Wednesday, February 16, 2005

A Few Monthly Charts

This post has nothing to do with fundamental analysis, but sometimes I like to peruse through the Dow 30 charts every now and then to get a taste of where some of the big boys are going. Below you will find some of the Dow Jones Industrial Average (DJIA) components with some commentary. I think you will see the efficacy of looking at the monthly view of these big boys for long-term supply and demand trends.


Click to Enlarge Posted by Hello

AIG - This insurer seems to have bumped up against resistance in the forming of a symmetrical triangle. Wait for a breakout in either direction before investing one way or another. There was a lot of volume on the last touch of the uptrending line. That shows quite a bit of support around the $60/share area.


Click to Enlarge Posted by Hello

CAT had quite a breakout in the middle of 2003. It has gone from around $55/share to the low $90's, which isn't half bad. Those invested might want to tighten up their stops here and begin looking for a way out.


Click to Enlarge Posted by Hello

GE has had quite an uptrend since the beginning of 2003 from $20/share to the upper $30's. Still looking good.


Click to Enlarge Posted by Hello

GM - The car manufacturers have been going through a rough time lately. They all look pretty cheap, but there are reasons for that. Could the car industry turn around? I don't know, but that $31/share area is looking pretty tempting. It wouldn't be the first time technical analysis has called a bottom before the fundamentals caught up. We shall see.


Click to Enlarge Posted by Hello

IBM has found resistance at the $99.16 area twice now. Will it break above?


Click to Enlarge Posted by Hello

MO definitely broke out at the end of 2004...how much further is the question? As always, look for consolidation before jumping in.


Click to Enlarge Posted by Hello

MRK - Nobody should have even been in this stock when the bad news about Vioxx came out. Merck has been in a downtrend ever since 2001. Never invest long during a downtrend...you are just asking for trouble.


Click to Enlarge Posted by Hello

PFE - Same thing with Pfizer as Merck. Nobody should have even been invested since Pfizer has been in a downtrend since late 2000. Did we find a bottom at $22/share on the last day of December 2004? I don't really care. I'm not paying to find out. The reward to risk ratio just isn't there.


Click to Enlarge Posted by Hello

INTC seems to be consolidating during an extended bottoming process. I am an advocate of buying 1/2 positions before breakouts. If I were a betting man, I would say that Intel would break out to the top side of this consolidation. You never know...until you know.


Click to Enlarge Posted by Hello

Verizon (NYSE: VZ) seems to have broken out of the downtrend that began at the end of 1999. VZ has now come back to re-test at the apex of the triangle. Higher prices in store? A better picture overall for the telecommunications industry?

These are just a few short thoughts on a few of the components of the DJIA. Use them as you wish.

Best Regards,

The Soothsayer of Omaha

0 Comments:

Post a Comment

Links to this post:

Create a Link

<< Home