Technical Analysis of Financial Markets

Sunday, September 23, 2007

Starbucks Corp. (SBUX)

Over the past 11-month period, Starbucks coffee has declined 60% in stock price. Current price action is consolidating into a seemingly bullish Ascending Triangle formation which indicates accumulation with $28 acting as resistance. As the pattern develops volume contracts; followed by an expansion in volume as breakout occurs. Volume precedes price, and so, trade in the direction of OBV breakout which represents a cumulative total of buy and sell volume. As the northern hemisphere enters the colder autumn/winter months, the consumption of hot coffees may increase; -picture the city commuters with their scarves and coffees…

Sunday, September 16, 2007

Agnico-Eagle Mines (AEM)

Driven by gold reaching a 16-month high, Canadian gold miner, Agnico-Eagle, has hit an all-time high of $50.35. For over the last 16-month period, Agnico-Eagle has been trading in an ascending range fluctuating approx $12 between highs and lows. Any profit-taking in commodities may impact Agnico-Eagle; likewise, an anticipated interest rate cut by the Fed on Tue 18th may also impact commodities. Analysts at UBS have downgraded Agnico-Eagle from a "buy" rating to "neutral", however, a target price has been raised from $50 to $53 (see

DivX, Inc. (DIVX)

DivX develops multimedia & graphics software and services designed for media applications. DivX principally offers video compression-decompression (codec) software libraries for creation and playback of video software applications. After hitting an all-time high of $31.89 about 9 months ago, stock price has more than halved in value; depreciating around 127%. Current price action has broken above $14 which has served as both support and resistance over the last 3 months; in that period, RSI remained bounded below a reading of 50. The breakout has also coincided with a break above the 50-day moving average. Entrance into a long position with a stop-loss on close below $14 may serve as low-risk trade.