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Interactive Brokers Group Traces A Bearish Harmonic

Published 04/09/2014, 01:53 AM
Updated 05/14/2017, 06:45 AM
ETFC
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SCHW
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IBKR
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My assessment is purely based on the price action on the weekly charts. Take a look.

The chart for E-TRADE Financial Corporation (NASDAQ:ETFC), although it has a cool symbol in its name is pulling back from a top 3 weeks ago. The current week may print a doji, signalling indecision, if the current action keeps up, but the Relative Strength Index (RSI) is falling at the mid line and the MACD has crossed down. With the 38.2% retracement of the move higher still far below, it needs to prove it wants to change direction.

ETFC Daily Chart

The Charles Schwab Corporation (NYSE:SCHW), is in the same boat. Testing the bottom of a rising channel, but with the RSI making a lower low and the MACD crossed down and continuing to fall. You could try it long here on a tight stop around 25.25 looking for a bounce at the channel, but again, I would prefer some proof or a reversal.

SCHW Daily Chart

Interactive Brokers Group Inc (IBKR.O), chart is a stark contrast. Having pulled back and made a double bottom, the price action is actually tracing out a bearish Shark harmonic, but with a Potential Reversal Zone (PRZ) above at 24.52. The RSI has found a bottom and is rising and the MACD is leveling after the pullback. If you want a brokerage stock, Interactive Brokers should be the one. Maybe they will give me some free trades for this? 

IBKR Daily Chart

Disclaimer: The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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