January, 31st 2006
Nightly Update - January/Sudden-Profit-Short-Term-Traders - $MID, SMH, BAP, JLL Charts
On this update I would like to review the short term sudden profit trades that I discussed on the weekend short term trades update on Jan 14th. Please be aware that I do not add these short term trades to the portfolio. This is because I give very specific instructions on how to trade these and they are only meant to be held for 2 weeks at the most. Consequently,there is no need to add them to the portfolio. This does not mean that I am ignoring these stocks. Before I get into the technical analysis for BAP& JLL, I want to discuss the general market. Today was Fed day, and normally I don't do market updates on Fed day. Today, many indexes made new 52 week highs and this is bullish. Some of the indexes that made new highs are: $MID, $SML, $SPX, the $CRX, $INDU, $TRAN and of course the $CRX which is cranking.
S&P 400 Mid-Cap Index - ($MID) - Daily Chart- Cup and Handle
The daily chart of the $SPX illustrates that it has broken out of a bullish cup and handle. However, it is not a true cup and handle based on the technical definition. As you can see by looking a the chart, the $SPX had a triple top breakout of the cup and handle this week. This breakout has occurred on heavy volume that has been coming into the index the entire month of January. 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 and moving up with price. On a side note, the $SML and $MID have the same bullish pattern.
MERRILL LYNCH SEMICONDUCTOR HOLDRS ETF (SMH)- Daily Chart- Rectangle Pattern - Optionable
Like the NASDAQ, the SMH has been consolidating in a lateral corrective move for the past 2 months. The SMH has been range bound and trading in a lateral rectangle pattern. The SMH is not out of the woods yet, but once it breaks out of the rectangle it is definitely going higher. Even though the pattern scan says the SMH is bearish, I happen to disagree, it just does not seem to fit. Rectangle patterns are bullish continuation patterns, so a breakdown is unlikely. In addition, you can see, that the SMH has been holding it's long term uptrend quite nicely through out the month of January and pullbacks have been on light volume. Perhaps this is an initial sign of the SMH becoming stronger. For now we have to wait to see how the SMH unfolds going forward. The indicators and oscillators remain in a 123 bearish trend reversal. Apart from the Aroon indicator, the RSI, WM%, PPO and Stochastics appear to have bottomed and are curving upwards. Furthermore, bullish divergence is showing up in the PPO. It may be that Bullish sentiment alone, moves the SMH higher despite the current negative internals within the NASDAQ. The market can go higher on thin air and defy all logic and fundamentals, and until the top is in, we cannot short the $COMPQ or the SMH. Should the SMH breakout, the chip stocks, like INTC, will benefit.
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. Please review the original update below, and the before and after charts. This stock has been added to the portfolio table as a swing trade.
Jones Lang Lasalle Inc. - (JLL) - Daily Chart is in an Ascending Continuation Triangle Pattern- Property Management - Not Optionable
The daily chart of JLL illustrates that it has broken out of a bullish Ascending Continuation Triangle Pattern. As I said in the original update, it was very close to breaking out of the triangle. JLL met all the defining criteria necessary for the pattern to succeed. Once it broke out above the upper trend line at $95.00 with by strong volume, it will took off. I stated that best entry for JLL would be on a clean breakout at $95.00. You will notice that the price consolidated above the triangle and held it's 13 EMA on increasing volume throughout the month of January. Look at when all the indicators and oscillators became bullish. They all occurred at the same time in early January. JLL finally surged on double the normal volume to reach new 52 week highs today at $105.37. I want you to recall that patterns measure distance/ rice target. If that is the case, then what is the price target? (Hint = subtract the 2 numbers that you see on the chart add that total to 95). Whatever you do don't be GREEDY. Take profits at the target.
Altiris Inc. - (ATRS) - Daily Chart is in an Ascending Continuation Triangle Pattern- Application Software - Optionable
The daily chart of ATRS illustrates that it has broken out of a bullish Ascending Continuation Triangle Pattern. As I said in the original update, ATRS met all the pattern criteria necessary for the pattern to succeed. It had broken out of the triangle. Once it broke out above the upper trend line at $26.24 it consolidated there. Then, ATRS gapped up on massive huge volume, due to news of a buy out, to trade in the $32's where it also placed new 52 week highs. WHEN A STOCK GAPS UP AT OR ABOVE TARGET TAKE YOUR PROFITS. SELL. Please review the update from January 15th.
Edited by Daisy
Andrea Victoria Friend aka Daisy
Editorial Assistant for Trending123.com
daisy@trending123.com
