Stock Picks

PIR Pier One Looks Ripe for a Breakout Soon

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pir20090723

PIR or Pier One the specialty retailer looks like it is ripe for a breakout soon.

I am initiating a buy stop on PIR at 2.30 for tomorrow with a protective stop at 2.09

I like how PIR has held tight in this sideways range since early May and not given back too much ground especially considering how far and how fast it has come since the March lows.

It looks like constructive cause building to me.  There were two blow out spikes that occurred about a month ago, but in each case both of them failed to hold above resistance.  I believe those spikes are referred to as upthrusts. In each case they were on quite heavy volume.  So you saw new longs come in on those spikes and shorts unfortunately got blown out.  All of this is part of the cause building process. So now it seems patience is in order and lets see if PIR can get a breakout going here.

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FITB and CEMJQ

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Both Fifth Third Bancorp FITB and Chemtura CEMJQ have initiated buy signals as of the early morning today and based on my previous post.  Both stocks were trading in congestion ranges similar to what was occurring in the SP500 and other broad market indices.

Today they have spoken and are now part of the BestOnlineTrades Recommended List.

FITB had a really clean and clear looking uptrend since the advance began in early March.  Up until now it has been stuck in a long somewhat sideways trading range and consolidation.  But what was clear was that it was not intending to give back that much ground.  So today we see a breakout from the resistance line.

CEMJQ has basically the same story as FITB.  I think FITB had a cleaner looking uptrend but the structure of both was more or less similar.

So for now I believe the trend is your friend with these too.

I think it is always interesting to do a side by side analysis of the broad market indices and then try to see part of the broad market action in the individual stocks.  I have always found that this helped me to gauge trends either up or down.  The broad market indices are indeed the ‘mother ships’ and the vast majority of stocks tend to follow them.  Of course there are plenty of exceptions at all times, but for the most part this is what I find to be true.

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There is a Blockbuster Trade Developing in the Gold Market

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gold20090722

There is in my opinion a blockbuster trade developing in the gold market right now.  It is one of those slow motion type developments that usually catches people off guard.

This has the potential to be a very big trade in my opinion.

The chart to the left is a simple representation of what I am talking about. I will go into more detail on this in future posts.  You can click on the chart to the left to see it full size. The trade developing is a combination of a symmetrical triangle pattern in the gold price in addition to very bullish seasonals coming in September 2009.  The red shaded area represents the very bullish seasonal time frame for the gold price.  The green shaded area represents break out territory of the gold price from this several month congestion area also represented as a somewhat large symmetrical triangle pattern.

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Fifth Third Bancorp FITB and Chemtura CEMJQ on the Watchlist

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fitbcemjq

I am initiating FITB and CEMJQ on the BestOnlineTrades recommended list with buy stops.  That means that they are not fully recommended yet but are positioning themselves possibly for some good upward movement.

FITB is a mid cap bank that has a fairly clean chart and has been price trending upwards for quite some time now.  It has that run away rally during early May but since that time (about 2 months) it has consolidated in a slow downward slanting wedge of sorts.

Now it finds itself kissing the up trendline as of today and so far holding ground.

So I am initiating a buy stop at 7.60 for FITB on the premise that once it is able to get above down trend resistance we could start to see a new up trend.

CEMJQ or Chemtura is the Chemicals company with large international exposure that could see benefits from a collapsing dollar price.  That one has also had a nice run along and uptrend line and done a more violent pullback back to up trendline support.  I am initiating a buy stop on CEMJQ at .2750

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