Real Money Charts (April 3, 2008)
Today charts in my RealMoney column are: GOOG, BIDU, AGU, SMH, and HOLX.
Google just doesn’t seem to be getting any love these days from the analysts, but it sure looks like it’s ready to move higher to me. I’d be looking for a move back above $475 to signal a trend reversal. I’d also be buying any dips.
BIDU has been churning around within a wide range for the past few months and looks ready to spring from the base. The problem is that the stock has run 40% since the March low. That makes it ripe for profit-taking on any further strength. If you’re long, there’s no sense in selling. But I’d sure want to keep a tight stop to protect profits.
This weekly chart of AGU shows a stock that’s stuck at $75. While the trend is decisively up, the last two peaks are both around the same level. At the same time, the heavy volume is typical of a top, where the stock is under heavy distribution. While AGU is at a technical buy point, I think it presents a lot of risk. I’d be a seller on any strength.
SMH has been trading in a fairly tight range for the past couple of months. With the 50-day moving average close to turning upward, there is a pretty good probability of an upside breakout. But I’d wait for a close at around $30.50 before getting comfortable buying the breakout.
HOLX has been trending lower since January, but that downtrend appears to be reversing now. But notice the long Volume-by-Price bars on the left side of the chart, between $31 and $33. The longer the bars, the more trading volume has occurred. And the more trading volume, the more financial and emotional commitment at that level. So what does that add up to? Some pretty formidable resistance between $31 and $33. So while a move above prior support would be a buy signal, this isn’t a stock that I’d be interested in owning now — it’s just too high-maintenance.
Be careful out there.