Real Money Charts (April 29, 2008)
Tuesday’s charts on Real Money are: YHOO, ITRI, BEAV, GA, VIP and GU.
Now that Microsoft has gone away (at least, for a while), YHOO is left to its own devices. And from the looks of things, it’s not doing too well. I’d look at a break below prior support of $26 as a sell signal. Would I short this dog with fleas? Nope — because it’s a stray that might get picked up from the pound at any time. But would I ever buy it? Hey, there are more than 7,000 publicly traded companies to pick from. Are there really no other more viable ways to make money out there? Move on.
ITRI broke above established resistance at $100 earlier this month. While we could see a pullback all the way to $100, the stock is setting up for a move back above $105. I’d be a buyer on a breakoutbut I’d also consider buying on a pullback to $100where I’d then put a stop just below $95.
I last looked at BEAV a couple of weeks ago (http://www.thestreet.com/p/_rms/rmoney/technicalanalysis/10411673.html) noting that the upside potential for the stock was right around $42.50 — where the stock had last hit resistance. Well, yesterday BEAV announced great earnings! The stock gapped higher on the openalmost to $42.50, before trading lower for the rest of the day. BE Aerospace might be the greatest company in the western hemispherebut its stock is still under pressure at $42.50. Until that changes, I wouldn’t own it.
The bulls have been pushing against $13 for the past few months, but each time, the stock sold off. However, yesterday’s breakout was on heavy volume and really establishes $13 as support now. I’d be a buyer on any kind of weakness, and I’d keep a stop just below prior resistance. After all, if this breakout is the real thing, there should be ample buying interest to prevent the stock from falling below $13 again.
I’ve placed numbers by the three typical phases of an uptrend. First, the stock formed a base during the first half of 2006. Then, for the next year the stock ran at about a 45 degree angle. Finally, the third phase was a nearly vertical move from $25 up to $45. Now, you can see the stock working off that move. Current buying pressure is around $30, but if those buyers dry up, it could be a long fall to $20. If you’re long, consider putting a tight stop on this, because any further decline will have the shorts all over it.
$12 seems to be the magical price level for GU. Back in January and February, each rally had failed at $12. But after the March rally up to $15, this same level has morphed into support. And after yesterday’s little bounce off Friday’s close, I’d use $12 as the reference for my capital protection stop — right around $11.50 or so.
Be careful out there.