Dec 21, 2004

Beneath the Hood

Posted by Hello

Click on the charts to see a larger image!!

Some of the individual charts in the HUI look like they are finding some footing. This chart has stochastics crossing at the bottom but I would prefer to see one more touch of the 200 day while the stochastics keep their buy signal. Might start to dabble on the long side in some of the smaller names soon.

This chart in OS (Oregon Steel) bodes well for the market. Particularly with CMC joining in the breakout today. As the market overall felt weak Friday and today I think it is a good sign that the steel stocks can resume their rally. Makes me more comfortable buying into this pullback. I am also watching FCX in here to see if copper can manage the same trick.

After not doing a whole lot and seeing little to even talk about today I was mildly surprised by going through the charts. I noticed short-term head and shoulders in AMAT and KLAC. I also noticed several stocks (RFMD, NVTL, RHAT...) I had flagged to watch for upside breaks instead broke down. Depending on what happens in other markets, this pullback could lead to a buying opportunity between Xmas and New Year.

Some other odds and ends here. F appears to be breaking out to the upside here even though GM is going through some tough news with this Fiat put. GM appears to be basing too so I am wondering if this is a case of the tape leading the market. I have not heard positive comments on any auto stock (except maybe TM) in a long time.

Lastly, the 5-yr is easily holding its uptrend while its stochastics have almost worked back to oversold. May not head higher immediately but it is hard to see that pattern heading lower from here. Like the steel sector, that seems quite bullish. Maybe just more flattening though.

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