| Technical Analysis $CRX $SML $UTIL QQQQ ARNA BAP INTC |
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| Wednesday, February 7, 2007 |
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Morgan Stanley Commodity Related Equity Index stocks ($CRX) - Weekly Chart - Ascending Triangle Pattern
The Weekly Chart illustrates that the $CRX has spent a year consolidating in an ABC move down to the uptrend line in a wave 3 to wave 4 pullback off the highs to form an ascending triangle pattern. It is now on the verge of a breakout of the triangle. In addition, you can see that after the latest lows were placed at 516.38, the moving averages had a triple moving average crossover and the averages have been trading in a bullish fan ever since then. The indicators and oscillators are also in a 123 bullish trend reversal, and are showing bullish divergence. Upon breakout the $CRX will be in a bullish 5th wave up move. Looks good!
S&P 600 Small Cap Index ($SML) - Daily Chart - Cup and Handle Breakout
The daily chart of the $SML, illustrates that it has broken out of a bullish cup and handle. As you can see by looking a the daily chart, the $SML has broken out of the cup and handle pattern. This breakout has occurred on heavy volume that has been coming into the index since the beginning of the year. Furthermore, you can see that the moving averages are trading in a bullish fan, and all the indicators and oscillators are in a 1-2-3 bullish trend, showing bullish divergence, and moving up with price. The index is a little frothy at these levels short term, and could dip to the moving averages before moving back up. On a side note, the $SPX and $MID have the same bullish Cup and Handle breakout pattern. Looks Bullish longer term.
Dow Jones Utility Average Index ($UTIL)- Weekly Chart - Ascending Triangle Breakout
The Weekly Chart illustrates that the $UTIL index spent a year consolidating in an ABC move down to the uptrend line in a wave 3 to wave 4 correction to form an ascending triangle pattern. It broke out of the triangle in October of '06 on strong volume and this volume has remained robust ever since then. In addition, you can see that after the lows were placed at 380.97, the moving averages had a triple moving average crossover and the averages have been trading in a bullish fan ever since then. The indicators and oscillators are also in a 123 bullish trend reversal, and are showing bullish divergence. The $UTIL is now in a bullish 5th wave up move. Target is in the 490 area.
NASDAQ 100 Shares (QQQQ) - Daily chart- Bullish Continuation Rectangle Pattern or Possible Head and Shoulders Top
The QQQQ's have been range bound in the rectangle since November. This tight range is very frustrating and psychologically draining just because it won't move. Direction would be nice! In addition, the Q's may be forming a possible Head and shoulders top. However, it is holding the uptrend line, so until it takes out $43.00 the trend is still up. The indicators and oscillators are weakening ever so slightly and showing some bearish divergence. However direction remains unclear at this time. Price movement either direction will bring clarity.
Arena Pharmaceuticals - (ARNA) - Daily Chart- Descending Triangle Breakout
The daily chart illustrates that ARNA has completed an ABC double bottom pullback off of the highs in a wave 3 to wave 4 corrective move down. ARNA broke out of the bullish descending triangle in early January and has been consolidating in a sideways move to test the breakout. This lateral consolidation has lead to choppy trading and created whipsaw in the Aroon indicator. However, what refuses to breakdown does eventually breakout, and you can see upward price potential by the bullish divergence that is developing in the RSI, PPO and stochastics. In addition you can see that the price move today created a nice bullish candle and the EMA's are starting to converge. As price starts to trade above the 13 EMA the moving averages will have a bullish triple cross. ARNA closed up 3.63% at $13.43 today. The bullish big picture has not changed for ARNA. Therefore, the risk reward for this stock is favorable for new entries. You can buy here.
Credicorp Ltd. (BAP) - Daily Charts in a Megaphone Bottom Classic Pattern/ Reverse Symmetrical Triangle(RST )- Banking Sector - Not Optionable.
The daily chart of BAP illustrates that it has been trading in a broadening type of bottom pattern/ RST. This is a very difficult type of pattern to play. This is because the stock is making higher highs and lower lows in a bullish pattern that is difficult to grasp. This is just the nature of the RST pattern. If you know in advance that this is how the pattern works. Then there is nothing to be afraid of. The most significant aspect of this chart is the bullish divergence that is presenting itself in the price, the PPO and RSI. On the original update I gave specific instructions to buy the backtest of the broken down trend line at the $41.00 area. As you can see on today's chart, the back test to the down trend line was completed yesterday. Today the stock surged up on higher than average volume and placed a new 52 week highs at $47.19. This is bullish because there is no resistance above. It may even be forming a cup and handle pattern. It is BAPalicious!
Intel Corp. (INTC) - Weekly Chart - Symmetrical Triangle- Optionable
The weekly chart of INTC illustrates that it is in a bullish symmetrical triangle pattern. The moving averages are converging which is bullish. Volume has been coming into the stock steadily since it placed it's lows at $16.57. Furthermore, the Aroon is in a bullish cross, and the WM% is in a bullish trend. The PPO is showing bullish divergence and it is now curving upwards. The stochastics are pointing down, but the overall chart looks bullish. You can buy INTC at this level.
I just want to reiterate that these are my favorite stocks in alphabetical order: ANDE, ARNA, BAP, CRS, DIOD, EOG, GSS, INTC, JOYG, & OMG.
I am reiterating a buy alert on the following stocks: ARNA and INTC.
Edited by:
Daisy - Editorial Assistant for Trending123.com
daisy@trending123.com
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