Thursday - June 22, 2006
Blog is Moving House
Updates to bullbearinvestor.com will stop for the moment so that I can concentrate on etfinvestmentoutlook.com. I will be posting regular ETF related comments on this site. There will be some free commentary and a subscription based newsletter. Once the work load is back under control, I will return to bullbearinvestor.com and offer a stock picking service. Best regards, Arthur
Click here for ETFInvestmentOutlook.com
By Arthur B. Hill - Thu 22-Jun-06 at 07:30AM in General
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Saturday - June 17, 2006
Gold ETF Enters Support Zone
After a harrowing decline the last 5-6 weeks, the StreetTracks Gold ETF (GLD) finally reached a support zone and RSI became oversold. This paves the way for a bounce and possibly a continuation of the long-term uptrend.
A number of technical items have come together to mark support around 55. First, the rising 200-day moving average currently sits at 54.16. The fact that GLD is above this moving average and that the moving average is rising is long-term bullish. Second, the January to March consolidation provides a nice support zone between 53.5 and 57. Third, the blue trendline extending up from the August low extends to around 55 and acts as support. And finally, the current decline has retraced 50-62% of the prior advance (May-05 to May-06). Even though a classic correction pattern did not form, the distance of the retracement (50-62%) is normal for a correction.
In addition to evidence for support, 14-day RSI moved below 30 for the first time since 7-Jan-05. I should point out that GLD took another month to bottom in early 2005 and there was another support test at the end of May, over four months later. There was a short-term signal in February 2005 when RSI formed a positive divergence from early January to early February 2005 and moved above 50. The same could happen here and gold may need some time to base. Buying now is for bottom pickers and aggressive traders. The other option would be to wait for RSI to form a positive divergence and move above 50.
By Arthur B. Hill - Sat 17-Jun-06 at 02:02AM in Commodities
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Wednesday - June 14, 2006
Value Picks Via Markman
Jon Markman of MSN Money talks with two value pros, Matt Feshbach and Tom Kahn, for some value picks with little or no debt. The idea is pretty straight forward. Good companies with little or no debt don’t need to worry about rising interest rates. Kahn likes Audiovoxx (VOXX), Hologic (HOLX), NY Community Bancorp (NYB) and IDT (IDT). Here is a chart look at two.
Audiovoxx has good risk-reward ratio at current levels and is consolidating at support. VOXX has been trending lower since early 2004 and formed a large falling price channel. The stock moved to support from the lower trendline and there is also support around 11 from the 2003 lows. The stock consolidated the last few months and a break above 13.2 would signal the start of a move off support.
NY Community Bancorp is another interesting play and it pays a 6% dividend. I personally wonder if this stock is not a value trap. On the price chart, NYB has been wallowing between 15 and 19 for over a year. There is lots of support just above 15, but no catalyst and no breakout. Where are the buyers? There was a surge in March and then the stock fell back to the 16-17 area (gray oval). I would like to see the stock hold above the prior lows and move above 18 before jumping in.
Click here for the full article from Markman.
By Arthur B. Hill - Wed 14-Jun-06 at 07:42AM in Stocks
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Tuesday - June 13, 2006
J&J Benefits from Tech Exodus
Where has money gone over the last six weeks? Not all HealthCare stocks benefited, but money moved out of Technology and into stocks like JNJ. This is a hybrid pharma and consumer staple company that does find no matter what the economy is like.
By Arthur B. Hill - Tue 13-Jun-06 at 10:31AM in Stocks
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Juniper Flag
Juniper Networks (JNPR) has a bull flag working. Watch for a break above 17.5 to signal a continuation of the late May/early June surge. The stock shows good relative strength and could lead a rebound.
By Arthur B. Hill - Tue 13-Jun-06 at 10:30AM in Stocks
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The Emotional Low
From an article at TheStreet.com comes a new term in technical analysis: the emotional bottom.
Several strategists believe an "emotional" bottom for U.S. equities has already occurred, and the stock market is struggling to break out of the doldrums. Mary Ann Bartels, technical research analyst at Merrill Lynch, believes the emotional bottom was reached last Thursday when the market sold off throughout most of the day, but rebounded sharply in the last couple of hours. Once done, however, market indices are likely to test previous highs, she says. Thursday's action "indicates an emotional day where sellers may have become exhausted and buyers are beginning to take control," she writes, adding that markets may take several weeks to build a "successful bottom."
Say What?!
Thursday’s low was not a real selling climax and not even a reversal. Yes, there were a number of hammers, piercing patterns and bullish engulfing patterns last Thursday. However, these formed with two hours of selling pressure (10-12) and four hours of buying pressure (12-16). Buying pressure fizzled on Friday and this showed just how weak the “emotional” low really was. Let’s try and leave the emotions out it – shall we.
By Arthur B. Hill - Tue 13-Jun-06 at 10:29AM in Sentiment
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Friday - June 09, 2006
Bullish Candlestick Reversals Abound
Stocks declined in the morning and rallied in the afternoon. As a result a number of bullish candlestick reversal patterns formed on Thursday. These include piercing patterns, hammers and bullish engulfings. The hammer is a single candlestick pattern and the others form with two candlesticks. All three require confirmation and follow through over the next day or two is needed to forge a short-term bullish reversal. Ideally, follow through should come with expanding volume. Follow through on low volume would show lack of confidence. Today I will highlight a number of stock charts with these bullish candlestick reversals.
Energy stocks rebounded yesterday and RIG formed a big hammer near its May lows. Volume surged and this reinforces support around 75. Follow through above 80 is needed to confirm the hammer.
Anadarko Petroleum (APC) formed a piercing pattern on high volume. The piercing patterns forms when the open is below the low of the black candlestick and the close is above the mid point. This pattern formed at support from the March low and a break above 50.5 would confirm the pattern.
Sealed Air (SEE) formed a high volume hammer at support. A break above 52.5 would confirm the hammer and turn the short-term trend bullish.
Dow component 3M (MMM) formed a piercing pattern at support from the prior gap.
Lowes (LOW) formed a bullish engulfing with above average volume. The stock found support near the late May gap and a break above 64 would turn the medium-term trend bullish.
Apple (AAPL) formed a bullish engulfing at support yesterday. Support stems from the March low and the reversal formed on good volume. Now for some follow through above 68 to confirm.
By Arthur B. Hill - Fri 09-Jun-06 at 06:58AM in Stocks
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