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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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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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Stocks Showing Strength

This next group shows stock exhibiting strength over the last few days and showing good upside volume.

Komag (KOMG) attempted a breakout towards the end of May, but this breakout failed and the stock moved to a new low. While the broader market dipped early yesterday, KOMG opened firm and held above its early June low. The stock finished strong with a long white candlestick on good volume and I would expect a trendline breakout in the coming days. .

RSA Security (RSAS) held firm at the end of May and broke resistance yesterday. While the Nasdaq was breaking to new lows, RSAS was trading above its May lows and showing some relative weakness. The breakout occurred on good volume and this stock will likely lead if the Nasdaq reverses its current downtrend.

Gentiva Health (GTIV) held firm in May and showed some relative strength. This firmness turned into buying pressure over the last seven days and the stock looks poised to break triangle resistance at 18.25.

General Electric (GE) is looking relatively strong. The stock held up pretty good in May and formed a bullish engulfing on 24-May (gray oval). While the broader market swooned the last two weeks, GE held firm and upside volume continues to outpace downside volume. This shows accumulation and I would expect a breakout at 35.2.

Within the biotech group, Millennium (MLNM) is showing signs of life with good volume. The stock bottomed at the end of May and broke above trendline resistance in early June with good upside volume. The stock met resistance at 9.7 yesterday, but strong upside volume suggest more upside in the stock price.

By Arthur B. Hill - Fri 09-Jun-06 at 06:57AM in Stocks
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Tuesday - June 06, 2006

As IBM Goes….

As IBM goes, so goes the overall market. This stock was stuck in a range from March to mid May and then broke support in May. The stock consolidated for a few weeks and moved lower the last two days. Broken support turns into resistance at 81.3 and it would take a move back above this level to revive the bulls. As long as 81.3 holds, I expect lower prices in this tech bellwether.

By Arthur B. Hill - Tue 06-Jun-06 at 03:01PM in Stocks
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AMD Breaks Support

AMD may be winning the war against Intel (INTC), but the stock just broke down and cannot buck overall weakness in techs. Actually, the stock came down hard in March and stayed down in April and May. Even though the stock traded flat when the Nasdaq cratered, it failed to follow through on the gap off support and broke below 30 on Monday. This is not a good sign and the next support zone is around 25.

By Arthur B. Hill - Tue 06-Jun-06 at 03:00PM in Stocks
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Thursday - June 01, 2006

CHKP, UIS and MER

I am starting to see signs of buying pressure in CheckPoint Software (CHKP). The stock fell apart in late March and early April, but managed to firm in mid April and May. A double bottom formed over the last two months and the advances in April-May show above average volume (gray boxes). In addition, notice that On Balance Volume formed a higher low and positive divergence over the last two months. CHKP consolidated over the last four days and I am looking for a continuation of last week’s surge to break 20 and turn bullish.

Unisys (UIS) is finding a mind of its own with a gap and three day surge above resistance at 6.5. Yesterday’s breakout occurred on above average volume.

As brutal as the current decline in Merrill Lynch (MER) looks, it is no worse than that seen in March-April 2005. In fact, I see at least two similarities. Both peaks formed with rising consolidations and both declines found support near prior consolidations (blue circles). It took MER over a month to find its footing and start moving higher in April 2005. I would expect at least the same now. After the decline from the low 80s to the upper 70s, it will take a few weeks for the stock to establish its footing (base) and the best we can expect is flat trading the next few weeks.

By Arthur B. Hill - Thu 01-Jun-06 at 07:34AM in Stocks
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Wednesday - May 31, 2006

ADI Nears Long-term Support

Analog Devices (ADI) has been range bound since August 2004 and is currently closing in on the lower end of this range. The stock bounced between 31 and 33 four times over the last two years. I will be watching for a reversal as the stock nears the support zone. This may come in the form of a hammer, harami, bullish engulfing of a gap up on big volume. Failure to hold support and a break below the 2005 lows would signal a continuation of the 2004 decline and this would be bearish for the Semiconductor group.

By Arthur B. Hill - Wed 31-May-06 at 07:47AM in Stocks
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AT&T Attempts to Buck the Market

AT&T tried to buck the market trend with a gap and trendline breakout last Friday, but the stock fell back with the rest of the market on Tuesday. The gap is still holding and this is positive. The stock needs to move above 26.5 to complete the breakout and turn fully bullish again. Notice that T firmed near the 200-day SMA and the Dec-Jan resistance zone (gray box). In addition, the decline formed a falling wedge and retraced 50-62% of the prior advance. The pieces for a continuation breakout are there. Now, show me the breakout at 26.5.

By Arthur B. Hill - Wed 31-May-06 at 07:47AM in Stocks
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Merck Breaks Down

Merck (MRK) was holding up better than the rest of the HealthCare sector in early May, but the recent breakdown on high volume signals a continuation lower and this will weigh on the group. The stock gapped down in April and then formed a rising wedge. This is a bearish consolidation and the stock broke the lower trendline last week. There was a brief attempt to undo this breakout on Friday, but the stock totally fell apart on Tuesday with a close below 33.5 on high volume. As a continuation of the prior decline, I expect a move to around 30 or another 10% down.

By Arthur B. Hill - Wed 31-May-06 at 07:46AM in Stocks
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Tuesday - May 30, 2006

Consumer Staple Stocks Heating Up

Consumer Staples Heating Up

Consumer Staples stocks were strong last week with Alberto Culver (ACV) leading the way higher. ACV is a consumer good conglomerate that makes everything from furniture polish to artificial sweeteners. Maybe those two things have similar ingredients. Regardless, the company makes things we need in good times and bad. The stock surged in February, consolidated in March-April and broke resistance last week. Volume was a bit light on Friday, but the stock shows good relative strength. Moreover, strength in Consumer Staples reflects a defensive risk-averse market environment.

A 52-week high for Pepsico (PEP) further confirms the rotation of money into Consumer Staples stocks. PEP has been outperforming Coke (KO) the last few years and continues to lead the way higher. The stock consolidated between 56 and 60.5 the last few months and surged off support with expanding volume the last few weeks (blue box). The move was strong enough to break resistance and forge a 52-week high. While I would not buy the breakout, I would put this stock on my radar for a pullback that could result in a buying opp.

Elsewhere within the sector, I found a double bottom breakout in Coca Cola Bottling (COKE). The stock declined the last three years and formed a base in 2006. There was some high volume surges earlier in the year (blue box) and a resistance breakout this month. The move above 48 broke the November high and exceeded the Dec-04 trendline. Keep in mind that this breakout is occurring at the S&P 500 broke down over the last few weeks. COKE shows relative strength and the breakout is bullish.

By Arthur B. Hill - Tue 30-May-06 at 08:23AM in Stocks
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Wednesday - May 24, 2006

KOMG, QLGC, T and SNDK

AT&T Testing Support

AT&T continues to test support around 25. This support level stems from the 200-day SMA and the prior consolidation (gray box). In addition, the recent decline marks a 50-62% retracement of the prior advance. The bears have the upper hand as long as the falling price channel holds. Look for a move above the upper trendline and May high (26.5) to signal a breakout and turn bullish again.
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SNDK Breaks Support

Sandisk (SNDK) had been holding up a lot better than the Nasdaq over the last few weeks, but finally broke down with a support break at 60 yesterday. This move signals a continuation of the prior decline and targets further weakness below the March low. Needless to say, this bodes ill for the Semiconductors and Nasdaq.
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Komag Breakout Fails

I reported a breakout in KOMG last Friday and the stock was showing good relative strength. However, not many tech stocks can withstand a broad decline in the Nasdaq. The stock opened strong on Tuesday and closed weak to form a long black candlestick on high volume. Weakness on low volume would have been tolerable, but weakness on high volume is not and this breakout is likely to fail.
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Qlogic Forms Flat Flag

I reported relative strength in QLGC last Friday as well, but the stock failed to follow through. The pattern over the last few weeks now looks like a sharp decline and flat flag. Downside volume remains relatively tame and I will be watching recent boundaries for a signal. A break above 18.6 would be bullish and a break below 17.7 bearish.

By Arthur B. Hill - Wed 24-May-06 at 07:32AM in Stocks
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Friday - May 19, 2006

Three Techs That Held Firm This Week

Komag (KOMG) has been bucking the trend over the last five days and is moving higher on good volume today. The stock formed a falling price channel and is breaking resistance on Friday. The combination of good relative strength and an oversold Nasdaq could extend this bounce next week.
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Qlogic (QLGC) also held firm over the last few days and shows less weakness. The stock gapped down in early May and found support around 18. While the Nasdaq tanked the last six days, QLGC held support and is moving above resistance at 18.5 today.
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Cisco (CSCO) is the third stock that held firm over the last 5-6 days. The stock fell sharply 10-11 May and then firmed around 20. A large hammer formed on Monday and an inverted hammer on Thursday. The stock is moving higher on respectable volume today and shows good relative strength. If the Nasdaq rebounds, look for CSCO to lead.

By Arthur B. Hill - Fri 19-May-06 at 03:12PM in Stocks
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Thursday - May 18, 2006

First Data, Merck and Energizer

First Data (FDC) firms near trendline support and broken resistance (gray oval). The broader market was weak the last two days, but FDC held firm and this shows relative strength. Also notice that upside volume was strong yesterday (blue oval)
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Merck looks in trouble with a rising wedge and high volume decline. The stock broke support with a gap down and high volume decline in April. The current advance traced out a bearish rising wedge and is meeting resistance in the gap zone. A move below 33.8 would signal a continuation lower.
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Energizer (ENR) is bucking the trend with three straight advances. The stock declined to support around 49 and firmed over the last few weeks. There was a high volume advance in late April, but the stock pulled back to support in May. The stock is once again bouncing on good volume. This is pretty impressive in the face of broad market weakness.

By Arthur B. Hill - Thu 18-May-06 at 07:50AM in Stocks
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Wednesday - May 17, 2006

Cable Stocks Remain Hot

I featured Comcast (CMCSA) has it broke double bottom resistance in late April. The stock then gapped higher and looks headed for a bout with its 2005 high around 34.5.

TimeWarner (TWX) has lagged CMCSA lately, but appears to be playing a bit of catch up. The stock surged above 17.2 on good volume in late April and help 17 on the early May pullback. While the broader market tanked last week, TWX held firm and advanced over the last five days with above average volume. Money is moving into TWX and I am looking for a resistance test around 19.

By Arthur B. Hill - Wed 17-May-06 at 07:50AM in Stocks
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Monday - May 15, 2006

IBM Holds Range Support

The Nasdaq and tech stocks bore the brunt of recent selling pressure and led the way lower over the last few days. Even though IBM is not part of the Nasdaq, I consider it a key tech stock and am impressed with its ability to hold firm last week. The stock formed a triangle over the last few months and remains above support at 80.5. I still find this chart bearish overall become of the large gap and resistance around 85-86. However, continued firmness and a nice breakout at 84.5 could not be ignored and I would then turn bullish. A break below 81 would signal a continuation lower and this would be bearish for the stock, the Nasdaq and techs.

By Arthur B. Hill - Mon 15-May-06 at 03:16PM in Stocks
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SYMC Shows Some Relative Strength

Symantec (SYMC) has been beaten up over the last few 15 months and managed to firm over the last three months. The big trend is clearly down, but I was impressed with the ability of this stock to hold firm the last three days. Volume was above average three of the last four days and the stock is consolidating around resistance at 16.5 (gray oval). There have been a number of false breakouts in the past year and there is reason to be skeptical. However, the stock shows good relative strength the last few weeks and would likely break resistance with a tech turnaround. A move above 18 opens the door to the low 20s.

By Arthur B. Hill - Mon 15-May-06 at 03:15PM in Stocks
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Thursday - May 11, 2006

ICGE Making a Comeback

Remember those internet incubators? Internet Capital Group (ICGE) was one of the high flyers in 1999 and has been trading flat since 2002. The stock broke falling flag resistance with a surge in March and this breakout is holding. There is massive resistance around 10 and a break above this level would forge a multi-year high. I think price action is currently bullish and expect a breakout. This is a high risk stock and I would watch the April low for signs of trouble.

By Arthur B. Hill - Thu 11-May-06 at 08:56AM in Stocks
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The Noose Tightens for BMC

The trading range for BMC Software (BMC) has narrowed over the last few weeks and a triangle break is near. A nice sharp break on good volume (either way) would provide a clear signal. A move above 22.2 would be bullish and a move below 21 bearish.

By Arthur B. Hill - Thu 11-May-06 at 08:56AM in Stocks
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Wednesday - May 10, 2006

Radio Shack Rises from the Dead

While Best Buy (BBY) went from 44 to 59 this year, Radio Shack (RSH) went from 23 to 17. Even though BBY is winning the battle (and the war), RSH finally shows some signs of life with a long white candlestick on the highest volume since February. The stock established support around 17 in late April and early May. The move above 18 broke trendline resistance and reinforces support. Notice that Chaikin Money Flow moved close to positive territory in early April and remained near the zero line over the last six weeks. Despite the decline from 20 to 17, selling pressure was quite mild according to Chaikin and the indicator turned positive on Tuesday.

By Arthur B. Hill - Wed 10-May-06 at 07:06AM in Stocks
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Bearish Candlesticks For Sandisk

Sandisk rebounded after a sharp decline earlier this year, but bearish candlesticks over the last few months could foreshadow a reversal soon. The current advance retraced 50% of the prior decline and the stock met resistance around 60 four times in the last five weeks. A shooting star formed in early April (blue oval), a bearish engulfing in early May (gray oval) and another shooting star formed yesterday (red oval). There is clearly a lot of selling pressure just above 65, but the stock has yet to break down and confirm these bearish candlesticks. For confirmation, I would look for a move below the early March trendline (blue) and early May low (60). This is a volatile stock and trading is best suited for nimble players that can tolerate the risk.

By Arthur B. Hill - Wed 10-May-06 at 07:06AM in Stocks
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Tuesday - May 09, 2006

AT&T Forms Falling Wedge

AT&T (T) is also a big telco with a recent surge. The stock moved from 22 to 28 and broke the 200-day SMA last year. T corrected over the last few months with a falling wedge and returned to the 200-day SMA. In addition, the Dec-Jan consolidation turns into support and there is a nice support zone around 25. The stock bounced last week and is challenging the upper trendline of the falling wedge. A move above 26.5 would break this trendline and open the door to 30.

By Arthur B. Hill - Tue 09-May-06 at 11:07AM in Stocks
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Verizon Hits Support

Remember the big telecom rally a few months ago? These stocks have faded from the limelight, but traders should keep them on their radar. VZ surged above its 200-day SMA and broke resistance in February. Broken resistance turns into support and the stock is right back at its 200-day SMA, which also turns into support. In addition, there is the trendline extending up from the October low and it all converges on the 22-22.5 area. A bounce from here would likely turn the 200-day SMA up and start the next leg up.

By Arthur B. Hill - Tue 09-May-06 at 11:06AM in Stocks
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Tuesday - April 25, 2006

Cable Companies and Earnings Season

The Wall Street Journal reports:

Cable-TV Companies Hold Great Expectations. There have been plenty of high-fives in the cable-television industry as major operators prepare to release first-quarter earnings, starting Thursday with Comcast Corp. While the first quarter is typically a good one for operators, this is expected to be one of the best in years in terms of revenue growth and other financial measures for companies such as Comcast, Time Warner Inc. and Cablevision Systems Corp. All three are expected to add more subscribers than they have for years, setting the stage for the industry to show an annual gain in customers for the first time since 2002.

Comcast has already surged and broke resistance at 28.5 on good volume. The pattern looks like a big double bottom and the breakout projects further strength towards 31. Also notice that the pattern looked like a head-and-shoulders in late March (gray box). However, this bearish pattern was never confirmed with a support break (neckline) and the stock broke the high of the right shoulder on its way up.

Relative to CMCSA, Time Warner (TWX) is underperforming and has yet to breakout. The stock managed to firm over the last few weeks and form an outside reversal on 10-Apr. There was even a high volume advance on 18-Apr, but the stock pulled back. Watch for a move above 17.2 to trigger a mini breakout.

By Arthur B. Hill - Tue 25-Apr-06 at 03:45PM in Stocks
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Monday - April 24, 2006

DELL Cut to SELL

Barry Ritholtz of Ritholtz Research notes: Citigroup analyst Richard Gardner has heard the whining. He cuts Dell to a Sell, advises them to work on customer support. Gardner Note: "In our view, it would be preferable for Dell to reduce margins, and even near-term growth, rather than destroy 20 years of brand equity"".

Not kidding. I wonder if he peaked at the chart and why he was so late to the party. DELL formed a clear descending triangle, which is a bearish continuation pattern, and gapped below support.

By Arthur B. Hill - Mon 24-Apr-06 at 03:26PM in Stocks
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Thursday - March 09, 2006

BUD Bubbles

Although not in the top tier, BUD was also a standout performer. The stock is challenging resistance from its Jan-Feb highs with a surge on good volume yesterday.

By Arthur B. Hill - Thu 09-Mar-06 at 06:33AM in Stocks
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Walgreen Holds Gap

Walgreen (WAG) gapped up and broke trendline resistance in mid February with high volume. After a pullback the last two weeks, the stock reversed and the gap is holding. The gap offers support and yesterday’s high volume move keeps the breakout in play and the uptrend in place.

By Arthur B. Hill - Thu 09-Mar-06 at 06:32AM in Stocks
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KO Also Comes To Life

Coca-Cola (KO) broke trendline resistance in February and consolidated the last two weeks. The breakout is holding and the trendline extension is turning into support around 41.5. Notice that On Balance Volume (green line) is stronger than the stock and this shows that upside volume is outpacing downside volume.

By Arthur B. Hill - Thu 09-Mar-06 at 06:31AM in Stocks
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Thursday - March 02, 2006

Double Bottom Breakout for Cisco

Just how high is Cisco? Would you believe a 52-week high. The stock formed a big base over the last 18 months and broke above the summer highs with a high volume surge yesterday. The whole pattern from Nov-04 to Mar-06 looks like a massive double bottom and the breakout opens the door to the mid 20s.

By Arthur B. Hill - Thu 02-Mar-06 at 06:52AM in Stocks
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Tuesday - February 28, 2006

Microsoft Leads Nasdaq Bounce

The Nasdaq caught a bid yesterday and Software stocks led the way higher. MSFT still has a $279 billion market cap and is plenty big enough to move the Software HOLDRS (SWH), Nasdaq and Nasdaq 100. The stock broke triangle resistance yesterday, but volume was low. This is a negative, but the breakout is positive until proven otherwise. I will be watching yesterday’s gap and the February lows for a complete failure. A break below 26 would be bearish for the stock, software and the Nasdaq. You can also see that the pattern over the last two months looks like a head-and-shoulders. It is out of place for such a reversal pattern, but a break below 26 would be bearish all the same.

By Arthur B. Hill - Tue 28-Feb-06 at 06:40AM in Stocks
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Wal-mart Stays Home

The Retail HOLDRS (RTH) surged yesterday, but Wal-Mart was not swayed and remains below resistance. LOW and HD led the way higher for RTH and this is quite positive. However, WMT is still the king of retail and this group is not going far without help from the big cheese. The long-term trend is down and WMT has consolidated over the last two months (gray oval). A break above 47 would be bullish for the stock, the retail group, the Consumer Discretionary sector and the S&P 500. Yes, WMT holds a lot of clout. Failure to break 47 and a move below 44.5 signals a continuation lower and this would adversely affect the S&P 500 et al.

By Arthur B. Hill - Tue 28-Feb-06 at 06:40AM in Stocks
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Sandisk Helps Out Semis

The Semiconductors have been lagging the Nasdaq, but Sandisk SNDK is trying to change that. The long-term trend is up, but the stock corrected sharply in Jan-Feb. A bullish engulfing formed on above average volume last week and the stock gapped higher yesterday. The gap held and the stock closed above 60 on the highest volume of the month. Not bad and this falling wedge breakout is bullish as long as the gap and February low hold. Careful, this is one volatile bugger.

By Arthur B. Hill - Tue 28-Feb-06 at 06:39AM in Stocks
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Friday - February 24, 2006

Microsoft Still a Nasdaq Gorilla

Whatever your opinion Microsoft as a technology company (cutting edge or behind the curve), it is still mega cap with a large influence on the Nasdaq. The stock gapped up in late January, but that gap has been filled with a sharp decline. I find this quite negative and it reinforces long-term resistance at 28.5. The stock formed a pennant over the last two weeks and I am watching 26-27 for the next signal. A move above 27 would be bullish, while a move below 26 bearish. The direction of the break will influence the Nasdaq.

By Arthur B. Hill - Fri 24-Feb-06 at 05:33AM in Stocks
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GE Gaps Lower

GE is to the S&P 500 what Microsoft is to the Nasdaq. The stock rebounded over the last few weeks with a rising wedge advance. The move retraced 38% of the prior decline and stall just below 34. The hanging man candlesticks formed last week (gray circle) and the stock gapped down this week. Further weakness below 33 would get the decline back on track and this would weigh on the S&P 500.

By Arthur B. Hill - Fri 24-Feb-06 at 05:32AM in Stocks
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Wednesday - February 22, 2006

How Far Without Intel?

Stocks surged last week and the Nasdaq was on the verge of a breakout. However, a gap down in Intel drug the Semiconductors and Nasdaqs through the mud the last two days. Intel had a surge and breakout in early January, but this failed to hold and the stock gapped down on 18-Jan. Upside volume was low on the breakout and this warned of the failure. The stock is trading in the low 20’s and gapped down again last Friday. As long as this gap and resistance at 22 holds, the Semiconductors will be under pressure and this will put a lid on any Nasdaq gains.

By Arthur B. Hill - Wed 22-Feb-06 at 12:07PM in Stocks
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Apple Holding Relatively Strong

Despite Tuesday’s decline, Apple held relatively strong and the breakout is holding. The stock broke falling price channel resistance with a surge above 70. In contrast to the Nasdaq 100, Apple is still above last Wednesday’s low. I will be watching this stock for clues on Technology in general. Apple is a leader and it is important that this stock hold above 67. A move below 67 would make for a failed breakout and weigh on the Naz.

By Arthur B. Hill - Wed 22-Feb-06 at 12:06PM in Stocks
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Google Fills Gap

Google is the other tech leader to watch. The stock gapped down on 13-Feb, formed three doji and then surged with a long white candlestick. The move filled the gap and set support at 340 (give or take $100). The stock consolidated over the last two days the next move is important. A break above 380 would be bullish for all concerned, while a move below 360 would be negative.

By Arthur B. Hill - Wed 22-Feb-06 at 12:05PM in Stocks
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Thursday - February 16, 2006

Goldman Warns

From Gregory Zuckerman of the Wall Street Journal:

***Hold on Tight: Cuts in Profit Estimates Loom*** It is unusual for a major investment firm to urge investors to steer clear of a big stock. It is even more unusual for a firm to tell investors to avoid 30 such companies. But that is what analysts at Wall Street's Goldman Sachs Group Inc. are saying about a slew of companies, including Broadcom Corp., MedImmune Inc., Agere Systems Inc., Marsh & McLennan Cos., Janus Capital Group Inc., Salesforce.com Inc., and Emmis Communications Corp. The worry: Over the next few months, analysts will be slashing earnings estimates for all these companies as employee stock options begin to be counted as an expenses.

Jee, what do you think would happen to Broadcom (BRCM) on an estimate trim? There is consolidation support just below 60 and trendline support around 50.

By Arthur B. Hill - Thu 16-Feb-06 at 06:04AM in Stocks
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Tysabri and Biogen Coming Back

CBS MarketWatch Reports: Tysabri OK'd for MS patients. Biogen Idec and Elan can begin giving their pulled drug to some patients.

BIIB is still some 20 points below the levels it held before Tysabri problems appeared in February 2005. Recent price action is positive. The stock corrected with a falling wedge over the last few weeks and firmed over the last four days. The break above 45 is positive and further strength with a close above 46 would signal a continuation of the Oct-Dec run.

By Arthur B. Hill - Thu 16-Feb-06 at 06:02AM in Stocks
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Tuesday - February 14, 2006

Waste Connections Breaks Triangle Resistance

Waste Connections (WCN) breaks triangle resistance with good volume. The stock surged in November and then consolidated the last 2 months. The breakout signals a continuation higher and the upside target is 38-38.5. Key support is set at 33.9 and a move below this level would reverse the bull signal.

By Arthur B. Hill - Tue 14-Feb-06 at 07:15AM in Stocks
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Omnicom Gaps Up on Big Volume

Omnicom (OMC) is off to the races with a gap and long white candlestick breakout. The move broke channel resistance and exceeded the early February high on good volume. Key support is now set at 81.5 and it would take a move below this level to negate the breakout.

By Arthur B. Hill - Tue 14-Feb-06 at 07:13AM in Stocks
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Wednesday - February 08, 2006

Yahoo! Enters Support Zone

Yahoo!, a key stock in the Internet HOLDRS (HHH), traded down to support over the last few weeks. I should say the stock free fell to support with a big gap. The stock is clearly oversold and there is support around 32-33 from the February trendline and September lows. The stock formed a doji with a long lower shadow yesterday and is starting to show some firmness.

By Arthur B. Hill - Wed 08-Feb-06 at 09:39AM in Stocks
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Thursday - February 02, 2006

Can Cisco Follow Through?

What’s it going to be Cisco? The stock surged in early January on good volume and then fell back to broken resistance around 18. A pullback to broken resistance is quite normal and the decline formed a falling flag. CSCO broke falling flag resistance last week, but has not been able to hold the breakout this week. A move above 19 would be bullish and open the door to 20, which marks a massive resistance zone that extends back to Nov-04.

By Arthur B. Hill - Thu 02-Feb-06 at 09:08AM in Stocks
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Biomet Forms Inverse Head and Shoulders Reversal

Biomet (BMET) has an inverse head-and-shoulders working with neckline resistance at 39. The stock formed an outside reversal week at the end of January and follow through above 39 would be most bullish.

By Arthur B. Hill - Thu 02-Feb-06 at 09:08AM in Stocks
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Leggett & Platt Legs Higher

Leggett & Platt (LEG) is getting a leg up with a consolidation breakout on good volume. Notice that upside volume surged at the beginning and the end of January. The breakout reinforces support just below 23 and a move below the January low would be bearish.

By Arthur B. Hill - Thu 02-Feb-06 at 09:07AM in Stocks
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Gap Inc Gaps Higher

Gap Inc (GPS) got a gap higher on pretty good volume at the end of January. That is not quite enough though. The stock formed a triangle over the last 2 1/2 months and has yet to break above the upper trendline. In fact, the gap/surge stopped right at trendline resistance and it would take a move to 18.5 to signal a continuation higher.

By Arthur B. Hill - Thu 02-Feb-06 at 09:06AM in Stocks
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Wednesday - February 01, 2006

Kemet Breakout

KEMET (KEM) is in the S&P MidCap Index, Technology sector and electronics sub-sector (industry group). The company has been losing money, but swung to a profit last quarter and may be turning the corner. The following paragraph from the company website sums up their:

***Today, KEMET leads the capacitor industry in producing high-performance solutions, including the world’s most complete line of surface-mount tantalum, ceramic, and aluminum capacitor technologies provided with near-perfect quality and on-time delivery at competitive prices to customer locations worldwide. KEMET capacitors are fundamental elements used in every type of electronic equipment, including computers, telecommunication, automotive electronics, military electronics, medical electronics, and consumer electronics. “High-Reliability” versions of our capacitors have shared in every important military/aerospace effort from the first Telstar to Viking, the Apollo moon landing, the Patriot missile, the Mir and International Space Stations, and the Pathfinder/Sojourner exploration of Mars. Production is measured in the billions of pieces per year.***

On the price chart, KEM shows signs of strong buying pressure with a triangle breakout and move above the August high. The stock is current challenging its 52-week high and this is the second surge on big volume. As a low priced stock, risk is above average and traders might put this one on the radar to buy on a dip.

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By Arthur B. Hill - Wed 01-Feb-06 at 11:07AM in Stocks
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Tuesday - January 31, 2006

Cramer Likes Silver and Pan American Silver (PAAS)

Jims goes on to say: Want a silver play to help make money from inflationary pressures in the market? Cramer said to look at Pan American Silver (PAAS) a Canadian company. The company's margins are expanding and that its growth is accelerating. Combine that with rising silver prices, and, he said, there's a lot to like.

Obviously Jim is not alone as PAAS moved from the low 12s to the low 22s. The stock formed a nice rising price channel over the last eight months and recently moved above the upper trendline on big volume. This has created an overbought situation and the stock is ripe for a pullback or consolidation. Now is not the best time to buy and I would be more inclined to wait for the Stochastic Oscillator to become oversold (gray ovals) for a better risk-reward ratio.

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By Arthur B. Hill - Tue 31-Jan-06 at 06:34AM in Stocks
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Ink-o-dem Ready to Take a Bite out of Hewlett and Lexmark

The Wall Street Journal Reports: Even as computer prices have steadily dropped, the cost of one high-tech necessity has remained stubbornly high. Printer cartridges are so costly that printer giant Hewlett-Packard Co. has long made more than two-thirds of its profit from selling them. Now, in a move that could save consumers hundreds of dollars in replacement costs, several major retailers are starting to offer speedy refill services that replace the ink rather than the entire cartridge.

This picture shows the Ink-o-Dem. Walgreen’s is rolling out this service in half of its 1500 stores. Think what would happen when Wal-mart gets wind of this! Lexmark and HP can say goodbye to a big percentage of their profits.

HPQ had a great run over the last 18 months (16 to 32) and is meeting resistance around 31-32. The stock formed a bearish engulfing on 20-Jan and a dark cloud on 26-Jan. These are potentially bearish, but the stock has yet to fold and break even minor support at 31. I think this Ink-o-Dem could take the bid out of HPQ and at least stall the advance. There is nothing in the chart to show weakness yet, but I will be watching closely.

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By Arthur B. Hill - Tue 31-Jan-06 at 06:31AM in Stocks
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Thursday - October 06, 2005

Value in Microsoft ?

Fred Volgelstein of Fortune thinks Microsoft is a value play. The stock has been working its way higher the last few years and formed a massive rising wedge. As long as the wedge rises and key support at 23.8 holds, the bulls have the long-term edge. However, a break below 23.8 would be long-term bearish and call for a continuation of the prior decline (2002). This would also be bearish for software, the Nasdaq and the S&P 500. Google and Microsoft are clearly headed in different directions.

By Arthur B. Hill - Thu 06-Oct-05 at 07:00AM in Stocks
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YUM is Yummy In China

Chinese growth fueled a 16% profit surge at YUM Brands (KFC, Taco Bell, Pizza Hut). The stock gapped higher and closed higher with above average volume. However, the stock closed near the intraday low and succumbed to selling pressure. There is lots of support around 45-47 and a break above 51 would be bullish. I cannot remember the last time I went to Pizza Hut!

By Arthur B. Hill - Thu 06-Oct-05 at 06:59AM in Stocks
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Wednesday - October 05, 2005

Hardware Upgrade and 52-week Lows

Goldman Sachs upgraded the hardware group (EMC and IBM) and Lexmark slashed its earnings outlook by 50%. LXK fell sharply and joins DELL on the 52-week low list. I wonder how long HPQ can hold out.

By Arthur B. Hill - Wed 05-Oct-05 at 06:07AM in Stocks
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Sun Sees the Light

SUNW shot higher on news of a partnership with Google to promote OpenOffice. This is the only competition to Microsoft Office. In addition, Google also notes that we do not need Windows to see the future. Google is red hot and MSFT is not. Look out.

By Arthur B. Hill - Wed 05-Oct-05 at 06:05AM in Stocks
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Tuesday - October 04, 2005

Lockheed Looking Toppy

Lockheed Martin (LMT) formed a large head-and-shoulders this year. There is a neckline, but I prefer the support zone around 48.5-49.5. The head-and-shoulders is not confirmed as long as 48.5 holds and the uptrend remains in play. A move below would break the uptrend and confirm this big bad bearish reversal pattern.

By Arthur B. Hill - Tue 04-Oct-05 at 11:55AM in Stocks
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ELY Drives Higher

Callaway Golf (ELY) advanced to 15 in late June and then consolidated the next three months. The stock found support at 14 and you know the drill by now. The gap and high volume surge off support solidify support and argue for a continuation higher. A move below 14 and all bullish bets are off.

By Arthur B. Hill - Tue 04-Oct-05 at 11:55AM in Stocks
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CHIC Gaps Off Support

Charlotte Russe HLDG (CHIC) surged above resistance in July and this resistance turned into support. The stock tested support in August and September. Monday’s gap and surge above resistance solidifies support and calls for a continuation of the prior advance.

By Arthur B. Hill - Tue 04-Oct-05 at 11:54AM in Stocks
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Kemet Breaking Out

Kemet (KEM) surged in late July with gap and held the gap throughout August and September. The stock move above resistance at 8.5 on Monday with above average volume and this signals a continuation of the prior advance.

By Arthur B. Hill - Tue 04-Oct-05 at 11:54AM in Stocks
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Monday - October 03, 2005

SBC Forms Another Bullish Engulfing

SBC formed a bullish engulfing at support on above average volume.

By Arthur B. Hill - Mon 03-Oct-05 at 06:45AM in Stocks
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Jabil Surges Back Above Resistance

JBL surged back above resistance with high volume.

By Arthur B. Hill - Mon 03-Oct-05 at 06:44AM in Stocks
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X Cannot Fill Gap

X cannot fill the 20-Sep gap and cannot hold gains.

By Arthur B. Hill - Mon 03-Oct-05 at 06:44AM in Stocks
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EW Scripts Showing Good Upside Volume

SSP shows good upside volume in Sept and a break above 51.2 would be bullish.

By Arthur B. Hill - Mon 03-Oct-05 at 06:43AM in Stocks
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OATS Turning It Up

OATS formed a falling flag over the last two months and surged on big volume Friday.

By Arthur B. Hill - Mon 03-Oct-05 at 06:43AM in Stocks
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Friday - September 30, 2005

Wal-Mart At Long Term Support

James Cramer of Mad Money and Gary Smith of TheStreet.com recently recommended Wal-Mart as it trades near multi year support. While it may be at support and oversold, the chart looks sick to me. The triangle break and heavy downside volume show that the bears are clearly in control.

By Arthur B. Hill - Fri 30-Sep-05 at 08:15AM in Stocks
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Wednesday - September 28, 2005

Kirby Surges Through Resistance

Its another high volume breakout for Kirby Corp (KEX) as energy related stocks continue to lead the pack. The stock formed a falling flag that

By Arthur B. Hill - Wed 28-Sep-05 at 10:31AM in Stocks
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Hain Gaps Higher

Hain Celestial (HAIN) formed a rather strange looking flag in July and August. Even though the flag expands like a megaphone, I think this is a valid correction. Regardless of the technical beauty, the stock firmed and surged above the upper trendline with big volume. The gap is also bullish and this Consumer Staples stocks looks like it is headed higher.

By Arthur B. Hill - Wed 28-Sep-05 at 10:30AM in Stocks
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Tuesday - September 27, 2005

Paccar Breaking Down

Paccar (PCAR) formed a large triangle over the last few months and broke trendline support last week. Volume is relatively subdued, but the stock is down six days in a row and clearly under selling pressure.

By Arthur B. Hill - Tue 27-Sep-05 at 10:30AM in Stocks
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Colgate Leading Staples Lower

The Consumer Staples sector used to be the place to hide when the market looked frothy or vulnerable. However, one must be choosy even in this sector. Colgate Palmolive (CL) gapped up in early September, but failed to hold this gap and filled it the very next week. The stock then gapped lower last week and broke support at 51.8. Stay away for now.

By Arthur B. Hill - Tue 27-Sep-05 at 10:29AM in Stocks
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Regency HS Top

Regency (REG) formed a classic head-and-shoulders top over the last few months. Volume expanded on the decline from 63 and again over the last few days. A neckline break would project further weakness towards 50.

By Arthur B. Hill - Tue 27-Sep-05 at 10:29AM in Stocks
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Intersil Looking Scary

The big trend is clearly up, but the stock got overextended and declined on high volume the last seven days (gray ovals). A trendline break would be the next bearish signal and I see support around 17.5-18.

By Arthur B. Hill - Tue 27-Sep-05 at 10:27AM in Stocks
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Monday - September 26, 2005

JDSU Surges on Big Volume

JDS Uniphase has been featured twice at BullBearInvestor.com: once mid July and once in mid September. The stock continues to move higher on good volume moved further above resistance at 1.75. This breakout is for real as long as 1.45 holds.

By Arthur B. Hill - Mon 26-Sep-05 at 06:53AM in Stocks
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Will Ciena Follow JDSU?

Ciena is another poster child of the dot-com fiber-optic bubble. The stock has consolidated since May and a triangle formed over the last few months. Upside volume is picking up and a breakout above 2.35 would be quite bullish.

By Arthur B. Hill - Mon 26-Sep-05 at 06:52AM in Stocks
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Friday - September 23, 2005

Donaldson Finds Support

Donaldson (DCI) has a piercing pattern working. Actually, it formed on Tuesday and Wednesday. The stock gapped higher on Thursday and upside volume has been quite strong over the last seven days. A trendline break is the next hurdle to reverse the seven week downtrend.

By Arthur B. Hill - Fri 23-Sep-05 at 03:50PM in Stocks
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MAGS Pennant

Isreali security company Magal Security (MAGS) formed a pennant and a breakout at 11.5 would be bullish.

By Arthur B. Hill - Fri 23-Sep-05 at 03:50PM in Stocks
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COCO Gets Hot

COCO has lots of support around 12.5 and recent broke resistance at 13 with a good move and a positive story in Barron’s

By Arthur B. Hill - Fri 23-Sep-05 at 03:50PM in Stocks
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GD Breaks Resistance

Defense is still hot as General Dynamics breaks to a new 52-week high on good volume.

By Arthur B. Hill - Fri 23-Sep-05 at 03:49PM in Stocks
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Wednesday - September 21, 2005

HPQ Looking Frothy

Dell (DELL) and Lexmark (LXK) have tanked recently, but Hewlett Packard (HPQ) continues to charge ahead and make new highs. I would be might nervous holding this perennial disappointer after such a run. The stock reached the upper trendline of a rising price channel that extends from mid May and formed a bearish engulfing (red oval). It is still a top picking exercise, but this stock could easily correct back to 25.

By Arthur B. Hill - Wed 21-Sep-05 at 12:20PM in Stocks
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Dell Reaches Support

When comparing the charts for DELL and HPQ, one would be inclined to think they are in different industry groups. DELL is testing support that extends back to 2004 and cannot hold a bid. Meanwhile, HPQ is recording 52-week highs and pushing all the right buttons. DELL is a leader and this kind of performance bodes ill for the broader market and the industry. The stock is getting oversold and at support. While this may provide a reprieve, the damage done over the last few weeks will have lasting affects.

By Arthur B. Hill - Wed 21-Sep-05 at 12:20PM in Stocks
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Qlogic Reaches Retracement

Storage is a hot industry group and Qlogic is part of it. However, the chart pattern does not look so hot. QLGC retraced 50% of its prior decline with a rising price channel advance to around 35. This was a laborious advance with relatively light upside volume. Volume is fuel and low fuel tells me this was a corrective advance. The stock is running into trouble around 35 and a move below the lower trendline (32) would signal a continuation of the prior decline.

By Arthur B. Hill - Wed 21-Sep-05 at 12:18PM in Stocks
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Monday - September 19, 2005

HON Cup with Handle

Honeywell (HON) is testing resistance and a breakout would confirm the cup-with-handle pattern. The cup extends from February to July, the handle from August to September and the rim marks resistance at 39.5. A breakout would signal a continuation higher and forecast higher prices.

By Arthur B. Hill - Mon 19-Sep-05 at 06:48AM in Stocks
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Hi Ho Silver

Not only are gold stocks breaking out and surge on good volume, but silver stocks are also joining in on the action. Coeur D’Alene (CDE) broke resistance in mid August, corrected and surged again in September. Notice that CDE moved back below the August breakout, but held the consolidation lows. The stock gapped higher in early September and surged on good volume Friday. The precious metals group is moving higher.

By Arthur B. Hill - Mon 19-Sep-05 at 06:47AM in Stocks
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Yahoo! Feeling Google Heat

While Google (GOOG) tests its July highs and resistance around 300, Yahoo! (YHOO) continues to wallow near its July lows. The stock never recovered from the gap down and consolidated the last two months. There is support at 32.5 and resistance at 35. Traders should watch these boundaries for a signal. Given the unfilled gap and inability to bounce, I think the stock will continue lower and break support. A move above 35 would negate this theory and be bullish.

By Arthur B. Hill - Mon 19-Sep-05 at 06:47AM in Stocks
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RSAS Making Noise

RSA Security is in the business of network security. The company fell on hard times earlier this year with an earnings miss, but has clawed its way back. The stock surged in July, consolidated in August and broke resistance in September. Given the correction in the Nasdaq in August, I think the stock held up quite well and the breakout argues for higher prices. Volume picked up on Friday and it would take a move below 12.4 to negate the breakout and turn bearish.

By Arthur B. Hill - Mon 19-Sep-05 at 06:46AM in Stocks
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Pulte Filling the Gap

A up gap is bullish as long as it holds and a down gap is bearish as long as it holds. Once these gaps are filled, the gap is negated and a move in the opposite direction (of the gap) may take hold. PHM gapped up on Friday 9-Sep and declined sharply on Friday 16-Sep. The decline occurred on high volume and the stock finished in the middle of the gap. This gap is getting a quick challenge and further weakness below 43.5 would fill the gap. This would make it an exhaustion gap and PHM could then test support around 40 again. Turning bearish now would still be a top picking exercise, but the recent surge in downside volume shows an uptick in selling pressure and this group may remain under pressure.

By Arthur B. Hill - Mon 19-Sep-05 at 06:46AM in Stocks
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Thursday - September 15, 2005

Wachovia Breaks Support on Big Volume

I first highlighted Wachovia (WB) on 31-August with the triangle. The stock bounced in early September, but quickly fell back and broke support with high volume. This support break looks like it is here to stay and WB appears headed lower. Only a move above the September high at 51 would reverse this break.

By Arthur B. Hill - Thu 15-Sep-05 at 11:16AM in Stocks
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P&G Harami

Procter & Gamble (+ Gillette) is the biggest stock in the Consumer Staples sector and the Consumer Staples SPDR (XLP) is not going anywhere without agreement by PG. After a triangle breakout in early September, PG formed a harami (red oval) and then gapped lower. The two day decline confirms the harami and negates the trendline break. Should the market turn lower, the Consumer Staples SPDR (XLP) or PG will not offer safe keeping.

By Arthur B. Hill - Thu 15-Sep-05 at 11:16AM in Stocks
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Wednesday - September 14, 2005

Monaco Coach Breaks Trendline

Here is another classic setup. Monaco Coach (MNC) formed a falling wedge in August and broke the upper trendline with good volume yesterday. The decline was a bit deeper than usual for a correction, but the pattern (falling wedge) is valid. I am also impressed with volume flows over the last two weeks as upside volume outpaces downside volume. The Accumulation Distribution Line moved higher from late April until late July and then traded flat as the stock corrected. This shows light selling pressure and even some accumulation during the August decline. A move below 14.5 would negate this breakout.

By Arthur B. Hill - Wed 14-Sep-05 at 06:22AM in Stocks
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JDS Uniphase Surges off Support

JDS Uniphase (JDSU) has shown signs of firmness for the last few months and is getting another bounce off support on good volume. The stock bounced in July with good volume and this move also featured above average volume. The pattern looks like a 3-4 month consolidation and a break above 1.8 would be bullish. Low priced stocks carry above average risk and a move below 1.45 would be bearish.

By Arthur B. Hill - Wed 14-Sep-05 at 06:21AM in Stocks
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Applied Materials Consolidates

For the Semiconductor HOLDRS (SMH) to really get moving, the equipment stocks need to break resistance. Look no further than the leader: Applied Materials (AMAT). The stock advanced from 14.5 to 18.5 and then consolidated with a triangle. There is support around 17.5 from the lower channel trendline and September low. A move above 18.5 would break consolidation resistance and signal a continuation higher. This would be bullish for the stock and the Semiconductor HOLDRS (SMH). Conversely, a move below the early September low would be quite negative.

By Arthur B. Hill - Wed 14-Sep-05 at 06:21AM in Stocks
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Entergis Breaks Resistance

Entergis (ENTG) traced out a nice setup and the upside breakout has a lot of power. The decline to around 10 retraced 50% of the prior advance (May-Jul) and formed a falling wedge. Both the decline and the retracement are typical for corrections. In addition, the decline found support near broken resistance This another good sign as the breakout is holding. The stock gapped up on 6-Sept and again on Friday. Volume surged and this breakout looks like it is here to stay. Watch 10.5 for signs of a failure.

By Arthur B. Hill - Wed 14-Sep-05 at 06:20AM in Stocks
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Electronic Arts Gaps on Big Volume

The pattern is classic and the breakout looks robust. Electronic Arts (ERTS) corrected in August, gapped up and then surged above resistance on high volume. The gap and surge have broken the decline and this signals a resumption of the prior advance. Watch 58 for signs of a failed breakout.

By Arthur B. Hill - Wed 14-Sep-05 at 06:20AM in Stocks
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Tuesday - September 13, 2005

Taiwan Semi

Here’s one to watch for the semiconductor group and techs overall. Taiwan Semi (TSM) formed harami in late August and early September (blue carets). These are bullish candlestick reversals that require confirmation. In addition, the stock formed a falling wedge and broke above the upper trendline last week. Moreover, upside volume is outpacing downside volume over the last two weeks. I am marking key resistance at 8.5 and a break above this level would signal a continuation of the April-June advance.

By Arthur B. Hill - Tue 13-Sep-05 at 06:27AM in Stocks
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Rambus 5 or 90?

Mike Cohen, director of research at Pacific American Securities, says that Rambus is "worth either $5 or $90". He adds that the varied valuations are based on whether or not someone expects Rambus to ultimately win its legal cases. The stock surged on takeover rumors and is testing trendline support. There are a number of court cases in progress and the stock will be prone to the ebb and flow of these cases. There are really no other drivers for the stock. Imagine a tech company driven by lawyers!

By Arthur B. Hill - Tue 13-Sep-05 at 06:27AM in Stocks
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RSAS Breakout

Network security company RSA Security (RSAS) broke to a five month high with a move above resistance on Monday. Volume was a bit light though. The stock has lots of support just above 13 and a move below 13 would negate the breakout. In fact, a failure to hold the breakout and a move below 13 would be outright bearish. Despite the low volume, the breakout is bullish until proven otherwise.

By Arthur B. Hill - Tue 13-Sep-05 at 06:26AM in Stocks
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Monday - September 12, 2005

XOM Revives Energy

Why is the Energy SPDR (XLE) surging again? Thank ExxonMobil (XOM) in large part. XOM is the biggest component of XLE and has been lagging the sector this summer. The stock never broke down, but never broke up. Until now. After a falling flag breakout in June, XOM consolidated the last 2-3 months. The breakout at 61 on good volume is bullish and I would expect new highs over the next few weeks.

By Arthur B. Hill - Mon 12-Sep-05 at 06:52AM in Stocks
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PG Breakout

Procter & Gamble (PG) is the biggest component in the Consumer Staples sector and the recent breakout bodes well for both. Notice that volume expanded as the stock broke triangle resistance and exceeded its late July high.

Procter & Gamble (PG) is the biggest component in the Consumer Staples sector and the recent breakout bodes well for both. Notice that volume expanded as the stock broke triangle resistance and exceeded its late July high.

By Arthur B. Hill - Mon 12-Sep-05 at 06:51AM in Stocks
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JNJ Breakout

Strength in Johnson & Johnson (JNJ) is helping the HealthCare sector. The stock broke above the upper trendline of a long falling price channel and is challenging resistance from the Jul-Aug highs. Upside volume has outpaced downside volume the last two weeks.

By Arthur B. Hill - Mon 12-Sep-05 at 06:51AM in Stocks
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Friday - September 02, 2005

Oracle Breakout

Oracle breaks falling wedge resistance with a big move. Volume was a bit light, but the breakout is clear.

By Arthur B. Hill - Fri 02-Sep-05 at 03:10PM in Stocks
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Wednesday - August 31, 2005

Xilinx Trying to Base

XLNX - Xilinx (XLNX) has an inverse head-and-shoulders working with neckline resistance just above 29. Upside volume was strong in July and expanding volume on a run to neckline resistance would be bullish.

By Arthur B. Hill - Wed 31-Aug-05 at 11:06AM in Stocks
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Micron Tests Support

MU - Micro (MU) may very well hold an important key to the semiconductor groups. There is lots of support around 11 from the 62% retracement, broken resistance and the April trendline. The stock consolidated over the last two weeks - watch 11.6 up and 10.9 down.

By Arthur B. Hill - Wed 31-Aug-05 at 11:06AM in Stocks
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Qlogic Fails at Resistance

QLGC - Qlogic (QLGC) had a sudden change of heart. The stock retraced ~50% of the prior decline with a rising price channel. Both the retracement and the pattern are typical for corrective advances. There was a sudden reversal on high volume over the last two days and this stocks looks headed lower.

By Arthur B. Hill - Wed 31-Aug-05 at 11:05AM in Stocks
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Electronic Arts High Volume Break

ERTS - Electronic Arts (ERTS) broke rising channel support with high volume and this looks like a continuation of the prior decline.

By Arthur B. Hill - Wed 31-Aug-05 at 11:05AM in Stocks
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Wachovia Triangle Break

WB - After a decline to 50, Wachovia (WB) consolidated with a triangle and broke trendline support with good volume over the last six days.

By Arthur B. Hill - Wed 31-Aug-05 at 11:01AM in Stocks
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Monday - August 29, 2005

Starbucks and Gas

I love the Starbucks experience just as much as anyone. However, I must wonder when the rising cost of gas will cut into our Starbucks experience. Let’s face it. Starbucks is pricey and there are alternatives. You can downside your order (tall instead of grande), skip the muffin, buy the beans and brew at home or not go in at all. The latter would be rather drastic. However, I do think that at some time or another Starbucks is going to feel the heat of rising gas prices as consumers look for other ways to cut back.

But what about the chart? The stock peaked in January, formed a lower high in June and broke support last week. Remember, the S&P 500 moved to a new all time high in early August and SBUX is seriously lagging. In addition, a small head-and-shoulders pattern formed over the last two months and the late July gap failed to hold. I view the support break at 50 as bearish and would expect lower prices to follow.

By Arthur B. Hill - Mon 29-Aug-05 at 07:24AM in Stocks
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Thursday - August 25, 2005

QQQQ Inverted Hammer

QQQQ failed at 39.2 three times in the last six days and formed an inverted hammer with the latest failure on Wednesday. This is a bullish candlestick reversal pattern that requires confirmation. The bulls were able to rally the stock intraday, but not strong enough to hold these gains and the stock closed weak. Hence, the long upper shadow. A move above 39.2 would break resistance over the last six days, confirm the inverted hammer and reverse the short-term downtrend.

By Arthur B. Hill - Thu 25-Aug-05 at 09:52AM in Stocks
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Wednesday - August 24, 2005

Air Products Deflating

Air Products (APD) is a major player in the Chemicals industry and Materials sector. Weakness in this stock will filter through to both. On the price chart, the stock declined sharply in April and then formed a rising wedge in May and June. The stock broke rising wedge support, but managed to firm around 58-62 the last few weeks. That could be changing as APD failed at 61-62 and looks poised to break triangle support. In addition, MACD moved below its signal line and into negative territory.

By Arthur B. Hill - Wed 24-Aug-05 at 09:24AM in Stocks
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Hansen Natural

Recent selling pressure in Hansen Natural (HANS) points to at least a high level consolidation and possibly a correction that could lot off 20%. The stock peaked in late July with a harami and three long black candlesticks on high volume. There was a strong open in mid August, but this was met with selling pressure and another high volume decline. More recently a flag has taken shape and I would expect more downside. The next support zone is around 30 from the March-April consolidation.

By Arthur B. Hill - Wed 24-Aug-05 at 09:24AM in Stocks
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Myriad Genetics

Myriad Genetics (MYGN) is part of the hit biotech group. The stock broke trendline resistance in July and then formed a falling flag. These are corrections and the decline occurred on low volume, which indicators light selling pressure. Tuesday’s trendline break and surge on high volume signals a continuation higher and opens the door to the mid 20s. A move below 17 would challenge the breakout and a move below 16 would be bearish.

By Arthur B. Hill - Wed 24-Aug-05 at 09:23AM in Stocks
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Molecular Devices

After a gap and high volume surge above resistance, Molecular Devices (MDCC) settled back down with a falling wedge (magenta trendlines). These are corrective patterns designed to alleviate an overbought situation. Notice that broken resistance turned into support around 20 and the stock is starting to firm (gray oval). Two inverted hammers formed (23-Aug and 17-Aug). These show intraday buying pressure and further strength above the upper trendline would confirm these bullish candlestick reversals. Such a move would also solidify support around 20.

By Arthur B. Hill - Wed 24-Aug-05 at 09:23AM in Stocks
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Torchmark Volume

Insurance company Torchmark (TMK) is seeing good upside volume and a recent trendline breakout. The stock surged in late April/early May and then retreated the last 3-4 months. The April low held and the stock surged above trendline resistance with above average volume. This is not an exciting stock, but the move solidifies support at 50.5 and I would look for it to work higher in the coming weeks.

By Arthur B. Hill - Wed 24-Aug-05 at 09:22AM in Stocks
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Tuesday - August 23, 2005

Ryland Still Sane

Despite a sharp decline in August, John Dorfman of Bloomberg likes Ryland Homes (RYL) and gives it the right to stay in his “sane portfolio”. Dorfman is looking ahead 12 months for this portfolio and it is likely to outperform the overall market in an uptrend.

On the price chart, RYL is trading right at support and is oversold. Broken resistance around 71 and the October trendline converge to affirm this support area. In addition, the August decline marks a 50% retracement of the Apr-Jul advance. RSI moved below 40 for the fourth time in 12 months and prior dips occurred close to a bottom in the stock. A bullish catalyst is needed at this point. This might include a gap, candlestick reversal or high volume bounce.

By Arthur B. Hill - Tue 23-Aug-05 at 07:15AM in Stocks
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Corny Energy

Archer Daniels Midland (ADM) surged on an upgrade from a Citigroup analyst and a plug on Mad Money with James Cramer (TheStreet.com). Both see lots of potential from corn-derived ethanol and plastics. These two areas benefit as other energy (petro) prices rise.

The stock remains in a long-term uptrend (blue trendline), but suffered a setback earlier this year with a sharp decline below 20. Broken resistance turned into support and the stock bounced back with the rest of the market over the last few months. Yesterday’s gap reinforces support at 20 and this is the level to watch for a failure. The bulls have regained the upper hand with the gap, but will loose it should the stock decline below 20 and fill the gap.

By Arthur B. Hill - Tue 23-Aug-05 at 07:15AM in Stocks
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Monday - August 22, 2005

PD Gaps Lower

There are three types of gaps: breakaway, continuation and exhaustion. A breakaway starts a trend, a continuation continues a trend and an exhaustion gap ends a trend. Phelps Dodge gapped down on Wednesday and then consolidated above 105. The gap has yet to be filled and should be considered breakaway (bearish) unless there is a move above 111. Further weakness below 105 would further confirm the gap and argue for a move towards the support zone around 95.

By Arthur B. Hill - Mon 22-Aug-05 at 06:42AM in Stocks
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JNJ Consolidates

The Vioxx ruling on Friday hit Merck and the HealthCare sector pretty hard. Even Johnson & Johnson (JNJ) was knocked for a loss on the day. Despite Friday’s decline, JNJ remains in a consolidation with a potentially bullish setup. First, the stock retraced 50% of the prior advance. Second, the decline formed a falling price channel. Both are typical for corrections and a breakout would be bullish. The stock has consolidated between 62.5 and 65.5 the last three weeks. A move above 65.5 signals a continuation higher and opens the door to a test of the April high. The bears have the upper hand until there is a breakout to reverse the five month decline.

By Arthur B. Hill - Mon 22-Aug-05 at 06:42AM in Stocks
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Tuesday - August 16, 2005

Disney Perks Up

After a big run from Aug-04 to Feb-05, Disney (DIS) has been in corrective mode the last several months. The stock bottomed in early July with a surge on good volume. A falling flag then took shape and the stock moved higher the last four days. Upside volume was strong three of the last four days and a break above 26.5 would be bullish.

By Arthur B. Hill - Tue 16-Aug-05 at 07:43AM in Stocks
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Silver Stock Breakout

It is hard to argue with this breakout. Coeur D’Alene (CDE) surged in late May, consolidated around 3.5 and then surged again in early August. The move broke resistance on high volume. Low priced stocks have above average risk and this one is no exception. A move below 3.5 would be negative and a move below 3.25 bearish. Until such a move, I would look for higher prices in the coming months.

By Arthur B. Hill - Tue 16-Aug-05 at 07:41AM in Stocks
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Monday - August 15, 2005

Guru Picks Value

Guru Investor, John Reese, is out with seven new picks on the MSN Strategy Lab (click here). In particular, Reese added Cooper Tire & Rubber (CTB). His picks usually show strong rising price charts and most have recorded recent 52-week highs. CTB is a bit unusual in that the stock has been trending lower since mid 2004 and recently formed a lower high (~21). There is a lot of support around 16-17 that extends back to the Dec-02 highs. With the stock coming into this support zone, the risk-reward ratio is improving for new longs. However, I would wait for some evidence of support and a short-term (candlestick) reversal.

By Arthur B. Hill - Mon 15-Aug-05 at 08:06AM in Stocks
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Overstock Overthetop

Herb Greenberg of CBS MarketWatch (click here) thinks lawsuits are distracting from the real issues at Overstock.com. Herb usually finds the cup 1/2 empty. Similarly, Seth Jayson at The Motley Fool (click here) finds plenty of reason for concern over the latest public relations surge. On the price chart, OSTK surged above resistance with high volume on Friday. Looks like a bullish breakout. However, this is the first day of big upside volume since, well, early February. This suggests a bit of short covering and I don’t see much upside volume in the base. The stock has a lot of resistance between 50 and 60 with my ideal reversal point around 55.

By Arthur B. Hill - Mon 15-Aug-05 at 08:04AM in Stocks
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Wednesday - August 10, 2005

Are Donuts Back?

Atkins Nutritionals filed for bankruptcy last week and carbs are making a comeback. So is Krispy Kreme. After a bottoming in February, the stock formed a large triangle over the last several months and recently bounced off the lower trendline with good volume in early August (green carets). The pullback over the last four days was on low volume and the stock is moving again today. This reinforces support at 6.9 and the next resistance area is around 9.

By Arthur B. Hill - Wed 10-Aug-05 at 10:47AM in Stocks
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Merck Stabilizes

Merck (MRK) is firming near a key retracement and should be watched closely for a breakout. The decline over the last three months retraced 62% of the prior advance. This Fibonacci retracement is typical for corrections and the stock consolidated since mid June (gray oval). There is a lot of support around 30 and a break above 32.5 would signal a continuation of the Jan-Apr advance. The stock yields 4.9%, but the company may not be completely out of the woods with regards to Vioxx.

By Arthur B. Hill - Wed 10-Aug-05 at 10:47AM in Stocks
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Tuesday - August 09, 2005

BSX Finds a Bid

This is one for the bottom pickers out there as Boston Scientific (BSX) has had problems with its stents and a number of recalls. Since the free fall at the end of May, the stock stabilized between 27 and 29. An ascending triangle formed over the last few months and upside volume has been outpacing downside volume since early June. A break above the late July high would bullish and could carry the stock back above 30.

By Arthur B. Hill - Tue 09-Aug-05 at 09:15AM in Stocks
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Sara Lee Reverses

Sara Lee (SLE) is in the first year of a five year restructuring and reported a 4th Quarter loss last week. However, the stock didn’t seem to mind as its opened weak and closed strong to form a huge outside reversal on high volume (green oval). At the very least, this solidifies support around 19-20. The stock sports a 3.82% dividend and the company just introduced white bread with 30% whole grains. It may take a while to payoff, but it is nice to get 3.82% while you wait.

By Arthur B. Hill - Tue 09-Aug-05 at 09:15AM in Stocks
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Mind the Gap

Mind the Gap Stores (GPS), not the price gap. GPS surged in Nov-Dec 2004 and then worked its way lower the next 7-8 months. The stock found support around 20 with a surge in early July and again in early August. Volume also surged and the stock looks poised to break resistance.

By Arthur B. Hill - Tue 09-Aug-05 at 09:14AM in Stocks
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Wednesday - August 03, 2005

Notable Stocks

BNN - Brascan had a blistering 2004 with an advance to 40 and then consolidated with a large triangle. Upside volume remains strong and a move above 39.2 would signal a continuation higher..

CPN - Calpine gapped higher in May and surged to resistance around 3.5. After a six week conoslidation, the stock broke resistance on expanding volume. Higher prices are in store as long as key support at 3 holds.

CTL - CenturyTel has two bullish patterns working. First, a large inverse head-and-shoulders with a neckline breakout at 35. Second, a falling flag with a breakout at 35. Upside volume expanded and a move below 33 would be bearish.

NEM - Newmont is coming back to life with a falling flag and break above the upper trendline. Also notice that the stock gapped higher on 20-Jul and this gap is holding. A break above 39 would seal the bullish deal.

NOVN - Noven Pharma is coming to life with a falling wedge breakout on good volume.

ULBI - Ultralife Batteries could not hold its early July gap and filled it almost immediately. This shows weakness. The stock gapped down on Tuesday with high volume and this stock appears headed lower.

By Arthur B. Hill - Wed 03-Aug-05 at 08:46AM in Stocks
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Wednesday - July 27, 2005

Chart Setups

Here are potentially bullish setups from a recent screen. Standard disclaimers apply: use at your own risk.

CHIR - Chiron can't quite make up its mind. A triangle formed over the last six months. Watch 37.5 up and 34 down.

EDS - Well, what's it going to be boy? EDS surged in May and then consolidated in June and July. A break above the May high (20.1) would be bullish and a break below the June low bearish.

NWAC - This is still a bottom picking play, but signs of a rebound are appearing. The stock recovered after the move below 4, surged on good volume in early July, formed a falling flag and broke the upper trendline with good volume.

NWAC - This is still a bottom picking play, but signs of a rebound are appearing. The stock recovered after the move below 4, surged on good volume in early July, formed a falling flag and broke the upper trendline with good volume.

NYB - After basing around 17.5 for the last seven months, NYB broke resistance with good volume. This bank has a nice dividend and the breakout signals a move to 21.

RSAS - Here is a nifty little trendline break on above average volume. The stock held firm at 11 after the 30-June and 22-July down gaps. A break above 13.5 opens the door to 17-18.

By Arthur B. Hill - Wed 27-Jul-05 at 08:54AM in Stocks
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Tuesday - July 26, 2005

Symantec Stalls

Before even starting to comment, Symantec (SYMC) reports earnings on Thursday and this will most likely move the stock. On the price chart, the stock surged in May, consolidated in June and broke resistance in July. Upside volume was strong and broken resistance turned into support around 23.7. The price chart is clearly bullish.

Earnings season is a difficult time for trading, but recent price action suggests a bullish report. A move below 23.5 would negate the breakout and call for a reassessment. For now, the breakout is holding and further strength towards 25-27 is expected.

By Arthur B. Hill - Tue 26-Jul-05 at 07:37AM in Stocks
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Vodafone Rings

Vodafone (VOD) formed a classic correction and the recent bounce increases the odds of a bigger breakout. The Dec-Jul decline retraced 62% of the prior advance with a falling price channel. Both the pattern and the retracement are typical for corrections.

After a high volume dip below 24 in early July, the stock recovered with a bounced back above 25. Volume has started to pick up over the last five days and a break above 26 would be most positive. This would signal a continuation of the Jul-Dec advance and target a move above 30.

By Arthur B. Hill - Tue 26-Jul-05 at 07:36AM in Stocks
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Monday - July 25, 2005

Valero Candlesticks

Serious selling pressure hit Valero (VLI) in early July, but the lower channel trendline and recent candlesticks suggest a reversal in the making. Over the last four days, the stock formed a hammer (19-Jul), a white candlestick, an inverted hammer (21-Jul) and a bullish engulfing on Friday. Upside volume was big on Friday and there is not lots of support between 57 and 58.

By Arthur B. Hill - Mon 25-Jul-05 at 09:26AM in Stocks
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RIG Breakout

Here is a classic setup. Transocean (RIG) is clearly in an uptrend and consolidated over the last five weeks. The stock closed above its June high on big volume. The pattern looks like a flag and the breakout targets a move to 68-69. Flags are said to fly at half-mast and the flag represents the mid point of the move. Key support is set at 53 and a move below this level would be bearish.

By Arthur B. Hill - Mon 25-Jul-05 at 09:26AM in Stocks
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Thursday - July 14, 2005

Imgram and Price/Sales

John Dorfman of Bloomberg, thinks that Ingram Micro and Sonoco look cheap based on price/sales. Not only is IM cheap on price/sales, but the stock is bouncing off support with good volume. The first gap at the end of April failed, but the stock held support in mid June. The late June bounce off support occurred on good volume and this stock looks headed higher. Support from the April-June lows now holds the key.

By Arthur B. Hill - Thu 14-Jul-05 at 10:46AM in Stocks
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Ga ga over Google

Lehman is raising its target on Google to $350. Lehman thinks that the paid search portion of the business will fuel higher than expected revenue growth. On the price chart, this means a run to the upper trendline of the rising price channel. This is definitely doable as long as 288 holds.

By Arthur B. Hill - Thu 14-Jul-05 at 10:45AM in Stocks
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Wednesday - July 13, 2005

Notable Charts

ADLR - After a long consolidation, Adolor broke resistance with a four day surge on big volume. The first target is 15 and a move below 9 would be bearish.

ATK - Alliance Tech Systems broke triangle resistance over the last two weeks and shows good relative strength.

CDN - Cadence Design Sys broke consolidation resistance by advancing for 10 days straight.

CTB - Cooper Tire is at its make-or-break level. The stock remains in a falling price channel (blue trendlines) and the current advance retraced 50-62% of the prior decline. Either the stock breaks the June high and moves to 23-24 or break the June low and moves to new lows.

FINL - Finish Line retraced 62% of the April decline with a move back to 21. This level marked resistance and the stock broke support at 19 with increasing volume. The next target is support around 15. Watch for a move above 19.5 to negate the signal.

HD - Retail is hot and Home Depot broke consolidation resistance with a surge in volume. The next target is the November high around 44 and a move below 38 would be bearish.

JDSU - Can JDS Uniphase do it? The stock surged in May with good volume and then consolidated in June/July. Volume perked up again yesterday and a break above 1.8 opens the door to 3.2.

NOVL - I have been following Novell since the inverse head-and-shoulders started forming. The stock failed to hold the first resistance breakout, but managed to firm after the late May gap down. The stock consolidated just above 6 and moved higher on good volume the last two days. The first target is 7.7 and a move below 5.9 would be bearish.

SBC - SBC Corp is part of a lowly telecoms group that is about to get broadband competition from the electric utilities. The stock consolidated from mid March to now and needs to break above 24.5 to turn the price chart bullish. Notice that On Balance Volume already broke to new highs as upside volume outpaces downside volume.

SKWY - Skywest is locked in a triangle and the trading range narrowed over the last two months. Watch 19.5 up and 17.5 down.

TLCV - For the second time in three months, TLC Vision is bouncing off support at 8 with good volume. The key is follow through and the stock needs to move above 9 to complete a breakout and trend reversal.

By Arthur B. Hill - Wed 13-Jul-05 at 10:44AM in Stocks
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Wednesday - July 06, 2005

Notable Charts

AMD - Advanced Micro Devices surged in May and consolidated in June. The consolidation looks like a big flag and a break above 18.5 would be bullish. Conversely, a break below 16.5 would be bearish.

AW - Allied Waste is showing some good relative strength in June and July. This is a turnaround play with positive insider buying. The chart sports a bullish bias and a move below 7.5 would be bearish.

CKP - Checkpoint Systems broke triangle (magenta trendlines) and flag (gray oval) resistance at 18. Volume could have been higher though. Watch support at 17 for a failure.

HAS - Hasbro broke flag resistance with a surge in volume. Watch the June lows (19.8) for a failure.

JCOM - J2 Global Comm dropped sharply in March, consolidated and the broke consolidation support in June. This signals a continuation lower with a dowside target below 30. Watch the mid June highs (36.1) for proof otherwise.

NSIT - Insight shows good relative strength with a pennant breakout around 20. Watch the June lows for a failure and trend reversal.

By Arthur B. Hill - Wed 06-Jul-05 at 11:17AM in Stocks
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Wednesday - June 29, 2005

Notable Charts 050629

BEAS - Bea Systems broke above falling price channel resistance with a surge in May. The stock consolidated in June and upside volume remained strong. Upside volume is clearly outpacing downside volume. The stock broke consolidation resistance on Tuesday. The first target is 12 and a move below 8 would be a bearish.

FL - Upside volume is picking up in Foot Locker. The stock formed a hammer on 20-June, surged above the blue trendline and gapped up on Tuesday. Further strength above 27.2 opens to the door to 30 and a move below 25.8 would be negative.

GOOG - Google was featured on 22-June with a falling flag breakout. The target then was above 300 and it has been hit. Watch the trendline extending up from mid April and 23-Jun low for signs of a trend reversal. This would also be a good time to close part of the position.

GYMB - GYMB surged above resistance with a high volume move in late May. The stock formed a falling wedge (bullish consolidation) and broke above the upper trendline on Tuesday. This signals a continuation higher and the first target is 16. Watch the late June low for signs of failure.

JP - Jefferson Pilot broke resistance with a surge at the end of April and then formed a bullish ascending triangle. The stock broke resistance at 51 to signal a continuation higher and target 55. Volume was a big low and traders should watch 50 for a failure.

NOVL - Despite bad earnings and a gap down in late May, NOVL firmed above its April-May lows. The stock surged in late May, formed a flat flag and moved sharply higher on Tuesday. You gotta like this price action. First target is 7.7 and a move below 6 would be bearish.

RX - Caremark fell sharply in June, but formed a higher low to keep the ascending triangle alive. More importantly, upside volume over the last eight days has been strong and a resistance breakout at 25 looks likely. Watch support at 23 for a failure.

SYNA - This stock continues to look good with its second high volume surge in June. The stock broke above the upper trendline and closed at its highest level of the month. A move below 19 negates this pattern and turns the outlook bearish.

WITS - Witness Systems broke falling price channel resistance with a strong move in June that featured good volume and gaps. This also shows good relative strength as the rest of the market was weak.

XRX - The cup is currently half full for Xerox. The stock broke falling price channel resistance with a good advance the last few weeks. The early June gap is holding and upside volume is has been outpacing downside volume. This is a bounce off support (12.5-13) that extends back to Jan-04. The upside target is 17-18 and traders should watch the gap low (13.29) for a failure.

BEAS, FL, GOOG , GYMB, JP, NOVL, RX, SYNA, WITS, XRX

By Arthur B. Hill - Wed 29-Jun-05 at 09:51AM in Stocks
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Thursday - June 23, 2005

Notable Charts 050623

CVG - It looks like a continuation lower for Convergys. The stock has a large head-and-shoulders reversal working, gapped lower in late April, stalled in June and declined on high volume yesterday.

IM - Ingram Micro surged in late April and broke trendline resistance. However, the stock returned all the way to support. There was another surge on good volume over the last two days and a run to resistance is in the cards.

INCY - Incyte, a biotech company, surged in early May, formed a falling flag and then broke resistance on good volume. This is still a bottom picking play and low priced stocks always have above average risk.

RMBS - Rambus cannot keep a bid. This company is not making any new products and pretty much lives on the hope of successful lawsuits. The stock gapped down two weeks ago, the gap remains and the stock recently broke trendline support.

SYNA - SYNA is coming alive for the second time this month. The stock bottomed in May, advanced on good volume in early June and bounced yesterday. Volume could have been higher.

By Arthur B. Hill - Thu 23-Jun-05 at 11:01AM in Stocks
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Tuesday - June 21, 2005

Notable Charts 050621

CDN - Cadence Design Sys broke rising wedge support, but firmed over the last few weeks with a trading range. The gap two days ago and resistance challenge are impressive. Watch for a move above 14.5 for a breakout and a move below 13.5 for serious weakness.

CL - Consumer Staple stock Colgate Palmolive got a gap and big bounce off support with good volume. This opens the door to a resistance challenge at 55 and it would take a move below 48 to turn bearish.

DDS - Dillards recovered after the big gap down, but upside volume was relatively light on the way up and volume has started to increase as the stock declined the last few days. Unless the stock can break above 26, I expect lower prices.

IPS - Ipsco has a lot of resistance just below 55 and recently gapped lower on high volume. As long as this gap remains unfilled, I will treat it as a bearish breakaway and expect lower prices as long as key resistance at 55 holds.

MMM - 3M holds an important key to the Dow. The stock has been consolidating the last few weeks. Watch 79.25 up and 75 down.

RCII - Rent-A-Center formed a triangle over the last few weeks and a move below 23 would signal a continuation of the prior decline.

RDWR - Radware recovered from a gap down and support break in late April. The stock advanced in the first part of May, but peaked in mid May and has underperformed the Nasdaq since mid May. Downside volume is starting to increase and this stock looks headed lower. A move above 24 would suggest otherwise.

TKR - Timken has a ton of support around 23 and surged over the last five days. Volume increased over the last two and the gap off support is bullish unless proven otherwise with a move below the June low. The upside target is 29-30.

By Arthur B. Hill - Tue 21-Jun-05 at 07:24AM in Stocks
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Monday - June 20, 2005

Notable Charts 050620

BVF - Biovail firmed in early May and then consolidated with a flat flag. The stock got a bounce last week, but volume was not that impressive and I would still like to see a close above 16.5 before turning bullish.

CTX - Centex formed a breakaway gap in mid May and surged to new highs in June. Friday's gap could be an exhaustion gap, but not until it is filled with a move below 69. A gap down and long black candlestick today would forge a most ominous candlestick reversal.

IBM - If the May rally is to continue, IBM needs to join in or lead with a breakout at 78. Otherwise…..

IMOS - Chipmost tech broke above the upper trendline of a falling price channel. The stock advanced five days straight and volume was above average. Hmmm…..

LLY - Lilly surged in April and broke resistance at 58 with good volume. The stock consolidated in May and formed a falling flag over the last four days. The trendline break is a start, but volume needs to increase to validate a continuation of the April surge.

LQI - La Quinta remains a strong stock within the consolidation. Notice how the stock gapped down at the end of May, firmed and then surged on good volume the last few days. A breakout at 9.5 looks imminent. Watch key support at 7.9 to turn bearish.

MLNM - Nothing like a little Mad Money to stir things up. However, On Balance Volume was strong even before Friday's Velcade announcement and Cramer's plug. Notice that OBV held above its March low when the stock tested its March low. By and large, upside volume has outpaced downside volume and this shows accumulation.

QCOM - QualCom is not helping the Nasdaq one bit. The stock broke double top support with a gap down in January, rallied back to broken support (now resistance) and the broke rising price channel support with a high volume decline over the last two weeks.

TER - Teradyne surged on good volume in May, consolidated with a falling flag in June and gapped higher on Friday. The stock even closed strong and upside volume was respectable. This opens the door to 16 with key support at 12.8.

ULBI - Ultralife Batteries was highlighted for its weak relatively performance and downtrend on 10-Jun. The stock has since broke below 16 and a trip to support around 10 looks in order.

WERN - Werner managed to firm after the gap down and then surged on big volume. The gap is looking like an exhaustion gap and a move above 20 would be bullish.

By Arthur B. Hill - Mon 20-Jun-05 at 09:45AM in Stocks
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Thursday - June 16, 2005

Notable Charts 050616

***Bearish*** Air Products (APD) sports a bearish pattern. After the Mar-Apr decline, the stock formed a rising wedge that retraced (surprise, surprise) 62%. The pattern and the retracement are classic for corrective advances. The stock has stalled over the last few weeks and declined on high volume yesterday. A move below 59.8 would trigger a bear signal.

***Bullish*** US Steel (X) declined from 65 to 38 and found support in mid May. The stock caught my attention with a gap up and long white candlestick on good volume yesterday (green carets). The move broke trendline resistance and further strength above 42 would break the late May high.

By Arthur B. Hill - Thu 16-Jun-05 at 04:44PM in Stocks
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Wednesday - June 15, 2005

Notable Charts 050615

Stocks opened strong with a gap across the board, but strength fizzled in the first 10 minutes and the major indices dropped sharply the next hour and 20 minutes. With such a weak start on the day and a failed gap, I will post a few bearish charts today.

Good day and good trading.

The Bears

***Bearish*** Barr Labs (BRL) gapped down in early May on high volume and then formed a rising wedge with the advance back to 52. A big bad bearish engulfing formed last week and the stock gapped down on Tuesday. The downside target is 45-46 and a move above 52.1 would negate this signal.

***Bearish*** Joy Global (JOYG) met resistance just below 40 with a big bearish engulfing. This bearish candlestick reversal was confirmed with a break below the lower trendline of a rising wedge. A small flag formed over the last few days and a move below 34 would open the door to a support test at 30.

***Bearish*** Checkfree (CKFR) broke trendline support in mid April and bounced with a feeble advance back to 38 in mid May. The move formed a bearish rising wedge and the stock severely underperformed the Nasdaq in May. CKFR broke trendline support in late May and below its prior low with a sharp decline last week. A move to the low 30s is expected and a move back above 38 would negate this bearish forecast.

***Bearish*** Automatic Data Processing (ADP) was first featured on 1-Jun and the stock broke triangle support with good volume early last week. The break opens the door to a support test around 40.

***Bearish*** Priceline (PCLN) looks sick. The stock gapped lower in early May and the top of the gap acted as resistance. The stock failed to partake in the May advance and is on the verge of breaking the lower trendline of a rising wedge. The bear signal has already been given and a move below 22 opens the door to 18. Watch resistance at 25.5 to turn this chart positive.

By Arthur B. Hill - Wed 15-Jun-05 at 11:17AM in Stocks
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Friday - June 10, 2005

Notable Charts 050610

FDX IR LQI MDCO MHS
QCOM TK UCOMA ULBI UVN

By Arthur B. Hill - Fri 10-Jun-05 at 05:51AM in Stocks
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Wednesday - June 08, 2005

Notable Charts 050608

Air Products formed a potentially bearish rising wedge over the last few weeks and two shooting stars over the last three days. A move below 59.8 would be bearish.

Alcoa has been plagued by lack of follow through and remains in a downtrend with downside volume above average. The stock surged in mid May and needs to break above 28.15 for a continuation higher.

Anheuser Busch (BUD) surged in April on news of Buffet’s buy. The stock has since consolidated and formed a triangle. A move above 48 breaks resistance and signals a continuation higher.

Andrx (ADRX) shows signs of accumulation with three high volume moves in the last six weeks. The stock broke trendline resistance in mid May and a move above 21.1 would be bullish.

Merrill Lynch (MER) declined sharply in Mar-Apr and then formed a rising flag (bearish). The stock has stalled over the last three weeks. Watch minor support at 54 for early signs of weakness and resistance at 56 for a breakout.

Maxtor (MXO) is part of a strong disk drive group and broke neckline resistance of a large inverse head-and-shoulders with expanding volume.

SPY formed a shooting star yesterday, but remains in an uptrend with waning upside momentum.

By Arthur B. Hill - Wed 08-Jun-05 at 05:44AM in Stocks
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Tuesday - June 07, 2005

Notable Charts 050607

AVP BOL CG CHB CNO
EMMS FDC IPCC JOYG MEDI RDA

By Arthur B. Hill - Tue 07-Jun-05 at 07:30AM in Stocks
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Friday - June 03, 2005

Notable Charts 050603

DD MSFT QCOM NOVL PFE FDC VIA.B

By Arthur B. Hill - Fri 03-Jun-05 at 04:41PM in Stocks
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Thursday - June 02, 2005

Notable Charts 050602

AIN, BLS, BMC, CNET, DPL, GIS, HRB, IBM, LGF, WSTL

By Arthur B. Hill - Thu 02-Jun-05 at 10:58AM in Stocks
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Wednesday - June 01, 2005

Notable Charts 050601

ADP ASPT CNP COHR EP
ICOS MDCC MHS MLHR STGS

By Arthur B. Hill - Wed 01-Jun-05 at 07:13AM in Stocks
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Tuesday - May 31, 2005

Notable Charts 050531

ALKS AXS BNE CHIR KFT
KSS MDR PKS PLMD TECD

By Arthur B. Hill - Tue 31-May-05 at 07:30AM in Stocks
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Friday - May 27, 2005

Notable Charts 050527

CMGI DECK EP HAIN INFA JCOM
MXO NTIQ PCLN PSSI WMB

By Arthur B. Hill - Fri 27-May-05 at 06:39AM in Stocks
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Thursday - May 26, 2005

Notable Charts 050526

CAM CKFR GRP IRM JCOM LLL
PCLN SUPG TTC TTWO UIS WIND

By Arthur B. Hill - Thu 26-May-05 at 07:34AM in Stocks
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Wednesday - May 25, 2005

Notable Charts 050525

AIRT AVT CRB HON IIH
NDX ODFL PLUG RTH SML SONC

By Arthur B. Hill - Wed 25-May-05 at 08:11AM in Stocks
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Tuesday - May 24, 2005

Notable Charts 050524

AAI AXE BLS BSG CMCSA
COCO GE HMT MXO NOVL
NYB PPDI RDC TIVO TLAB

By Arthur B. Hill - Tue 24-May-05 at 07:46AM in Stocks
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Monday - May 23, 2005

Notable Charts 050523

AMD CECO DIA LQI MHP
PFGC PKG PLCE PPP STGS

By Arthur B. Hill - Mon 23-May-05 at 07:50AM in Stocks
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Friday - May 20, 2005

Notable Charts 050520

CBRL HAIN HRB KYPH MXO
RAD RMBS STGS TWX UCOMA

By Arthur B. Hill - Fri 20-May-05 at 02:37PM in Stocks
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Thursday - May 19, 2005

Notable Charts

This is a list of notable charts. Click the “continue reading” link below to view the charts.

AIT broke triangle resistance and surged to a new high for 2005.

APOL recovered from the early May gap (exhaustion) and broke trendline resistance.

BMET firmed after the gap and held above the low in early May - look for a break above 40 to revive the bull.

FHR is part of a strong hotel group as the stock broke triangle resistance.

FNM broke triangle resistance with a surge in volume.

GE broke resistance on expanding volume and this is good for large caps.

LIN firmed immediately after the March gap and got a bounce off support with good volume Wednesday.

NYB yields 5.6% and is finding support. Despite the bearish descending triangle, upside volume is picking up at support.

ODFL declined to a support zone and upside volume is starting to pick up - watch resistance at 30.

ORB broke resistance on high volume. This is also a follow through to the two up gaps (21-Apr and 5-May)

SGMS broke falling wedge resistance with an advance on good volume.

SPW gapped up off support in early May and continued higher with expanding volume on Wed.

UTX and other defense stocks are leading. UTX broke its March high on expanding volume.

Continue reading "Notable Charts"

By Arthur B. Hill - Thu 19-May-05 at 08:35AM in Stocks
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Wednesday - May 18, 2005

Notable Charts

This is a list of notable charts. Click the “continue reading” link below to view the charts.

ABS consolidated and then moved above resistance with high volume.

CMGI failed to hold the March jump and is once again bouncing off support with a big move on good volume.

DLP found support at 25 for the four time and moved higher on expanding volume.

HANS remains in a clear uptrend, but there were four days of high volume selling pressure and this stock is way overextended.

INFA formed a long triangle and upside volume is looking fairly strong.

NSIT Mark Cuban's pick shows a classic retracement and rounding bottom - upside volume is low though.

PCLN has a large (bearish) rising wedge working since May-04 and recently gapped below support at 24.

SCUR got a high volume bounce in early April and then formed a falling flag - watch for a move aboe 10 to signal a continuaiton higher.

SLB returned to a support zone around 65 and firmed after a high volume decline last week.

TLAB surged above resistance in mid April and then formed a flag/pennant - watch for a move above 8.1 to signal a continuaiton higher

WSM found support near broken resistance and surged on pretty good volume yesterday.

Continue reading "Notable Charts"

By Arthur B. Hill - Wed 18-May-05 at 09:04AM in Stocks
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Tuesday - May 17, 2005

Notable Charts

This is a list of notable charts. Click the “continue reading” link below to view the charts.

ACGL broke resistance with a big move in Feb and then consolidated with a triangle in March and April. The stock broke resistance with a high volume move on Wed.

BBY continues to channel down since Nov-04 and a move to the August lows looks inevitable.

EP returned to broke resistance around 9.5-10 and retraced 62% of the prior advance. The stock is consolidating - watch 10.7 up and 9.8 down.

FDX broke double top support in mid April and then formed a rising flag. A move below 83 would be most bearish.

GE could hold the key to the S&P 500 as the stock consolidates between 35 and 36.7. Watch these levels for a directional signal.

GNTX has a double bottom working from Oct to May. Upside volume looks good and a break above 19 would be bullish.

IACI is finding buyers with above average gains on good volume for three of the last seven days. The stock broke resistance at 23 and should be bullish as long as 21 holds and Barry Diller stays.

MXO has an inverse head-and-shoulders working since Jul-03 with neckline resistance at 6.

ODSY continues to base and surged on good volume last week. Look for a move above 12.5 for a bullish trigger.

PGN first appeared on 25-Apr and has since gapped higher and move up on expanding volume

USIH has formed a base over the last few months and surged on good volume in early May. Watch for a break above the Dec high.

TSA advanced on high volume in March, formed a falling flag in April and ended with a nice gain on nice volume Monday.

Continue reading "Notable Charts"

By Arthur B. Hill - Tue 17-May-05 at 08:56AM in Stocks
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Monday - May 16, 2005

Fedex Leads Lower

Weakness in Fedex is not a good sign for the transport group, the market and the economy. As the movers and shakers of world-wide trade, freight companies form the backbone of the economy. This makes Fedex (FDX), UPS, Yellow (YELL) and JP Hunt (JBHT) leading economic indicators. These highly cyclical stocks advanced despite the rise in oil prices. Now that oil prices have started falling, these stocks have turned weak and started leading the market lower. These stocks should be happy that oil is falling and this blatant weakness is not a good sign.

Fedex (FDX) broke double top support with a high volume decline in mid April. Broken support turned into resistance around 90 as the stock consolidated the last few weeks. The pattern looks like a flag (gray oval) and a move below the April low opens the door to the mid 70s (green oval). As long as this stock remains below 90, the outlook for the group (transports), the market (SPX) and the economy is negative.

By Arthur B. Hill - Mon 16-May-05 at 03:21AM in Stocks
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Tuesday - May 10, 2005

Cisco Finds Volume

Cisco (CSCO), the leader in Networking, firmed after the mid April gap and found support at 17. More importantly, the stock bounced on above average volume last week and filled the 14-April gap. As you might have guessed, MACD and RSI also formed positive divergences. MACD moved above its signal line and RSI above 50. This is still a bottom picking play, but there is movement throughout the group and this bodes well.

By Arthur B. Hill - Tue 10-May-05 at 04:06PM in Stocks
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Monday - April 25, 2005

Buffet and Pier 1

Warren Buffet is certainly a legendary investor, but his approach requires patience and sometimes being wrong for extended periods.

In an SEC filing dated 30-Jun, Berkshire Hathaway disclosed that it had purchased 8 million shares of Pier 1 Imports (PIR), the home furnishing retailer. In contrast to alcoholic beverages (BUD), soft drinks (KO) and consumer products (PG), this is a cyclical business prone to economic fluctuations.

My wife and I like Pier 1 stores and can always find something to buy. However, that does not change the cyclical nature of the business. Should the economy and broader market tank, PIR will go down with the ship. In contrast, non-cyclical businesses like alcoholic beverages, soft drinks and consumer goods will hold up much better.

Looking at the price chart, the stock is bad shape for a cyclical. The blue line shows when the SEC filing hit the press and the stock spiked higher. However, a bad quarter hit the stock in August and it moved to a new 52-week low. There was a rebound with the broader market and the stock stalled in the first quarter of 2005. With another bad quarter, the stock gapped down, broke support and is close to its 52-week low. More importantly, the stock is underperforming the broader market and shows poor relative strength. As long as this gap remains unfilled (18), sellers are clearly in control and I would avoid this stock, even if I could buy it cheaper than Buffet.

By Arthur B. Hill - Mon 25-Apr-05 at 11:01AM in Stocks
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Buffet Likes BUD

The word is out: Buffet likes Budweiser - or at least the parent company’s stock. Berkshire Hathaway reported in a press release that the company has acquired a “significant stake” in Anheuser-Busch. News sent the stock soaring and the Buffet-ologists scrambling.

The purchase makes a lot of sense and fits with the themes echoed in Procter & Gamble, Gillette and Coca-Cola. These companies are not that exciting, but they do generate large amounts of free cash flow, have well established consumer brands, wide moats and strong balance sheets.

Judging from the price chart, it is likely that investors can buy BUD at the same price or less than Buffet’s average. The stock declined from 55 to 45 over the last 9-10 months and my guess is that Buffet’s average is around 50. Also notice that the stock got a good bounce off support at 45. This level acted as resistance in 2001 and then turned into support with tests in Jan-02, Jul-02, Mar-03 and Apr-05. BUD doesn’t move a lot as the stock traded between 43.65 and 55 for over three years. As such, it makes sense to buy near support and not at resistance.

Keep in mind that this is a long-term position. Don’t expect this stock to double within a year. It is possible, but highly unlikely. Buffets looks upon this investment as he does all of his investments: as if he is buying the whole company or the whole business. Therefore, his time horizon is likely to be many years.

By Arthur B. Hill - Mon 25-Apr-05 at 11:00AM in Stocks
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Friday - April 22, 2005

The Microsoft Key

For clues on the Nasdaq, I am turning to none other than Microsoft (MSFT). In addition, MSFT will play a big part in the success or failure of the Software HOLDRS (SWH).

On the price chart, the stock retraced 62% of the Mar-Dec advance with a decline to around 24. This is normal for a retracement and support is reinforces by the Aug-Sep lows. More importantly, the stock is starting to attract upside volume (green carets) and shows good relative strength. While the Nasdaq moved to new lows in early April, MSFT held above its late March lows. The stock advanced sharply on above average volume on Thursday. This was a catalyst type move and further strength above 25.5 would confirm. A move below the late March low (23.8) would be bearish.

By Arthur B. Hill - Fri 22-Apr-05 at 02:43PM in Stocks
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Wednesday - April 20, 2005

Siebel Activity

Siebel Systems (SEBL) has a lot of cash and a lot of volume. There are rumors swirling of a LBO similar to the one seen with Sunguard Data Systems or that perhaps Oracle or SAP may be interested. These are just that: rumors. I am not here to confirm, deny or promote such rumors, but have noticed some unusual volume in the stock. In addition, a few options analysts have noted “unusual” activity in the SEBL options.

This first chart shows that SEBL has traded the highest monthly volume since 2002. This is just 20-April and there are seven trading days remaining. At this rate, SEBL is on course to trade the highest monthly volume ever this month.

This second chart provides the technical outlook. The stock gapped above resistance in October and this resistance area turned into support. The decline over the last few months retraced around 62% of the Aug-Dec advance and formed a falling price channel (blue trendlines). After a weak earnings report and gap down in early April, but stock immediately recovered and firmed. This is quite positive and further strength above the early April high (9.66) would be quite bullish.

By Arthur B. Hill - Wed 20-Apr-05 at 11:05AM in Stocks
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Tuesday - April 19, 2005

Battle of the Blubber

Barron’s (click here) covers the HealthCare sector this week and singles out some of the diet stocks (Weight Watchers WTW, eDiets DIET and Nutrisystems NSI). The article sites media reports that assert the following:

- 37% of Americans over 60 will be obese by 2010
- 71 million people are on some kind of diet program
- The weight loss market will grow from $46.3 billion in 2004 to $61 billion in 2008.

Those are some amazing numbers and point to years of demand to battle the blubber.

The chart for WTW shows a decline back to broken resistance just above 40. A key tenant of technical analysis is that broken resistance turns into support. Also notice that the Feb-Apr decline looks like a falling wedge that retraced 50-62% of the Aug-Jan advance. The stock broke trendline resistance on Monday, but volume was not that impressive. Before becoming enamored with this stock, I would like to see higher upside volume and a break above the 31-Mar high at 43.

By Arthur B. Hill - Tue 19-Apr-05 at 07:32AM in Stocks
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TXN Earnings & Chart

Texas Instruments (TXN) reported earnings Monday after the close and the stock advanced after the announcement. Earnings were up and revenues were flat. While an increase in earnings is certainly positive, I am always skeptical when top line (revenue) growth is sluggish or non-existent. You can only cut cost and improve efficiencies for so long. At some point, revenues need to grow for earnings to improve. The stock was up after hours because of the CEO’s upbeat statements: high inventories are coming to an end and the environment is improving.

But what about the chart? TXN still shows good relative strength in 2005. While the Nasdaq and S&P 500 moved to new 2005 lows last week, TXN held above its late January low. Notice that the stock formed an island reversal at the January low. TXN firmed after Friday’s gap and is slated for a gap up today (Tuesday). Should this gap hold, another island reversal would form and a move above 24.5 would break the trendline extending down from early March.

By Arthur B. Hill - Tue 19-Apr-05 at 07:16AM in Stocks
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Monday - April 18, 2005

Insider Buying at RSTO

Barron’s Online (click here) reports a big insider purchase at Restoration Hardware (RSTO). This is a turnaround play in the home furnishings business. In the SEC filing, Glenn Krevlin, a director, bought over 500,000 shares on behalf of some private funds.

And the chart doesn’t look half bad either. The stock failed to partake in the Aug-Dec market advance, but held up quite well in January. Perhaps those purchases put a floor on the stock. The stock formed a triangle over the last 5-6 months and broke resistance with good volume in April. This is one of the few stocks trading at a new high for 2005 and shows good relative strength. There is a ton of support around 5 and risk in new positions would be on a move below the Sep-Oct lows (4.82).

By Arthur B. Hill - Mon 18-Apr-05 at 03:17PM in Stocks
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Thursday - April 14, 2005

TIVO Breaks Through

Tivo (TIVO) seemed like a has-been just a few weeks ago. However, news of a deal with Comcast (CMCSA) brought the stock back to life. Not because of just one deal, but because of the prospects for other deals. TIVO already has a great brand and cable’s entry into the DVR market threatened to derail sales. Now that TIVO has signed one deal, the prospects for other deals and sales have increased dramatically. These deals are likely to provide a catalyst for TIVO in the future.

TIVO is also looking into generating revenues with targeted advertising. TIVO knows what you watch and Google knows what you surf. Google has been extremely successful with targeted adverts and TIVO can do the same based on user patterns. The big question is: how will TIVO show the ads without drawing the wrath of its users?

By Arthur B. Hill - Thu 14-Apr-05 at 10:32AM in Stocks
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IMAX in Asia

On April 8, IMAX reported that the company signed a deal to open another theater in China and will have 23 theaters operating there by 2008. IMAX has inked contracts for 12 new theaters in the last 8 months as it expands across Asia. On April 13, the company reported a deal to open 4 theaters in Korea.

My view: Polar Express was a big hit for IMAX and the big screen theater has no real competition. There is only one IMAX and this makes it a unique offering. The stock has a forward PE of 21, a PEG of .92, a $360 million market cap and $160 million in debt. Revenues are growing in double digits and this Asian expansion should create a steady income stream. It is a great concept for which there is little, if any, competition at the moment.

By Arthur B. Hill - Thu 14-Apr-05 at 10:06AM in Stocks
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Wednesday - April 13, 2005

Morbid Investing

Barron’s Online (click here) profiles funeral home operator Stewart Enterprises this week. The story goes on to tout reduced debt, a reinstated dividend, good cash flow, stable business and the upscale customer base. However, the biggest problem here is that true growth will not come until the baby boomers start needing their services, which is still many years away. Therefore, the stock could continue to sink.

Looking at the chart, there is a clear downtrend and falling price channel. The stock formed a hammer on high volume, but remains below the lower trendline and prior high. Also notice that there have been a number of high volume up days during this decline (black carets). But the downtrend is the real problem and it would take a move above key resistance at 6.5 to pique my interest in this company.

By Arthur B. Hill - Wed 13-Apr-05 at 09:06AM in Stocks
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Wednesday - April 06, 2005

Chinese Wireless

Michael Brush of MSN (click here) talks with John Buckingham of the Prudent Speculator TechValue Report. The article lists 12 stocks to buy in an inflation scare. While I really don’t see the connection between some of these and inflation, it was interesting to see Buckingham pick Nokia (NOK) and Asia Info Holdings (ASIA).

Asia Info Holdings (ASIA) is a software and networking company based in China that should benefit from the wireless build-out. The stock is currently trading around $5 and has $3.25 in cash. I would think that this cash will soon be deployed – at least it better be! On the chart, ASIA has been trading much like the Nasdaq: down Jan-Jul 2004, up Aug-Dec 2004 and down Jan-Feb 2005. The Jan-Feb decline formed a falling wedge and the stock broke above resistance with a pretty good move in March. This advance goes counter to Nasdaq weakness in March and shows good relative strength. Hmm…. The stock met resistance from the prior support break (5.4) and needs to clear this level for a serious run above 6.

By Arthur B. Hill - Wed 06-Apr-05 at 09:30AM in Stocks
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Tuesday - April 05, 2005

3M Powers the Dow

The Dow is a price weighted average of 30 stocks. As such, the stocks with the highest prices carry the most weight. The highest priced components are JNJ (69), MMM (84.45), IBM (89.6), CAT (90.41) and UTX (99.81). The lowest priced components are HPQ (21.57), INTC (23.13), SBC (24.20), MSFT (24.44) and PFE (26.95). I doubt if Dow Jones & Co would have added MSFT and INTC to the average had they known these two tech components would end up so low!

The focus today is on MMM, which is the fourth most influential component of the Dow. As a big multinational, MMM benefited from a weak Dollar over the last few years and more than doubled from Sep-01 to Jun-04. The stock continues to hold up well in 2005, but formed a rising wedge over the last six months. These are potentially bearish patterns, but should be respected as bullish while the higher lows holds. The stock recently broke below the lower trendline and further weakness below key support at 83 would turn the medium-term trend bearish. Also notice that the Accumulation Distribution Line formed a large negative divergence and this indicator points to a bearish reversal in the stock price.

By Arthur B. Hill - Tue 05-Apr-05 at 04:26PM in Stocks
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Semiconductor Support

Applied Materials (AMAT) is a key player in the semiconductor group and the broader market. The stock is part of the S&P 500, Nasdaq 100, Semiconductor HOLDRS (SMH) and Amex Semiconductor Index ($SOX). This $26 billion semiconductor equipment has relatively little debt ($500 million) and almost $4 per share in cash.

On the price chart, the stock has been range bound since July with support around 15 and resistance around 18.5. That’s a pretty tight range. As long as the stock remains range bound, the best option looks to play the swings within this range (magenta trendlines). The current swing is down and nearing support. This makes it too late for shorts and the next play would be long on a move above the upper trendline and late March high (16.80).

By Arthur B. Hill - Tue 05-Apr-05 at 02:57PM in Stocks
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Alaska Flying High

Alaska Airline Group (ALK) is an anomaly in the airline industry. While most airline stocks were grounded January and continued to drift lower, ALK held relatively strong and consolidated over the last few months. This is even more surprising when one considers the recent rise in oil prices and weakness in the Consumer Discretionary sector. Like the Consumer Discretionary sector, the airline industry is quite cyclical and vulnerable to economic fluctuations.

The pattern at work looks like a symmetrical triangle, which is typical for consolidations. The upper and lower trendlines are converging and the direction of the break will provide the next signal. A move above 30.5 would set up a challenge to the January high, while a move below 28 would target a move towards the Sep-Oct consolidation (23-24)

By Arthur B. Hill - Tue 05-Apr-05 at 02:34PM in Stocks
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Monday - April 04, 2005

As Wal-Mart Goes.....

A picture paints a thousand words. The same could be said for a chart and the recent support break in Wal-mart (WMT) bodes ill for the stock, the retail group, the Consumer Discretionary sector, the S&P 500 and the economy. While I do not expect Wal-Mart to go out of business, the message is clear. Tough times are ahead for this company. Perhaps the market is saturated with super stores, perhaps negative media is taking its toll or perhaps there are simply more (stock) sellers than buyers. Also notice that the stock has been underperforming the S&P 500 for several months and the price relative (WMT/SPX ratio) moved to a new low at least a month ahead of the stock.

By Arthur B. Hill - Mon 04-Apr-05 at 02:56PM in Stocks
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