From the desk of Tom Bruni @BruniCharting

Given our expectation of a choppy market environment over the coming weeks and months, we're focusing on areas of relative strength/weakness.

Canadian Telecom stocks are hitting new all-time highs on an absolute basis, presenting some new trading opportunities on the long side.

From the desk of Tom Bruni @BruniCharting

New Mystery Chart!

For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it's a custom index or inverted, who knows!

We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.

You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?

In this quick post, we're looking at two widely-followed stocks that we want to be avoiding, each for their own, but similar reasons.

Let's get into it.

From the desk of Tom Bruni @BruniCharting

Thank you to everyone who responded to this week's mystery chart.

No mixed opinions this week, almost everyone saw the pullback into support as a successful breakout retest and was a buyer.

With that as our backdrop, let's take a look at this week's chart. 

We've gotten a few questions about the stock, Spencer's Retail Ltd., since it rallied more than 50% over the last few weeks on news of a large shareholder building a position.

The question now is, can this run continue and how do we define our risk if involved in the stock?

Let's take a look.

From the desk of Tom Bruni @BruniCharting

New Mystery Chart!

For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it's a custom index or inverted, who knows!

We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.

You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?

From the desk of Tom Bruni @BruniCharting

My big question coming into this weekend was what should we make of the action in Utilities lately and what does it mean for Bonds?

Utilities are making new all-time highs on an absolute basis, posing this question on Twitter: "So is the breakout in Utilities to new all-time highs a signal that a Bond breakout is coming, or is it simply a bi-product of overwhelming demand for Equities?

This got a lot of attention and responses, so I thought it'd be worthwhile to quickly outline what I'm watching in Utilities and the Bond market over the next few weeks.

Yesterday's candle in most of the major indices was a "Bearish Engulfing" candle, which is a short-term reversal signal when it comes in an uptrend.

In today's post, I want to bring that development to your attention and explain what it means within its longer-term context.

Roughly 2 months ago we outlined why there was potential for strength and outperformance from the Nifty Pharma sector and its components.

We've gotten some nice moves since then and given the rotation we're seeing in other areas of the market like Consumer Goods and Technology, the charts are suggesting Pharma stocks are getting ready to accelerate to the upside.

Here's the Nifty Pharma Index, which confirmed a failed breakdown and bullish momentum divergence by closing back above support near 8,000. That defined our risk on the long side and skewed the reward/risk very much in our favor. It's worked well so far and we're now seeing prices accelerate off support and towards our 10,300 target.

Click on chart to enlarge view.

From the desk of Tom Bruni @BruniCharting

In late August we started to see some signs of a potential bottom forming in Commodities as they approached long-term support with momentum diverging and in October we finally got a breakout.

Today that breakout in the Thomson Reuters CRB Commodity Continuous Index remains intact and the trend in Commodities as an asset class has shifted from one we want to be selling rips to one that we're buying dips.

From an intermarket perspective, there are a lot of signals we've discussed that support higher Commodity prices such as the AUD/USD and CAD/USD breakouts, and today I want to share three more data points that have shown up in the last few weeks.

The Large-Cap indices continue to churn near the highs as Mid and Small-Cap stocks play catchup. Sector leadership remains clear, but we're now beginning to see signs that a former leader turned laggards may start heating up again.

Earlier this week we looked Consumer Goods before they broke out and Technology looks to be showing similar signs of buying pressure.

Let's take a look.

Here's the Nifty IT Index attempting to break back above 16,200 resistance as momentum finally breaks back into overbought territory. If prices can break decisively above resistance then this long-term uptrend could accelerate and target 18,775 over the next few quarters.

Click on chart to enlarge view.

From the desk of Tom Bruni @BruniCharting

Thank you to everyone who responded to this week's mystery chart.

A lot of mixed responses on this depending on their timeframe. Some were shorting the failed move and seeing how it developed, while others were patiently waiting for another breakout attempt to get long.

With that as our backdrop, let's take a look at this week's chart.