CSCO, VLO, BIDU and FB update

VLO ran up into the range I mentioned topping recently around 53.7 and dropping back down in what looks like a 5 wave.  This brings into question whether it will stay below 55, so this downside play is on hold until a proper turn in momentum is seen.

Cisco did come down to 22.5 and is looking solid. It may be entering a 3rd of a 3rd elliott wave which would mean rapid movement up to 27 and eventually 30.  There is still a low chance of a quick drop down to 22 but that would be a tremendous buying opportunity if it was rapid because that level has significant support. 

BIDU and Facebook still have some downward momentum but look to be joining in the coming rally with short term targets of 165-170 and 64-66 respectively.

I am not a professional trade at your own risk.

Cisco looking strong in face of weak overall market. VLO setting up for fall. CGI was a big winner.

Cisco has upward trends on daily and weekly charts as well as a series of bullish impulse waves since mid 2011.  While the Nasdaq has shaved off 8% in the last month, CSCO is up around 8%.  Look for pull back to $22-22.50 to buy.  Target is 28-30 over the next few months for around a 25% gain. stop at $21.

On the daily and weekly charts, momentum for VLO is sharply down.  In addition, there are significant divergences on indicators.  The chart below shows a classic and pretty impulse wave down.  I'll be watching for a retrace up to at least 52.5 and possibly up to 54 but then it should turn and go south with a first target of 48 and second of 42 ish.  If we can pick up May 55 puts for 2.50, we should be able to get a triple by selling them for 7.50 in a month or less.  I'll be watching for the turn signal on this retrace.

Updates from the last post...

- RIG broke down through 20 years of trendline support so that trade is over.  If you bought at 47-49 and got stopped out at 42 then that was about a 12% loss.

- IBM made it to 190 as I suggested but is having trouble with 195.  No recommendations now.

- CVX did not make it to 130 so we got stopped out at 120 for a 4% loss.

- Citigroup and BMY both promptly made it to 55 as predicted for 6-8% gains.

- CGI made it up to 24 for a 23% gain.

- And my big love YRCW is still looking good as a long term buy.  After my last post it dropped to my buy range of 12-15.5 and then promptly took off for 27.  Now at 20ish it is still a buy and may drop down to 17.5  for the opportunity to pick up some more.  

I am not a professional. Trade at your own risk.

Picks

Markets appear significantly overbought, but still no clear signs of slowing down so I am focused on the upside though still keeping an eye on some potential bearish plays as a hedge.

Updating from last post, CAT was not actually dead, just in a coma which it woke from and came roaring back up to the target above 90.  It is reaching resistance now and I have no recommendations regarding it.

RIG retrace made its way down to about 47 but has turned back up and should be taking off for long term bullishness as mentioned in previous posts.  It is a buy!

IBM got down to 172, just above my target of 170 and now is in a strong up trend with next resistance at 190.

CVX bounced around since the last post making it down to 118 ish but now is back up to 125 and still should hit target of low 130's. Stop at 120.  Citigroup and BMY both are showing signs of running up in an elliot wave 5 on Daily charts with targets of about 55.  Stops at 51.40 and 52.40 respectively.

CGI is Celadon Group, a trucking company trading around 19.4.  It is bouncing up from 10 month trendline support and is a buy with a target of 24.  Stop is at 18 so risk/reward is about 3 to 1, 7.5% loss vs 25% gain.

Also in trucking is our old friend YRCW.  It had a big retrace down to 7.5 and popped back up to 20. Trading around 17 now.  It is a buy from 15.50 down to 12 though one might have to endure some high volatility on this one since there is a gap way down at 8.70. Long term I think this has great potential.

Summary... CGI, RIG and YRCW long term buys.  CVX, Citigroup and BMY short term buys.
I am not a professional.  Trade at your own risk.

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...