Archive for the ‘Chart of the Day’ Category

TNX (10 Year Treasury) Weekly Chart

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Might be taking a run at 1300 (resistance).  A eventual close above 1300 would be encouraging to the bulls.

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Merck Stabilizing


Merck had a brutal second half of October.  Ahead of a disappointing third quarter earnings report the stock was already on its heels.  The post earnings flush, which began with a huge downside gap on October 27th, sparked a massive breakdown.  One day later MRK had extended the collapse from the September high to nearly 20%.  Since then shares have been stabilizing and are now setting up as a low risk buy.

Earlier this week MRK retested the October lows as downside pressure has eased.  As this area comes into play the stock has returned to a deeply oversold(daily MACD)level.  We believe shares are now setting up for a healthy rebound and are a low risk buy near current levels.  In the near term MRK should be considered a buy near the $55.00 to $54.00 area.  On the downside, a close back below the $53.00 area would indicate a more prolonged basing process is ahead.  

We remain long MRK in some managed accounts.



Johnson & Johnson Continues To Fade


JNJ has been steadily fading for the last four weeks.  The stock was able to extend its powerful   earnings inspired breakout before running out of steam near $144.00.  Since the October 24th peak shares have been in pullback mode.  As this week comes to a close the stock is at new November lows and has retraced nearly all of the post earnings rally.  This soft action will develop into a very low risk entry opportunity for patient investors.

We regard the $37.00 t0 $135.00 area as a major support.  This $2.00 zone includes the stock’s summer highs near the upper band and the September high near the lower band.  Also in this area is the 50 day moving average.  As this area comes into play, which will likely happen next week, JNJ will have erased the entire October 17th earnings inspired breakout.  We believe this A rated stock will attract attention once again here.  On the downside, a close back below $134.00 will indicate more rangebound trade is ahead before a return to rally mode.

At time of publication we are long JNJ in some managed accounts.




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FedEx Falling


FedEx has left behind an ominous top.  The stock has been struggling since late October and is now in danger of a deep sell off.  FDX closed at new November lows today with the help of a 2.5% loss, its biggest drop since August.  This breakdown type action drove shares below a solid support zone that included the summer highs.  FDX has now left behind a massive supply zone.  All the post earnings buyers, who reacted quite favorably to a strong third quarter report, are underwater.  

We expect FDX to continue lower in the near term as overhead pressure intensifies.  Eventually this extended pullback will provide patient investors with a very low risk entry opportunity.  If the stock can begin to stabilize near major support a significant low could develop.  We are focusing on the $205.00 to $202.00 area.  This important zone includes the stock’s 200 day moving average near the upper band and the October low marks the lower band.  Also near the lower band is the stock’s 2016 peak set back in December at $201.60.  On the downside, a close below $200.00 would indicate a more prolonged basing period is ahead before FDX can return to rally mode.

We are long FDX is some managed accounts. 


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