We
have several new trading suggestions that we’d like to pass along.
DELL Computer (DELL) was added to our short
sale recommendations yesterday at 43 1/2. The stock has virtually missed
the latest tech rally, has one of the heaviest levels of insider selling
that we have seen, and a P/E Ratio of 64 as computers are becoming more
and more of a commodity type business.
Technically, it has been making lower highs and
just reversed down on its Point & Figure chart after breaking out
above two previous highs "below" 45. This immediate reversal
after what is known as a "triple top breakout" is known as a
"bull trap" and indicates a move at least below its last low,
which would bring it below 40 at a minimum. It also gave a
"relative strength" sell signal in May, according to
Chartcraft’s November P&F chart book.
Stochastics and the Rate of Change Indicators
at the bottom of the graph also show shorter term bearish divergence’s,
while RSI has been stuck in neutral. We look for a drop to 39 to confirm
the bull trap sell signal. We are using 47 � as a stop loss point,
limiting the risk to 8.60%.
We are also adding Bethlehem Steel (BS) to our
low priced portfolio, ahead of the potential rebound in many beat up,
out of favor stocks as the new year begins (January Affect). This may
have recently felt additional tax-loss related selling that may be
ending. We think the steel group has been abandoned by investors, but
recent US trade sanctions and new rules on steel imports will benefit
pricing as well as the stock prices. We also view this as a good
Technically, it has had 2 selling climaxes at 7
or lower and its most recent insider activity was on the buy side. The
stock has found strong support on each dip below 6 as it has been
building a base between 6 and 7. A close above 7 would be considered
very bullish, and the shorter term indicators seem to be confirming this
potential, as each show rising bottoms against the actual stock price.
These are bullish divergence’s.
Market
Trend Realities (MTR) is a Registered Investment Advisory
which manages personal, corporate, Trust, and retirement accounts on
a fee only basis. Several low cost, flexible management fee
arrangements are available. Investment Advisor, Mitch Harris has
studied the Point & Figure Charting Method under the direct
supervision of Michael Burke, Editor of the prestigious Investors
Intelligence research organization. Management is based on a unique
combination of technical analysis methods and tools which include,
The Point & Figure charting method, Elliott Wave Analysis &
techniques, industry group analysis, cycle analysis, Relative
Strength Analysis, Stochastics, and investor sentiment studies. MTR
offers a very uniquely structured managed mutual fund program using
the RYDEX family of mutual funds, which offer outperformance
potential whether equity markets are rising OR falling! Inquiries
are welcome by calling us at (513) 421-8737, or by email at: mtr@fuse.net
MTR also publishes a monthly investment newsletter called
"Reality
Check", which offers technical commentary on the
stock & bond markets, the Dollar Index, gold & gold stocks (XAU),
Treasury yields, utilities, investor sentiment, and Federal Reserve
policy. It also offers stock trading recommendations each month with
price targets, stop loss points and insider activity. There are 4
trading portfolios, including a short selling account (we are very
proud that our short sale recommendations have averaged 12.5%
"compounded" during the roaring bull market of the last 5
years). Short term market commentaries are updated on Tuesday and
Friday mornings, along with portfolio changes on this web page. They
are also emailed for free to anyone who provides us with their email
address. The regular subscription rate is $200 (US) per year. A
special first time subscriber rate of $139 is available to
viewers. Samples are available upon request. MTR will be happy to
send information on any of the above mentioned services. Please email
us your home or business address and specify your interest(s).
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Last modified: April 02, 2001
Published By Tulips and Bears
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