Technical Analysis of Financial Markets

Friday, December 29, 2006

Helmerich & Payne Inc. (HP)

Oil/gas drilling and exploration company Helmerich & Payne has currently found support at the 50% Fibonacci retracement level of a 3-month uptrend which saw price action rally 30%. With oversold stochastics crossing over and RSI turning bullish; a price target around $26.50 towards the underside of the broken trendline should see a quick ~6% gain -where a short position can be initiated. Stop-loss: close below $24.44

Anaren Microwave, Inc. (ANEN)

Manufacturer of wireless communication components Anaren has broken an 18-month trendline which saw stock price rally some 170% in that period. The broken trendline may signal a trend-reversal. However, price action held support at the 50% Fibonacci retracement level and is currently testing the underside of the trendline. Stop-loss for a long position: close below $17.15; stop-loss for a short position: close above $18.50.

Thursday, December 28, 2006

Diodes Inc. (DIOD)

Integrated circuits and semiconductor manufacturer Diodes is beginning to look weak after a breakdown of the 2-year uptrend support. Initial price target for a short-sell position is the 38.2% Fibonacci retracement level.

Saturday, December 16, 2006

3Com Corp. (COMS)

3Com has broken support of an 18-month uptrend but has found support at the 61.8% Fibonacci retracement level at $4.01. Immediate resistance at $4.25 beneath the underside of the broken trendline. Stop-loss close below $4. Q2 fiscal year 2007 results scheduled to be released on December 20:

Thursday, December 14, 2006

Blockbuster, Inc. (BBI)

BlockBuster seems to have consolidated a 4½ year downtrend into a Double Bottom formation. Price target for a Double Bottom formation can be measured by taking the height of the Double Bottom 'W' pattern and projecting it upwards; - a price target of around $6.75, or a gain of around 27%. The stock has been up some 16% already since CEO John Antioco spent $1 million in a share buy-back a month ago:

Monday, December 11, 2006

AT&T, Inc. (T)

After 6-month rally gaining 44%, AT&T seems like it has run into a double-top formation on declining volume; -stochastics are signalling overbought conditions and are poised to cross lower. Enter short-sell for a possible pullback towards initial support at the 14.6% and 23.6% Fibonacci retracements at $33.43 and $32.45. Buy on break and close above $35 with price target towards Fibonacci extension at $37.96.

Friday, December 08, 2006

Citigroup Inc. (C)

Citigroup surged almost 4% on heavy volume before closing at a gain of 2.3% on speculation that CFO Sallie Krawcheck is departing the bank. The spike in price action saw a breakout of a 2-month consolidation range with resistance at $50.95, which should now serve as support. OBV has yet to confirm the breakout; -perhaps indicating a possible pullback in price before smart money begins buying into management reorganisation news rather than speculation. Fibonacci extensions from the mid-July uptrend project price targets and resistance at $52.48, $54.44 and $60.08.

International Business Machines (IBM) – Negative Divergence

Shares in IBM have rallied 30% in a period of just over 4 months. However, recent gains in price action have been occurring on weakening RSI and declining MACD implying a bearish negative divergence. Overbought stochastics have crossed signalling a sell condition. Initial price target at 14.6% Fibonacci retracement of the rally. Further strong support at the 23.6% Fibonacci retracement level coinciding with the rally trendline support and a previous gap support at ~$89.41.

Thursday, December 07, 2006

HealthExtras, Inc. (HLEX)

Health care insurance broker and pharmacy services provider HealthExtras has broken out of a 3-month downtrend which saw stock price decline 55% in that period. Currently the breakout is trading between the 14.6% and 23.6% Fibonacci extension levels. Stop-loss close below $21.

Boston Scientific Corp. (BSX)

Cardiovascular, endosurgery and neuromodulation medical devices developer Boston Scientific has seen stock price decline some 216% in a steady downtrend over the past 3 years. However, price action today has just managed to close marginally above the trendline breaking out of the downtrend. Perhaps a more plausible signal of a trend-reversal will be a test of the 14.6% Fibonacci extension level. Stents, which are tube-like, metal-mesh structures are placed into the arteries of heart attack survivors and high-risk patients causing expansion for blood flow. Variants include drug-coated blood-thinning stents which prevent clotting. However, the FDA is probing the drug-coated version of these stents as they may ironically be causing the reversal effect of creating blood clots leading to heart attacks. Deutsche Bank has a Buy rating, downplaying any significance: