Wednesday, March 5, 2008

Charts to Watch

Not a whole lot in my scans tonight. On the long side, I am seeing some consolidation and pullbacks in the commodity sector, but I am still hesitant to jump on these because although they may continue to run here, I think there is just as good a chance of these stocks continuing to pullback more to where entries would be much more attractive. If you are interested, the stocks I am watching in particular are COG, ATLS, CHK, and SGY in the oil sector and DROOY, PAL, and maybe PAAS in the metal sector. If they continue to rest in there current areas, they will set up some nice buy points. I think commodities still have room to go over the longer term as the long as the Fed is set on throwing more and more money at our economic problems, but getting good, lower-risk entries is the key because I am sure the sector will be volatile as more momentum-type money comes into these stocks.

On the short side, I don't see any super setups right now other than FWLT, which seems to be just waiting to break down further after a less that satisfactory earnings report last week. I am watching some retails for breakdowns, such as COH, CPKI, and PLCE. MON is looking weak and if the agriculture stocks breakdown as a group, I think this will be the first to fall. I am also looking at GHM and FUL for breakdowns. These are all dependent upon the market action, however, so these are only stocks I am watching. FWLT is the only one I may start a position in over the next few days. It is still likely to be tough for the rest of this week for both bulls and bears, so be careful. Good luck.

Charts from Telechart2007, Courtesy of Worden Brothers, Inc.

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bmbull said...


Just curious - what is IBD's current 'stance' on the market? Are they still on 'confirmed rally', or have they backed off to 'rally under pressure' or something else?


Mac said...

Basically like have been like me (or more accurately, I have been like them) - they saw some hope about a week ago, but since we stopped at the 50 day moving average on the indexes, they have gone back to having the rally under pressure. From a practical standpoint, this follow-through is a bust. If we move lower tomorrow, I would assume they will officially call it dead.

bmbull said...

Thanks. I was just wondering. I understand their 'follow-through day' rules, but I don't think their criteria for reversing their positions are nearly as clear-cut.

I would agree on the follow-through being pretty much gone. After the last 4 or 5 days, seems like you're really starting from scratch again.

But, they're the experts. Not me.