Virtual reality is coming! Virtual reality is coming! (Apologies to Paul Revere and Alan Arkin.) The next new thing has arrived, but from a technical analysis perspective, VR doesn't look like it will be a boon to every company involved.
I'm taking a look at two of these five stocks -- one whose chart I like, and another that I want to stay away from.
In this daily chart of GoPro (GPRO) - Get Report , we changed the scaling to "log" from arithmetic to give it some amplitude. GPRO has been in a downtrend the past year with only limited bounces. Prices are below the declining 50-day average and the declining 200-day line. The on-balance-volume, or OBV, line has been in a steady decline, telling us that sellers have dominated with more volume traded on down days.
With no recent bullish divergence on this chart and no sustained accumulation (like from a rising OBV line), GPRO may have to face more R than VR.
Sony (SNE) - Get Report is another player in the realm of VR. The daily chart of SNE is a world away from GPRO. Here prices have gone sideways the past 12 months, but within this neutral trend is a possible inverse head and shoulders pattern. The left shoulder is back in August/September. The head was made in January and February, and the right shoulder was completed this month. Use your imagination and put in a "neckline" across $27 with a slight downward slant.
Volume has increased as we moved through the pattern, and this is what we want to see. The OBV line turned up strongly in March and just made a new high for the move up. This new OBV high could be foreshadowing a new price high. And we should not forget about the golden cross of the 50-day and 200-day averages this month.
This weekly chart of SNE shows prices above the flat 40-week moving average line. The OBV line on this timeframe is neutral, but that could change soon. In the bottom panel is the MACD oscillator, which is just giving a go-long signal as it crosses back above the zero line.