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January 19, 2006
Retail HOLDRS, Ivanhoe hoe hoe, Cybersource and TradingMarkets Playboy
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The Retail HOLDRS (RTH) is up for a big support test. The stock formed a harami on 5-6 Jan, but follow through failed just above 97. After a gap down on Tuesday, the stock formed a bullish engulfing on Wednesday and this is another bullish candlestick reversal. Follow through above 97.26 would be bullish. Also notice that RSI is trending lower and a break above the red trendline (56) would turn momentum bullish. On the downside, a support break at 94 would be bearish for the group, the Consumer Discretionary sector and the S&P 500.
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From the PRNewswire: - Ivanhoe Energy Inc. (NASDAQ: IVAN and TSX: IE, IE.U) announced today that its revolutionary field- located heavy oil upgrading Commercial Demonstration Facility (CDF) in California has successfully achieved a number of important performance goals culminating in an extended run last week. The successful extended test follows a period of continual incremental enhancements to the CDF over recent months, during which the CDF was operated utilizing a variety of crude oils and operating criteria. Ivanhoe Energy will now begin testing crudes from potential partners with an initial focus on heavy crudes from California and Western Canada, including bitumen from Canada's Athabasca Tar Sands region.
I will admit to being skeptical about companies that only make the news via the PR Newswire. Perhaps more information will be forthcoming today as investor digest last night’s conference call. While the move brought the stock back from the Abyss, this is a continuation of the 2003 advance. The 2004-05 decline formed a falling wedge and the surge over the last few days broke the upper trendline. This is a bullish move and further prices can be expected. Unless, of course, they are selling snake oil.
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Here is a stock making a pre-earnings breakout. Cybersource (CYBS) formed a large triangle over the last 18 months and broke resistance with a high volume surge in early January. This is a low priced issue with above average risk, especially with an earnings report looming next week.
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From TradingMarkets.com: We're now two weeks into the TradingMarkets/Playboy 2006 Stock Picking Contest and 4 of the 10 Playboy models are beating 11,705 out of the 11,739 equity mutual fund managers in the United States. Yes, that's right, 4 of the Playboy models would be ranked in the top 1% of all mutual fund managers if Morningstar tracked their performance!
It is safe to say that anyone who went long two weeks ago would be showing a profit on 9-Jan. This is clearly a publicity stunt and a pretty good one at that. I wonder if they will let the playmates pick stocks for the whole year. Two weeks is not much time to judge and there are 49 more weeks to go. A fun gimmick. That’s all. Keep you eyes on the chart!
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Posted by Arthur B. Hill at January 19, 2006 07:31 AM