Some thoughts on stocks - Sun, 13 Jun 2004

There is a set up for clh and a June low, effective stop loss placement at 125, or 139 if you wanted it a bit closer if it doesn't work out.

Same could be said for ghg on June lows also. Also on wal. T'is the season to watch for this pattern. Tax loss selling.

May lows should prove effective stops for many stocks, eg jet. jbm This does not mean they will continue up, but if you buy, you know what to do if the May low does not hold.

snn, one of those stocks where the ex div date will determine for you the date of the high, see the announcement. I try to learn about markets by seeing what happens to the chart on days like this, which you know about in advance from the announcement.

mia, funny how those mid points play such a part in valuations, and announcements so often push a stock into those mathematical points. mia historically oscillated between extreme high and low to create a mid point price where another coy seeks to take it over. Note the crossing of tops - good patterns to watch out for, one way of finding them is to watch the rolling year records, 52 week new highs list. hcn just made a similar break, observe on the wkly and mthly chart how past lows became a top. These two are now in hindsight of course, and the purpose of these emails is to see such moves before they occur, (tho' you can only learn it in hindsight),
therefor one could watch *bca* now for any move to 52 week new highs, signaling a likely move to its mid point of past extremes, roughly a dollar move should it happen. (If you are trading it, patience required in my view, wait for the break, and we use a stop loss in case the break does not follow through, under the previous weekly low, (a double bottom at present), which can happen on occasions, though in my experience, these chart shapes are mostly good ones).

Put hcn on the watch list for possible new 52 highs also.

Could be looking at a triangle on ncp, they often bring news at the breakout, reliable pattern to buy on a break.

anx is now up at 39 cents for the fourth time - on its monthly chart you will see that this price is the mid point of past extremes, so there is another opportunity. In a perfect world it would be nice to see the stock retrace slightly, then bust thru. Biotech stocks are spec stocks though, and I try to trade these a little differently to those with more stable earnings. By that i mean, bio tech stocks usually top out on announcements with a spike, stocks with earnings do too, however those stocks with earnings will exhibit a more reliable trend, with their announcements part of that trend. I hope I have explained that okay for you to keep in mind.

apn fourth time at tops. Advertising type companies are breaking like this (fjx, pbl, rup, sbc, wan) - reliable sign that the business cycle has some years to play out yet, and that we are only in the beginnings of the current decade cycle. Other economic forecasters do not understand how to read the market like this, and will be wrong in calling the economy down for a few years yet.

other trending stocks to watch,
amp, ann, bil,
bsa, (bit on the thin side)
emi > 16 cents
lkp (again too thin, but see what develops)
srv - again on the thin side, however some stocks should be watched to help guage the business cycle position. srv provides serviced offices i believe, so any further move across tops would help you confirm the strength of the business cycle upturn. Demand for serviced offices giving srv profitability has to indicate improved business earnings, and hence impossible for the business cycle to turn down just yet. (And you should have learnt form the business cycles class, that the earnings improvements will ultimately end up with landlords charging higher rents, which means higher land price, which means ultimately a peak to the property cycle.) See how the chart develops, which will move upwards should increased earnings develop naturally. Other market forecasters neglect this style of reading the tea leaves. It is a very effective way of guaging the next 12 months business activity. Markets are very successful in discounting the future this far ahead at least anyway.

sto, watch the past monthly tops. Some years of accumulation there possibly.

inp, though this sort of sideways move, then a break, say above 87, I have found less reliable, so with some reservations I include it

bbb > 31 might be of interest

and with stocks like dgh still breaking new highs, it is far too early to call a property led downturn is it not ?

observe how 27/5 date seemed to affect oil and oil stocks (ppp, roc, hdr into early June buying) - watch the obl/saudi/oil connection for the years into 2007 8 and 9 - more coming to you later on that one.


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