charts of two similar companies look much alike. This makes sense, since similar businesses reflect the same economic environment.
Based on that intro, take a look at the charts that begin and end this column. TD Ameritrade at the top, and E*Trade Financial at the bottom have both breached a reasonably drawn red-green support/resistance lines. The blue parabolas show double bottoms for both stocks, with both reaching their nadirs in February and July. Both gave buy signals (PPO line) last July. Most importantly, both seem to have broken out last week, when the intersection of the 200-day moving average moved up through the 50-day moving average. I have marked this “”golden cross,” as it is often called, with an X in both charts. Moving up through their June highs means both are trending higher.
Here’s a bit of fundamental information on the two companies, which help to explain these moves. AMTD net income grew by 25.50 per cent year over year, to US$0.45 per share during the most recently completed quarter. By contrast, ETFC’s net income declined by 51.67%, year over year, to US$0.48 per share. The respective charts have account for these relative changes in performance. (Compare the first decline in E*trade’s double bottom to the one I drew for TD Ameritrade.)
Enjoy the charts, but do your own research. I own shares in both companies, but I don’t have a clue whether they would work in anyone else’s portfolio.
Disclosure: None.