Spike's Scientific Stock Analysis

[spikefader]

Hey Spike,
Just wanted to get your feed back on my employer's stock (LOW).
It has been trying to break past 61 since late 2003.

This may be the time, even though our forcast was lower than the street, we are however up. Some ANALysts upgrades dont hurt also. Looks like some investors are jumping from the big orange people to us.

I was thinking of shifting some funds into it, I was wondering what you think of the charts. I appreciate all that you do here on the board.

Jaws57

Hey Jaws! Thanks for the feedback.

Bullish bias for LOW short-term, bearish long-term. Needs more explanation!

Lots of things I like about it short-term TA-wise. Pink wedge break is bullish, as is gray channel turn up, and orange channel week last week, all following the red channel long, and inside a potential 12345 orange Elliott Wave move. It's looking very strong up here in the weekly, and does possess the weekly TA to justify higher prices.

But is it chasing up here at these prices? Yes. Sometimes the TA can justify a chase, but let's put it in perspective.

First, a comment on a brilliant triangle break. Look at the monthly chart I've attached, where you see that ascending triangle break up back in late '97. What a wonderful move after that - the stuff of dreams! (take the lesson from the chart. The wedge break out back then was a BIG thing, and the last 7 years paints an accurate picture of WHAT IS POSSIBLE with the right TA setup like a big fat monthly ascending triangle).

Now the question is, who is the genius? Is it the smart bulls down at $10.00 when the chart was a screaming long? Or is it the investor looking to open a potential long-term position at 60ish today? Consider that question in the light of a clear 12345 move from 1997 to 2005, with what is potentially a quarterly double top, with two rather bearish quarterly candles. Is it at quarterly resistance? Yes. Is it at weekly resistance? Yes. Do smart bulls buy at such big significant resistance? Not usually. And if they do, they are very cagey and wise with a protective stop. I know I sure would be, considering ALL things with the charts.

You can see the daily pink channel break is bearish. And rest assured there are some very smart bears waiting to short the blue channel around 60, which coincides with significant price resistance. I'll say that again. SIGNIFICANT price resistance.

That said, sure, it could break all those resistances and fly. Resistances are made to be broken, right? But just keep it in perspective. Estimate the POTENTIAL risk, size accordingly, and place a stop (if at all) according to the worst case scenario, make the trade or not, and smile while you watch the cards fall where they may Personally, I would wait until it proves it can beat the resistance first.

I'll be one of those bears in ambush and will buy some options (probably April 50 strike for 10 bucks each) and at least give the resistance the chance to reward me.

If price breaks them with significance, then it's proven itself and I'll green light a long at an appropriate support level.

Bottom line is buy at support and not resistance.

Best to ya.

[spikefader]

LOW intraday.

The ambushing bears are in the 59.80 to 60.40 zone. That is the blue upper channel on the daily. 60.40 is R2 intraday. 60.54 is the quarterly price resistance. Those are THE BEST places to be selling. They are THE WORST places to be buying. It's resistance remember. We sell at resistance!

[spikefader]

P.S. Jaws, thanks for the heads-up on a great TA example.

[spikefader]

02-15-2005, 08:39 AM... Speaking of ascending triangles, check out APL. This thing is going up. This is a special and I highly recommend it. Weekly looks very bullish. Yes, it's near daily resistance today. Buy a pullback.

Breakout and now a bullflag breakout. Movin' on up.

[spikefader]

Vector will clearly close bearish today. Will hold my Qs short

Still holding short. Vector remains bearish.

[Thomrich]

Greetings Spike,
Pardon my Naivete,I was wondering if FRO could be a candidate for a breakout from a triangle?

Im looking at a frame from beginning of feb. with it breaking above 50 on nice volume today.I need to figure out how to post links so I can give some reference to what Im seeing.

cordially Tom

[Jaws57]

If price breaks them with significance, then it's proven itself and I'll green light a long at an appropriate support level.

Bottom line is buy at support and not resistance.

Best to ya.

Thanks for the in-depth rundown on LOW. Even more thanks since I just realized I would be breaking my own investing rules with the Lowe's stock. Every year I get a good bit of profit sharing or performance match as they call it. They also have a stock purchase plan that I can buy stock at a 15% discount. My plan is to keep that fully invested in LOW and not add other money to it. This will keep me from being lopsided into just one stock. I have been there since 1997 and this plan has worked out well.

Your explanation makes sense to hold off buying if I wanted to add to the posistion.
I just hope the yearly match happens at the support!!!!

Jaws57

[spikefader]

Greetings Spike,
Pardon my Naivete,I was wondering if FRO could be a candidate for a breakout from a triangle?
cordially Tom

Yup, that's a triangle - an ascending one, and it's a bullish pattern. For anyone looking to take this long, remember that now is really not the time to do it. The right move was the pink channel long. An aggressive move was to buy the ascending triangle breakout at 49.69, or before it in anticipation. It's approaching resistance, and a chase now - not the time to be opening a position. If you want to do something, now is the time to kick yourself for not taking it at either of those two points in time

Now that said, if the red channel turns up, then that is a reason to consider chasing it.

[skiracer]

Amtd

This one formed a bullish hammer at the end of todays downtrend on hugh volume. Today's volume was over 10 million against daily average of 4 million. Ended up .10 for the day. Looking for a continuation of the reversal tomorrow if it gets above todays high of 10.61 and taking a position as a swing trade and a target of 13/14 range over the next week. What are your thoughts?

[scifos]

Spike, what does ESWW's chart say to you?

[Thomrich]

Yup, that's a triangle - an ascending one, and it's a bullish pattern. For anyone looking to take this long, remember that now is really not the time to do it. The right move was the pink channel long. An aggressive move was to buy the ascending triangle breakout at 49.69, or before it in anticipation. It's approaching resistance, and a chase now - not the time to be opening a position. If you want to do something, now is the time to kick yourself for not taking it at either of those two points in time

Now that said, if the red channel turns up, then that is a reason to consider chasing it.

Greetings,
Well at least I saw the triangle,but obviously too late.I used EENC as a template,with a measured move from the breakout over 49.69,thinking that 60 was in the cards.

One thing that is puzzling is stockcharts.com shows 57 being the high in november,yet pricing history shows that the stock went well into the 60s.Not sure if the dividends has skewed the chart data.

As of tonight,yield is at 28%,with an almost 10% dividend coming on mar 3rd alone.

Unfortunately Im in today,before your warning of chasing,so I need some luck and dividend chasers to follow.At least I can hold for the approx 5.00 div.

Thanks for your input,and info on triangles,it makes chart watching even better.Now I need to put the channels together and get the timing down.

cordially Tom

[spikefader]

This one formed a bullish hammer at the end of todays downtrend on hugh volume. Today's volume was over 10 million against daily average of 4 million. Ended up .10 for the day. Looking for a continuation of the reversal tomorrow if it gets above todays high of 10.61 and taking a position as a swing trade and a target of 13/14 range over the next week. What are your thoughts?

Hey skiracer.
Looking at a weekly chart the bias is short for me, with the black channel short open and targeting lower light blue channel.
On the daily, I can see five waves down, with potential 5th completion today, so maybe some correction due. But look for abc correction and shorts looking for the c entry.
I like others long, but good luck with it though!

[spikefader]

Spike, what does ESWW's chart say to you?

Approaching weekly resistance, but the daily is whispering higher prices. The question is whether there will be enough gas in the tank for a tradeable sustained move once it breaks that triple top resistance. Let it establish the break, and buy the return to a channel, but that may take several months.

[spikefader]

...used EENC as a template,with a measured move from the breakout over 49.69,thinking that 60 was in the cards...

Well the bias is clearly bullish and 60 and up is a very strong possibility. Looking at previous runs, it has the ability to have a strong run from here to 60. I just prefer sneakier entries Good luck with it.

[scifos]

Approaching weekly resistance, but the daily is whispering higher prices. The question is whether there will be enough gas in the tank for a tradeable sustained move once it breaks that triple top resistance. Let it establish the break, and buy the return to a channel, but that may take several months.

Saw that bullflag too. Had a bullish englfing today as well. Its on my Pop or Drop list. Will watch closely. Thanks Spike.