Friday, February 29, 2008

SNE - Sony Corp.


Sony Corp. (SNE), traded in somewhat of a range on the DAILY chart before popping higher to the 55-57 level in December. after failing to eclipse that level, the stock decline precipitously below previous support to 43. Has enjoyed a recent jump which I associate with the fact that Blue Ray has defeated Toshiba's HD/DVD format. That being said, it 's unclear whether the recent rally will be more than a counter-trend retracement to the dashed mid-line of the previous decline.


Tuesday, February 12, 2008

$PLAT - Platinum Futures


On January 26th, I posted about $PLAT, the Platinum Futures... In particular, the WEEKLY chart showed a clear cup and handle consolidation pattern that had broken out to the upside violently. It turns out there was a strike in the South African mines. However, in the past couple of weeks we have seen a massive jump in the price here. The RED horizontal line represents the old highs and the DARK BLUE CIRCLE captures the recent jump...As far as shorting it, I wouldn't get in the way, just keep an eye on it...

Monday, February 11, 2008

MSFT - Microsoft


MSFT, is down horribly from it's relatively large pop in early November when they blew out the quarter...They are trading back down at the low end of the range on the DAILY chart as indicated by the Green Support Line...Judging solely by the distance below the SINGER EMA Band, MSFT looks like it should be due for a near term rebound to the area around the dashed mid-line/ Blue Trend-line which is now Support turned Resistance. It's unclear however, how the proposed bid for Yahoo! will turn out, and the effect that will have on the share price...


MSFT, fell off badly since completing a big run from the low $20's to the upper $30's level... Retraced back to the Dashed Mid-Line which looks like a Resistance turned Support level. Big increase in Volume here as price crashed through Blue Trend-line Support, so It looks as if we could get a near term bounce back here...


MSFT ran up huge into the Tech Bubble Crash and spent the better part of the next years moving sideways continuously finding Support around the $17.50 level. The SINGER EMA Band began tilting upward as price recovered above the band and moved swiftly to the high $30's recently. However, given the market turmoil as of 2008 and the proposed bid for Yahoo!, we have seen a disappointing pull back to the high $20's. The price is still supported by an upward moving EMA band but we need a move back up soon to save this one long term...

Sunday, February 10, 2008

HSY - The Hershey Company


HSY, has been entrenched in a slow and steady down turn on the DAILY chart... The share price is exhibiting two main characteristics here: (1) There have been a number of attempt to put in a bottom, but to this date, all have failed; (2) The price has been capped by the SINGER EMA Band, which represents a significant amount of overhead supply coming into the market as sellers have taken control...One more try at a bottom here...


HSY is trying to find some Support at these levels after a large decline. It looked like HSY was setting up for a symmetrical triangle continuation pattern and could really move higher except the overall market tanked and margins shrank at the venerable chocolate maker on higher input prices for COCOA and SUGAR. Broke under Dashed mid-line Support and has been trapped under the SINGER EMA Band in it's recent serious down turn as illustrated by Blue Trend-line Resistance...


HSY was up massively on the MONTHLY chart from around $10 to around $65 over a 10+ year period starting in 1995.. Price took a needed rest and began consolidating those gains and looked like it might continue the uptrend. However, a decline began taking the stock down to the Resistance turned Support line formed by the 1998 highs... Significantly below a narrow downward tilting SINGER EMA Band which I think might produce a near term counter trend rally but the long term prospects are questionable...


HSY:$SPX - really illustrates the highly oversold nature of HSY as well as it's current underperformance... Near term Bounce???

Thursday, February 07, 2008

GOOG - Google with MSFT - YHOO - $NDX

That's right ladies and gentlemen, as pointed out to me by the "popular financial blog icon" BARRY RITHOLTZ, CEO and Director of Equity Research for FUSION IQ and humble scribe of THE BIG PICTURE blog: Over the past twelve (12) months once high flyer GOOG, traditional sideways trader MSFT, woefully underperforming until recently YHOO, and Large Cap Tech Index $NDX, are all trading basically even...

Three Thoughts:

(1) BUY and HOLD is dead a.k.a it’s often a flawed strategy and it appears that this is one of those moments in time where that’s true. Basically, we’ve been “range bound” ever since the 2000 highs. If you look at the super long tem charts, there is no guarantee, and it appears unlikely that you’ll have the types of run ups in equity prices that you did over the past fifty (50) years, or more specifically from the early 1980’s to the Tech Meltdown. Not to mention, even if you do get massive “nominal run-ups because of the heavy money creation etc., your still behind the eight ball in real terms / purchasing power terms… Therefore, TRADE!!! In some environments if you refuse to go SHORT your profits will never be LONG…Also use options strategies to get returns where BUY and HOLD are not working.

(2) Indexing is now officially caught on with Index Funds/ ETFs. The question becomes why buy individual stocks if often times sectors and groups trade in unison. Relating back to the BUY and HOLD issue, people sometimes equate the purchasing of Index Funds or ETFs with a strategy that’s akin to BUY and HOLD. What intrigues me is the strategy that uses these tools as simplified vehicles to use for *market timing* type trading strategies.

(3) MEAN REVERSION is REAL…Although often times you get blown out because “markets stay irrational longer than you can stay liquid”…Which is why if you see a good opportunity on the horizon, get in small at first and then when the reversion clearly gets underway add more heavily to the thesis, or, use some sort of options strategy to stay market neutral until things turn your way and the MEAN REVERSION begins.

*Of course, there is the philosophical debate as to whether you can “time the market”; I simply refer to the fact that it has been and is done all the time as proof that it is possible…Even fundamental value investing has aspects of timing a.k.a picking the right time to BUY something and then eventually SELL it for a profit. Technical analysis/trading has a MACRO perspective as well which relates to several fundamental factors...