Many of our students have been asking if I would post a copy of our charts so they can see the lines we've drawn just to make sure their lines are "lining up". But after some thought I figure why limit all these lines just to the class? So I'm posting them on the blog for all to see - even adding some analysis for you! These screen shots were all taken Sunday night, April 26. The lines however have been in place for quite a while of course. To enlarge a picture just click on it.
Let's get things started with the Dow:
Of course the Dow has been in a pretty nice little rally over the last two months and most recently we've been trapped in a bit of a rectangle pattern. Very soon we should see a break one way or the other. However don't get too excited about the bull rally. While we may see a bullish break up to the 8300 area this rally is still quite weak. Expect a pull back for sure in the near term. Either a brief rest pulling back to 7500 before rallying on up to 9000, or just a flat out roll over all the way down to the 6600 range.
And now let's move on to SLB:
SLB has been in a solid trading range for the last 6 months. However finally on Friday we saw a break out of the trading range. A better than expected earnings report fueled the surge but after a full day of trading the stock managed to throw a Doji candlestick - showing great indecision. If we see a move to the upside that takes out Friday's highs a nice size bullish move is likely. Otherwise expect to see some time testing the freshly busted resistance line to see if it will hold as support.
SHLD:
We havn't looked at SHLD as much in class recently as some other stocks but it's in a very interesting spot for sure. Over the last month SHLD has moved nicely up to a solid resistance line just north of $60. However you can see the long term resistance line also coming in to play and providing some extra resistance. While this recent trend should be sustainable in the long run in the short while the stock is a bit overbought and will probably trade sideways or slightly down for a few days. We may even see a testing of the $50 support line before a new wave of bullish power comes running in.
RIMM:
RIMM has become a favorite of many of our students. It could be because of the subtle suggestion to try a option strangle over earnings which profited several students quite well. One of them showed up to class three days later with a cool $14,000 profit in her account - oops...
So what's next for this money making wonder? While the recent moves have certianly been nice they have also been a bit fast. Our resistance around $69 has proven to be a slow down but we'll have to wait a bit to see how much resistance it holds. Indicators are certainly showing a need for a brief rest, but otherwise this stock could move much higher. The next big target is the bottom of the large gap back in September around $77. We're about to see the rest of the moving average crosses complete as the 10 day is approaching the 200 day. Give it a day or two and we may well see a direction defined.
PBR:
Ahh - who doesn't want a little Brazilian Beer... or oil I mean. This has been a fun stock to trade since the bull rally starting around $15 since it's bottom back in November has been a very nice move. A young student of technical analysis would likely expect this stock to continue moving higher in what looks like a well defined stable trend. However all traders should be aware that we have a serious case of
bearish divergence shaping up. When we see divergence on MACD it's usually worth taking note. However it's pretty rare to see divergence occur at the same time on all three of our indicators that can show divergence. But Stochastics, RSI and MACD are all three showing warnings. An upcoming bearish move is likely imminant.
MA:
Mastercard has spent the last month trying to break out of it's multi-month pattern. A small pull back may have just set the angle for a new bull move. And the bullish engulfing candlestick pattern on the 21st indicates a bullish move. The only thing really holding it back is some potential resistance around $176.
GOOG:
The mob boss of internet search engines has certainly taken its share of beatings over the last year. Most recently GOOG has been attempting a bullish move to return to the glory days of $700/share stock. If we can see a break of this $394 resistance this week may see that next big move. With the next big resistance showing up at $460 there's plenty of money on the table to be made with this trade. With falling volume the current price behavior closely resembles a continuation pattern so watch for a break out with good volume. If it happens this week ride that bull!
BIDU:
The Chinese Google, or so they say... Certainly a fun trade. The recent bullish move has been a great move for those who are long but running into some new resistance around $225 may be a problem. If we see a solid push through continue bullish, otherwise this stock may need to rest a few days.
AAPL:
A good Apple trade a day keeps the cash flowing your way... or so we hope. The current patterns settting up on aapl could prove very profitable depending on how they play out. If we can take out the highs a couple days ago at 127 this stock has no reason not to run on up to the long term resistance which should intersect around 135-137. That's a pretty easy $8-10 move on the table.
AZO:
And last but not least our wonder stock of the great recession. Apparently the auto industry may be dying but repairing older cars is a booming business. While it's been a great move not all things can rise forever. We could be seeing a double top form which would lead many to take on bearish positions. However the good news is this stock has traded sideways long enough to pretty much reset itself. So a move either way is certainly feasable. The best news is that move should bring an easy $15-20 profit. The current bollinger band squeeze is a perfect set up for a volatility trade. These are the things great profits are made of my friends...
And there's the charts along with some basic analysis. Don't forget Tuesday starts a whole new Foundations of stocks and options class and we still have
a few scholarships available. Sign up now to secure your seat and learn how to do your own analysis of these trades.
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