Technical Analysis of Financial Markets

Sunday, March 30, 2008

Johnson & Johnson (JNJ)

Johnson & Johnson engages in the research & development, manufacture and sale of healthcare products worldwide. Price action is currently forming a seemingly bull flag pattern which should see a price target of approx $68 towards prior 52-week highs. A price target is derived by projecting the height of the Flag Pole formation from the base of the Bull Flag formation. Stop-loss and failure of the formation upon breakdown of current OBV support.

Saturday, March 29, 2008

Merck & Co. Inc. (MRK)

Manufacturer of pharmaceuticals, Merck, has completed the corrective part of an Elliot wave cycle which saw stock price decline 52% in a 3-month period with wave 5 marking a 52-week low. Coinciding with the 50-day moving average, impulse wave A has found resistance at the 23.6% Fibonacci extension level; a sell signal indicated by a crossover of overbought stochastics may see the beginning of a corrective wave B before price action resumes an uptrend as part of wave C. Earnings announcement expected 21 April 2008.

Wednesday, March 26, 2008

General Motors Corp. (GM)

Founded in 1908, based in Detroit, Michigan with 266,000 full-time employees; automotive manufacturer General Motors has seemgly formed Double-Bottom pattern over a 21-month period. Long position towards the 50-day moving average for an 18% gain; stop-loss on close below $18.

Altria Group Inc. (MO)

Founded in 1919, based in New York; Altria primarily enages in the manufacture and distribution of cigarettes and tobacco worldwide. During the 5 months ending 2008, stock price rallied 25% where price action is currently consolidating into a downtrend. An entrance into a short position with a stop on breakout of the RSI downtrend may serve as a low-risk trade. Tobacco producer Philip Morris is being spun off by Altria and is joining the S&P 100 index.

International Business Machines Corp. (IBM)

Update on previous IBM analysis:

Monday, March 10, 2008

S&P500 38.2% Fibonacci

The S&P500 weekly is approaching the 38.2% Fibonacci retracement level of the entire 2003-2008 bull market. Typically, this area may serve as support and commencement of a trend-reversal towards the 23.6% Fibonacci retracement level or the underside of the broken trendline.

Saturday, March 01, 2008

International Business Machines Corp. (IBM)

Between July 2006 and October 2007, IBM's stock price gained 66% in value; a sell-off during November 2007 saw price action break the trendline of the rally. Since then, price action has remained beneath the underside of the broken trendline where support has become resistance. An entry into a short position with a stop-loss on close above previous highs at $117.50 may serve as a low-risk trade.