DISNEY AND FOX SURGE TOGETHER -- TIFFANY BREAKS OUT WHILE NIKE CONTINUES TO RUN -- DELTA AND SOUTHWEST CLIMB TO NEW HIGHS
DISNEY AND FOX SURGE ... The announcement that Walt Disney was buying $66 billion worth of assets from Fox sent both stocks surging today. And they helped make cyclical stocks the day's biggest gainer. Chart 1 shows Disney (DIS) surging more than 3% to the highest closing level since May (and in heavy trading). Chart 1 also shows Disney having recently risen above its 200-day average and a falling resistance line extending back to its April peak. Chart 2 shows 21st Century Fox (FOXA) climbing more than 6% to the highest level in nearly three years. That stock had just broken through overhead resistance formed in the spring (see circle) to achieve a bullish breakout. Judging from today's buying, investors seem to like the deal.
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Chart 1
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Chart 2
NIKE AND TIFFANY ALSO LOOK STRONG... Two retail stocks are looking a lot stronger. In the specialty retail group, Chart 3 shows Tiffany (TIF) jumping 3% to the highest level in three years. in the footwear group, Nike continues to look strong. Chart 4 shows Nike (NKE) climbing to the highest level in two years. Both of their relative strength ratios (top of charts) are just starting to emerge from a yearlong period of underperformance.
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Chart 3
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Chart 4
DELTA AND SOUTHWEST AIRLINES TOUCH NEW RECORDS ... Airline stocks also had another good chart day. Chart 5 shows Delta Air Lines (DAL) on the verge of closing above its July peak to reach a new record high. Its relative strength ratio (top of chart) is nearing an upside breakout of its own. Chart 6 shows Southwest Airlines (LUV) touching a record today as well. Its relative strength ratio has risen to the highest level in five months.
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Chart 5
