Crystal Balling
Excellent day on Friday, here are the end of day statistics. All sectors rocking out on nice volume.
Friday statistics
Lots of things on my radar for next week in terms of setups, the majority of which are bullish. Mostly based on the daily and 15min charts, so check the one I don’t include for another perspective if any of the tickers catch your eye:
| ITUB | MOS | CAKE | ERTS | MEE | CAG |
| DIS | OI | CSX | RTN | KMB |
MOS:
Short term ascending triangle with overhead resistance in the $55.50 region. Full moving average support, however Friday formed an indecisive candlestick with the stock down 0.02% on the highest dollar volume of the week. I will be watching this for a breakout or retracement after breakout and don’t intend to short.
DIS:
Since the March recovery, Disney has performed well with two nice continuation patterns. At the close on Friday, Disney is on the verge of a breakout from the third consolidation range in what is a very similar setup to what happened in April.
Disney range
Quadruple bottom support with triple top resistance ($25 and $28). Nice range trading here, however the volume has been strong the past few days and I anticipate a breakout. Full MA support
CAKE:
Looking for continued strength in CAKE this week which has the early signs of a breakout. Psychological resistance area of $20 is an area to watch this week, pullback to $18.50 would be a a good RRR trade.
Cheesecake up 6%
ERTS:
Bad earnings in sector shoving EA down. Classic bear flag formation at the moment with a small bounce on tiny buying pressure. Similarly to CAKE, ERTS has tested the $20 level as resistance (prior support) and looking frim.
EA games; challenged by everything
No real support until $17.50. Another nice RRR trade if you get short above $19.75.
MEE:
Looking for a breakout from a nice resting period following a nice rally on the daily chart. On the half hour chart there are a few key levels worth watching. $30.50 (res), $27 (sup), $29.50 (short term sup) and also the two way support line (dashed blue).
MEE looking to rock or drop
My only concern that volume has been fairly light on the most recent rally. For what it’s worth, the divergence at the top at $30.50 is positive, however MEE did not break to new highs with the market on Friday and might show weakness on an average day for the broader market as materials stocks are now beginning to show percentage performance parity with the S&P 500 (check relative strength chart).
CAG:
Check the 15min chart on CAG and you’ll see a nice breakout from the $19.8 level with a close above $20 on increasing dollar volume levels. I would normally like the long setup here, but by close on Friday, CAG had more or less closed the gap from a year ago. On top of that the daily chart is forming an ascending wedge. Should the market begin to show any weakness at the start of next week, CAG could be a good short candidate. This one could go either way, and as such is a nice stock to be watching.
OI:
A close above $35 could see some movement in OI to the $37.50 region. Divergence is positive. Check the next chart of CSX for the same type of setup.
CSX:
Another consolidation range breakout potential chart. Volume not overly impressive lately. Support at $42.50 and a close above the $45 region means there could be another few dollars here. No major overhead until $50.
Let's talk about csx
RTN:
RTN is one of those stocks that shows little emotion at support and resistance levels. The wicking is minimal (like at DIS at the moment), and the levels hold or reject very well. A nice volume breakout on RTN occured on Friday which caught my attention. Yes, these consolidation breakout plays are the flavour of the week it seems, but RTN is the nicest for me.
Clinical
$48 if you can get it (or under $48.25) would be a spectacular entry for a RRR trade with technical price targets at $50 (which is also psych overhead) and $52. I really like the probability on this setup.
KMB:
There are only so many charts of consolidation breakouts you can publish in one post!
Relative sector strength over the past 20 days:
Mighty financials
Economic calendar for next week from Briefing.com:
Sup next week
Should be some good trading next week, here’s something for the weekend:
| ITUB | RTN | OI |
| DIS | MEE | ERTS |
| CAKE | KMB | CSX |
| MOS | CAG |
yeah, it’s me from StockPursuit.com
Buffett started out doing a lot of things. He would do those arbitrage plays and other small returns on margin. He also bought a lot of cigar butts net current asset stocks (net-nets). Berkshire Hathaway was actually a net-net textile company when he bought it before turning it into his holding company it is today.
That’s because he studied under Graham which you already may know. Later he became more like Fisher who bought management and growing innovative companies. Fisher wrote “Common Stocks and Uncommon Profits”. Buffett also being with Munger swayed him to the quality at a good price vs the poor quality like Berkshire was orginally at a great price. The net-net’s where lower quality business at great price and Fisher and Munger changed him to great quality at great to good price.
I used to look at more of those special situations before i got into trading. There is an SEC page or an Edgar page that has all the new filings. Forgot that link and the forms right now. I’d just as rather make 10-20% in a few days now vs waiting for these things to pan out over months and months. If and when i have a much larger account and capital to play long term I’lll def get into more of these spec situation plays though.
thanks for the comment on my blog
Mark
August 24, 2009 at 8:11 am
I read some of Common Stocks and Uncommon PRofits few years back and didn’t get much from it though. It’s a lot of basic stuff I picked up just learning fundamentals. Its stuff like buy a company with good management. It wasn’t the holy grail i was hoping for.
Intelligent Investor by Ben Graham is the best book on value investing or any investing i have ever read. It’s like the roots of Buffett’s strategy still as far as thinking of businesses and how to be contrarian.
Mark
August 24, 2009 at 8:22 am