Real Money Charts for Monday, March 24th
Here are today RealMoney charts: JDSU, AUY, GE, FCL, EPD and DBA.
JDSU had been getting crushed until early February when the stock gapped above the 50-day moving average. Since then, this key moving average has been serving as support on any pullbacks. I think it’s too late to buy JDSU right now — it’s just too far above established support. But if the bulls can manage to push it above resistance, I’d consider buying some, with a stop back in the congestion area.
This weekly chart of AUY shows a stock that continues to move higher…albeit in a volatile environment. Last week’s haircut brought the bulls back down to earth…and down to test the last breakout level. If the stock closes below $15, I’d be a seller.
GE had been bumping up against the 50-day moving average for the past few months, but last week’s fireworks provided the magic needed to break the downtrend. Now, I’d be a buyer on pullbacks.
FCL has been in a pretty wide trading range over the past few months. I’ve drawn a tentative support line connecting the November low with the January and March lows. But if FCL falls below Thursday’s intraday low, then this support line just doesn’t mean anything. After all, it takes at least three points to create a valid trendline. Fewer than that just gives you the shortest distance between two points.
EPD had been finding buyers at $29.50 until last week. Even in January when that support level broke down, the stock had corrected itself by the end of the day. But last week, $29.50 didn’t have the same magic. Instead, the stock fell through that level and never looked back. But in light of Thursday’s dramatic recovery and close near the top of the wide ranging day, I’d be looking for a move higher…to around $29.50. If the bulls push it that high, watch for selling pressure by those folks who just want their money back.
DBA has been a crowd favorite for many months. But the stock really peaked in February and went on to form a double top in mid-March. Now the uptrend has been decisively broken as the bears have pushed the stock well below the 50-day moving average. While DBA might ultimately turn out to be a great buy one day, I don’t think today is that day! I’d wait for evidence of persistent buying before trying to catch this falling knife.
Be careful out there.