RealMoney Charts: JBLU, IR, STLD, QCOM, LNN & HOLX (March 11, 2008)
Here are the charts for Tuesday’s RealMoney articles: JBLU, IR, STLD, QCOM, LNN and HOLX.
JetBlue is coming in for a hard landing right at the January low. If the stock closes below $4.50, I’d ditch this dog and move on. And if you are intent on buying an airline stock because it looks cheap, let me suggest an alternative trade for your consideration. Go to your nearest Home Depot (HD) or Lowe’s (LOW) and get long one very large claw hammer. Then, place your finger on a block of wood and strike it with the hammer as hard as possible. Repeat this process until you no longer have any fingers left to push the “buy” button.
IR peaked last July, but really sustained the most damage from December into the latter part of January. The subsequent rally appears to have stalled at around $43. If the 50-day moving average doesn’t contain this pullback (and it sure doesn’t look like it will), then I’d sell IR and put the money to work elsewhere.
This weekly chart of STLD shows just a very few pullbacks that were deep enough to offer solid buying opportunities that have never been seen again. With the stock looking a bit toppy now, I’d wait for the next deep pullback–which won’t occur overnight–and buy then.
This weekly chart shows QCOM in a 25% trading range. Currently, the stock is smack dab in the middle of that range, so it’s a “nothing done” in my book. I’d wait for the next pullback to $36 before I’d consider buying.
LNN is back to test the 50-day moving average, which has generally held the bears at bay for the past several months. But even if that key moving average doesn’t serve as support, I’d look for buying at the rising trendline I’ve drawn that connects the lows over the last 6 months.
Notice how $50 seems to be a magnet for either tops or bottoms in this weekly chart of HOLX? Back in 2006, the stock repeatedly peaked at $50. In 2007, we saw $50 as a haven for aggressive buyers. So what about 2008? We’re about to find out. And if the bulls can’t halt this downtrend at $50, I’d be selling in a hurry.
Be careful out there.