Real Money Charts (April 17, 2008)
Here are today’s charts for Real Money : SU, EMC, GOOG, CLB, BUCY, and NOV.
SU has been oscillating in a very wide channel for many months, but the past couple of days look good. The stock broke above prior resistance on very strong volume, and I’d look for higher prices. I’d also protect my position with a stop down below $110.
I’ve recently covered EMC, but continue to get lots of questions about it. Nothing much has changed except that $14 continues to establish itself as having enough demand to support any pullbacks. Unfortunately, $15 holds enough supply to cap any rallies. Still, the longer the churn, the hotter the burn. If the bulls do manage to push the stock above the 50-day moving average on heavy volume, that’ll probably attract a lot of buyers back to the stock. That’s when I’d buy.
I’ve covered Google quite a bit over the past several weeks. Maybe I’m being simplistic, but I like it because nobody else seems to. The stock is trending higher since the March low, despite all the bad news and pessimistic outlooks. Still, earnings are tricky and I’d say that today’s announcement will be the most critical that Google has had in a while. If the market doesn’t like what it hears, I’d look for a re-test of the March low. But if the reaction is positive, I’d look for a 10% move in the other direction — to test the February support level. When you hold a volatile stock like this over earnings, you are placing a bet. You’re gambling. But if you just leave a few chips on the table, this might be worth waiting for the next card.
This weekly chart of CLB shows a stock that really peaked in late 2007 and has been struggling ever since. When you see these big corrections below the center of the trading range (here, the 20-week moving average), they usually indicate fatal distribution that ends the uptrend. But that hasn’t been the case here. The stock has climbed back above $130 and looks to be challenging the old high. Still, I’d keep a stop just below the breakout level.
BUCY had been consolidating in a pretty wide range for the past couple of months, but the current rally really started on the dramatic bounce off the 50-day moving average back in March. Since then, the stock has been working its way higher. Over the past two days the volume has exploded. But after such a big run, the safer trade is to wait for a pullback.
The downtrend in NOV is now a thing of the past. Notice how the 50-day moving average is moving higher again, and is just now being crossed by the 20-day moving average. When the stock is higher than the 20-day moving average, which is higher than the 50-day moving average — and all are moving higher — that’s about all you can ask for. This type of breakout from a bull flag tends to run for a while. As long as you respect the trade with a stop, I don’t think it’s too late to buy now.
Be careful out there.
Real Money