| Chart Patterns $NIKK PPH $UTIL |
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| Wednesday, April 18, 2007 |
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Morning Update
The Tokyo Nikkei Average (NIKK)
I am updating the NIKK because I believe the backtest to the downtrend line on the Monthly chart is over. All indicators are bullish. The PPO is strong and the stochastics are bull flagging. If you want to play the NIKK, I would recommend that you look at the Japan i shares ETF.
Japan i shares ETF (EWJ)
The EWJ is the ETF that tracks the NIKK. If you want to play off the NIKK pullback I would buy the EWJ. Entry is triggered at $13.00 or close to it. The price target is around $16.00. I will not be adding it to the portfolio table.
The Dow Jones Utility Average (UTIL)
The weekly UTIL chart is bullish. The UTIL index is currently in a sideways correction whilst holding its uptrend line as it forms an ascending triangle pattern. It is just finishing its wave 3 to 4 correction. Since the UTIL index is just starting to move there are not that many picks yet. Look to the stock pattern scan for some idea flow in this sector. If the utility indexes start moving up then all indexes will be aligned to move higher much to the pleasure of Dow theorists.
The Pharmaceutical Holders ETF (PPH)
On the weekly chart, the PPH has broken its downtrend line. This week the PPH is backtesting the downtrend line. The PPH continues to be in a bearish trend reversal on the Aroon indicator. Nevertheless, I think the PPH is going to turn bullish. The PPO is starting to turn up as are stochastics on the weekly. I have added the PPH to the portfolio table. Keep your position small. I would start looking towards this sector because there may some rotation going on as investors become more risk adverse and defensive. I would look at Pfizer (PFE) and some large cap pharma's. Keep an eye on this sector because eventually there will be rotation out of commodities and into utilities and pharmas.
Stock Chart Patterns of the $NIKK, PPH and $UTIL
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