A number of asset managers have struggled this week as Q2 earnings have proved less than fruitful. By scanning for stocks making new three-month highs, I was able to identify one asset manager that has diverged from the rest. The charts of Apollo Global Management (APO) feature strong trend characteristics, improving relative strength, and supportive volume readings. We’re inclined to assume this uptrend has much further to go. The daily chart of APO features an inverted head and shoulders bottom pattern, formed by a major low surrounded by a higher low on each side. The key to this classic chart pattern is the neckline, defined as the trendline formed by connecting the swing highs between the head and the two shoulders. With a strong uptrend emerging in July, Apollo has now completed a breakout above the neckline, confirming the inverted head and shoulders pattern. This week’s rally also pushed the price above the 200-day moving average for the first time since May. As long as APO remains above the 200-day moving average, this breakout appears to be a valid signal of a healthy uptrend. The best way to confirm a price breakout is to analyze the volume indicators. Is there enough volume to suggest that the uptrend is driven by a critical mass of willing buyers? In this case, we can see that the Accumulation-Distribution indicator has been trending higher since the end of May. The Chaikin Money Flow is also consistently above the critical zero line, confirming that APO is in an accumulation phase. With both of these volume indicators validating the recent price breakout, this adds further conviction to the bullish thesis. The weekly chart of Apollo shows how the stock has experienced a series of cyclical pullbacks within a secular uptrend phase. Following each major pullback, a bullish crossover from the PPO indicator has usually confirmed a new uptrend phase. I’ve highlighted these bullish crossover signals with green vertical lines. Last month, the weekly PPO indicator generated another buy signal for APO, suggesting a bullish “all clear” for this money manager. This week’s breakout compelled me to dig deeper into the technical characteristics of Apollo Global Management. Based on my analysis of trend, momentum, and volume, this could be the beginning of a new uptrend phase with a likely retest of all-time highs. -David Keller, CMT marketmisbehavior.com DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
