Headlines
- Nucor Falls Back to Breakout Zone
- Danaher Bases and Breaks Long-term Resistance
- Pfizer Renews Uptrend with Surge off Support
- Northrop Grumman Corrects after New High
- Norfolk Southern Breaks Channel Line
- AES Tests Gap Zone with Bull Flag
I will update the Market Regime page later today.
Previous Reports Covering Stock Trends, Setups and Breakouts
November 5th [1]: XLP, COST, CSX, HEI, CSX, ETR, and XEL
October 29th: [2] CDNS, TSLA, BURL, NEM and FCX
October 22nd: [3] CRWD, PANW, SARO, VEEV, ITB, XHB and HD
October 15th: [4]ADM COST TT EMR NTAP and IOT
October 8th [5]: AVGO, CRWD, WMT, AMGN, INCY, COR and CAH
Nucor Falls Back to Breakout Zone
Nucor (NUE) is steel stock that is part of the Materials SPDR (XLB) and Metals & Mining SPDR (XME). XLB is a lagging sector because of the chemical industry, but XME is a leading group with a 65% year-to-date gain. The DJ US Steel Index ($DJUSST) is also leading with a 24.6% gain this year.
Nucor is in an uptrend with price above the 200-day SMA and this key moving average turned up over the last few weeks. Most recently, the stock formed a wedge correction into mid October and broke out with a surge in late October. This move pushed the stock price above its August peak for a higher high. After becoming short-term overbought, the stock fell back to the breakout zone with a throwback that retraced around 61.8% of the prior surge (blue shading). I view this as a test of the breakout – and a trading opportunity. This is an area to watch for firming and a short-term upside reversal. A close below the 200-day SMA would call for a re-evaluation of the long-term uptrend.
Danaher Bases and Breaks Long-term Resistance
Danaher (DHR) is part of the Healthcare SPDR (XLV). The company provides products and services to the life sciences industry (biotechs). Healthcare has been a leading sector over the last few months and biotechs are strong as a group.
Danaher is lagging in 2025 because it is down year-to-date, but the stock sports a multi-month base and breakout. DHR hit new lows in April, worked its way higher into August and then fell back in September. The September low held above the April low and I view this six month period as a basing process. DHR then broke resistance with a strong surge above 220. This breakout signals the start of a long-term uptrend. Most recently, DHR fell back into early November with a throwback to the prior resistance zone, which turns support. I view this as a pullback after the surge from 180 to 235. Such pullbacks provide a second opportunity to partake in the bigger breakout. A close below 200 would call for a re-evaluation.
Plan your Trade, Trade your Plan and Diversify
There are two ways to approach these short-term setups.
First, trade them as swing trades. A falling flag or wedge breakout is bullish and this signal remains valid until a break below the re-evaluation level, which is usually the low just before the breakout. For short-term trading, I usually set a profit target and close one third to one half of the position when this target is reached. A trailing stop is then placed to ensure that the entire trade does not result in a loss.
Second, use short-term setups to participate in the bigger uptrend. Bullish setups stem from short-term oversold conditions, falling wedges/flags or pullbacks. Instead of a re-evaluation level, the exit signal is based on a long-term trend change and a trend-following exit. Signals include a cross below the 200-day SMA, a major support break, a Chandelier Exit or a Keltner Channel break. This means the potential loss will be larger, but there is also a possibility to take part in an extended uptrend.
Thus, plan before making the trade, and then trade according to that plan. Also consider position sizing and diversification to spread the risk.
Pfizer Renews Uptrend with Surge off Support
Pfizer (PFE) is a big pharmaceutical that is part of the Healthcare SPDR (XLV). Technically, the stock has been trending higher since the breakout in early June. This was the first higher high. Since this breakout, the stock forged higher lows and surged to a higher high in early October. This surge did not last long as the stock fell back towards the September lows in mid October. Price managed to firm in the 24 area, which is just above the big support zone in the 23-24 area (blue shading). More importantly, PFE held just above this zone the last few weeks and surged above short-term resistance on Tuesday. This breakout reverses the short-term pullback or downswing. It also signals a continuation of the bigger uptrend. A close below 23 would warrant a re-evaluation.
Northrop Grumman Corrects after New High
Northrop Grumman (NOC) is part of the Industrials SPDR (XLI) and the Aerospace & Defense ETF (ITA), which is clear leader in 2025 with a 45% gain. On the price chart, NOC broke out with a surge in July and continued higher with another surge into early October. The stock then fell back to the prior resistance zone (blue shading), and this zone turns into support. Also notice that the pullback retraced 38-50 percent of the prior advance, which is normal for pullbacks within bigger uptrends. The bottom window shows %B almost touching the zero line. This indicator becomes oversold with a dip below zero. Sometimes, however, we only get a moderately oversold condition. Overall, I see a bullish setup on the chart: long-term uptrend, short-term almost oversold and support zone. A falling channel defines the pullback and a breakout at 580 would reverse this short-term slide.
Norfolk Southern Breaks Channel Line
Norfolk Southern (NSC) is a railroad stock that is part of the Industrials SPDR (XLI) and the DJ US Railroad Index ($DJUSRR). NSC is a leader here because it hit 52-weeks highs in July and September. The stock broke a resistance zone in July and this zone turned into support in August-September (blue shading). After another push higher in the second half of September, the stock fell back towards support with a falling channel into early November. NSC firmed in the 280 area for two weeks and broke short-term resistance with a pop over the last three days. I view this breakout as short-term bullish. It signals an end to the correction and a resumption of the bigger uptrend. A close below the August-September lows would call for a re-evaluation.
AES Tests Gap Zone with Bull Flag
AES is an electric utility that is part of the Utilities SPDR (XLU), which is a leading sector. On the price chart, the stock found support in the 9.5 to 10 area from February to June and broke resistance with a surge into July. This move also broke the 200-day SMA and signaled the start of a long-term uptrend. AES then corrected into September and broke out again with a gap at the beginning of October. The stock then fell back to the gap zone with a falling flag into November. I view this flag as a short-term bullish continuation pattern that marks a small correction. AES bounced with a move above 14 last week and broke the flag line. This signals a continuation higher. I would re-evaluate on a close below the 200-day SMA. In other developments, the middle window shows the price-relative moving higher since July as AES shows relative strength. The lower window shows %B dipping below zero to become oversold after the flag formed. Thus, we have a classic setup: long-term uptrend, short-term oversold condition and bull flag.
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