The CAT is dead.

CAT did not quite make it up to 90, so this was a case where it moved in the right direction but didn't quite make it to the target. It is now actually a sell since it is breaking down below some significant long term support. I'll watch it over the next week to confirm that it is now in a downtrend.

RIG had a nice pop up to 55 ish but is now retracing to the 52-53 range. It may go as low as 50, and it is still a buy for the long term. Stop remains at 44.

Expect CVX to hit the low 130's over the next 6-8 weeks. Current price is around 124.

IBM may be entering a third wave down, heading to around 170. It was down 1.5 % on Friday while other Dow stocks were climbing. This could be a big options play. Try for some Dec 180 puts which will be quite attractive if the stock does a retrace up to 183 this week. 

RIG does a jig.

RIG had a big pop today occurring in concert with the S&P 500 announcement that it will be replacing Dell in that index. The trade is on.  Long term target is 200.

CAT has been on a steady rise since the last post.  I would like to point out that technical analysis can predict social/economic news as I did in my last post.  The markets are more likely to push a news story to the front page than the other way around.  But the ultimate truth is that they occur in concert.  Everything is connected.  There is no coincidence, only synchronicity.

C is for CAT

The overall markets are still in an uptrend despite the government shutdown and debt ceiling debacle.  Chart patterns suggest another month or two of gains.  These gains will be synchronized with positive movements on the political scene.  Expect some kind of deal to be made in Washington this week. Along with this positivity CAT should gain about 12%.  The risk with the appropriate stop  is 3.5%.  See below.

There are many major stocks which have been in a consolidation pattern since May/June.  American Express is one of them and CAT is another.  AXP has likely made an Elliott 4th Wave and CAT probably has made a Elliott B wave.  Expectations after these kinds of consolidations are a strong thrust out of the pattern.  Click on the chart for better viz of a few details.  Buy Range, Stop and Target are listed.  An impulse wave that started on 10/9 is complete from 82.45 to 85.85.  Now look for a retrace into the 83.50 to 85 range over the next day or two. Additional technical factors that support this move up include (1) bounce from 50 month moving average at 81.56, (2) Daily MACD histogram just turned above 0, (3) One hour moving averages with solid up-slope.

No upturn for RIG yet.

Please click on the chart to see details...

Old and new

First a recap and apology.  On my last post from 2/19/13 I recommended YRCW at around 6.50.  We actually got stopped out at 5.9.  Sorry that I didn't repost but the action turned up and I jumped in around 7 again.  It went to 36 though I sold out much of it in the 15-20 range.  Anyway, general instincts were right though exact numbers were off regarding the stop.  Sorry.  I'm done with this trade but still watching Yellow as there is still great potential.

WMB dropped a bit but not the 15-20% I was looking for.

OWW, I recommended at around $3.30. It went as high as 13 but is now around 9.8.  Long term I think it is good but it may have more retrace down to 6-7 range.

Now for a new one.  RIG is bouncing off of a 19 year trendline and has had pretty regular 9 year bottom cycles.  It also has a pretty nice Elliott wave pattern that is a near duplicate of its retrace from 2002 to 2003.  For those appreciating the technicals, it is a flat correction since the low at the end of 2011.  Long term conservative players should wait until it has a weekly close above 58.  The stop is below that big trendline with the blue arrows, around 44.  Target is around 200 over the next 5 years.  Some January 2015 call options with strike price are about $4.00.  I suspect they'll be worth at least $30 by the end of next year.

For those still reading, could you please send me an email to let me know that you received this.  My blogger dashboard is screwy and I'm not sure who is on the list anymore.  also, if you are joining me on this trade, please let me know as it will prompt me to do more updates.

click on the chart below to see it's full extent which is beyond the small frame seen.

p.s. I am not a professional.  trade at your own risk.

WMT, YRCW, WMB, OWW

Well, we got stopped out of WMT around 69.50 (accounting for opening gap) for only a small percentage gain. WMT is now off the table. 

YRCW is behaving well. Still a chance of a drop to 6.45 which is a buy point. 5.90 stop still in effect.

Technicals strongly suggest WMB is going for a 15-20% dive over the next few months. Short term is a little uncertain as some parameters suggest a short term top at 36.6, but more likely a drop with tomorrows earnings report. It closed today at 35.45 but lost all of it and some in after hours trading. The P/E is 33 and industry average is 10. It has had 4 straight quarters of declining revenues. 

OWW is looking strong. It recently had a good earnings report despite a very large one time charge. It is up over 20% in the last week. This is one I believe could be tripling over the next couple of years.

Adjust WMT stop and buy YRCW

New Stop for WMT is $69.90.


Now keeping an eye on YRCW.  This shipping company has been a dog of the industry but recently reported positive annual operating income for the first time in six years.  On the technical side, it has a clear elliott five wave impulse up and a 61.8% retracement.  This is a buy with a stop at $5.9.  Initial target is around $9.00 but it could go much higher.

Adjust WMT stop.

New Stop for WMT is $68.25

Wal Mart is a Go

WMT closed above 68.80 today so the trade is on.  Although the Elliott pattern did not go exactly as I expected, it stayed within the needed parameters so that we can expect WMT to have another up leg over the next couple of months.  Target is 72-74.  Place a stop at 67.45.  

Walmart has a nice 1-2,1-2,1-2 elliottwave set up including an impulse wave with THREE 61.8% retracements.  In addition, it is at 50 week MA support and 18 month weekly trendline support (2nd chart).  Target is 74 in 2-3 months.  A close above 68.80 indicates it is a go.