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The Market Has Been Like Watching Paint Dry

ByDragonfly Capital
AuthorGregory W. Harmon
Published 09/13/2012, 02:51 AM
Updated 05/14/2017, 06:45 AM
SPY
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SHW
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RSI
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VAL
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It has been sooooo slow the last few days. The S&P 500 SPDR (SPY) has traded in a 1pt range for 4 days. It is like watching paint dry. Which got me thinking. What has been going on with that market darling in the "Paint space" Sherwin Williams (SHW) headquartered about 5 miles down the road.

As seen in the chart below, the 12 month uptrend from last September is leveling now with a narrow consolidation area between 141.50 and 145.50. The Relative Strength Index (RSI) rolling lower suggests a downturn and the Moving Average Convergence Divergence indicator (MACD) running negative agrees. But the RSI is still in bullish territory so this could work itself out over time and then move back higher.

Sherwin Williams (SHW)
SHW
Alerts to buy the break of the channel higher or short the break lower seem the best preparations. Look for about a $4 initial move either way once it is broken. Seems like the market makers are not using Sherwin Williams paint. But looking deep into the sector, to the other paint name Valspar (VAL) points to the action. It broke a double top higher last week, consolidated and is moving higher again.

The target from the initial break takes it to 62.30 so there is still plenty of upside to it and with volume increasing, the RSI bullish and rising and the MACD increasing, all looks good. Use the 55.70 area as a stop and maybe instead of watching paint dry you will be painting the town red!

Valspar (VAL)
VAL
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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