Media Focus -- FMCN

Action:

FMCN has been trending downwards in a channel from early novs. The stochs are close to oversold at the moment. The small uptrend from early apr to may was also broken recently, which has led to sharp fall in the stock

Guess:

The oversold stochs indicate possible buying in the near future. Given the uptick today was close to 5%, but the volume was very light, it is possible that the stock consolidates into a bearish flag sideways or slightly upwards for a few days. The pattern formed would be like a head n shoulder pattern (shown in green) which is very bearish. In the intermediate term, this stock looks to be headed lower.

For this guess to be wrong, FMCN needs to break the region around 42 decisively, signalling the end of a downtrend, until then this is CROX'ed.

CALM

As a counter to Ag play, this is a livestock-egg play. When wheat gets costly, what about meat?
The yoy trendline is strong. Right now, this stock is in correction mode. The stochs and RSI indicate this stock will undergo further correction. We shall wait for it in the 29 region.

There has been controversy regarding this stock in the past, concerning bird flu and high short interest etc. We shall play by the charts. We still are optimistic about this one. Plus, this is a high dividend yielding stock. So, we lie in wait nevertheless

Agplay -- CF

Action:
CF has a strong yoy trendline channel, as shown in the blue lines. It is now very close to the lower trendline (@121) . Betting with the tape on stocks like this, and also because we believe the DJI/SPX are oversold in the short term now.



Guess:

We wish CF corrects more towards 121. The stochs are already in oversold territory. RSI still has some ways to go. But strong stocks like CF don't stay very long down in the dumps. We will start adding to CF around 125

Russian Metal - MTL

Action:

Recently, MTL has had a steeper bottom line than the upper line, forming an ascending wedge. This is bearish and is mostly resolved to the downside. MTL is at the cusp of this resolution. The long term trendline (in black) is very strong and parallel to its 200d, which is a very bullish sign. Hence our interest in this load and forget stock. Ideally, we would like to get it in the 43 region. But strong stocks like MTL, don't stay very long at such places. So under 46-47 should be a nice place to start accumulating MTL.


Guess:

Long term, the chart is very strong. We believe this chart is going to correct somemore, towards the black trendline, looking at the stochastics. As soon as it crosses the 1/2 way point from the highs to the black trendline, we are looking to add a small position. It is advisable to keep adding as its reaches the black line. Looking to pickup SMN in the recent market here. That should serve in good stead if MTL behaves badly.

Basic Materials

Action:
The trend in commodities is up in the long term. This trend has also accelerated in the last 2 months, along with the market (the green channel). IYM/UYM are near the top end of their channels. The stochs show overbought and turning around. RSI is at the precipice of a fall. SMN the counterpart has been heavily beaten down. It could happen that these fall with the overall market. (?)

This is a nice area to scale into SMN, if you own Ag stocks.

Guess:

We are betting on about a 10% correction on IYM/UYM. Thus the play on SMN, we will tighten stops on SMN around 30-31, once it gets there. We hope that the green channel is broken and IYM retraces into the lower reaches of the black channel. This would also provide a nice entry point into Ag names such as POT, MON, CF and others like CALM, VCP, MTL etc.

STV

http://www.istockanalyst.com/article/viewarticle+articleid_1909728~zoneid_Home.html

Action:
STV ran up in the first week of may, when it broke its 8 month downward trendline (in black) and a smaller 2 month downward trendline (in blue). It was trending upwards since along the green upsloping line. However, last week it broke the uptrend. That means, STV is currently in a no-man's land. The RSI and stochs are bearish. Selling volume has been higher than buying volume too of late. It has not been able to break its upward resistance at 18.25 too. There is good support in the 15-17 region, with lots of trendlines etc, which could be for great daytrading, by playing both sides.

A buying point would be it if its breaks 18.25 on volume or touches its low around 15.1, with a stop below that.

Guess:
The path of least resistance now is down. We will wait for some indication or movement to jump into it.

For the gamers: GA

Action:

GA is in a major support area. The tops from Dec, Jan & Feb and the 2 month trendline support. However, RSI and Stochastics present a somewhat discouraging picture.

Guess:

Too close to call for me. I would say, consolidate to somewhere in the 13 region. It will move sideways for some time now, until the stars are aligned properly.

The VMW chart

Action:
VMW recently broke its month long uptrend on may 7th and is now fighting against resistance area at 72. Tomorrow (may 16th) will be the decider. If indeed VMW breaks 72, 76 is a possibility.

The way to play this would be to buy it in the 72.5 region and put the stop under 72. Sure, this trade is just 5%, but it will show that the tech sector may have more legs.

Guess:
VMW fails to break the resistance. Lets see

The MER chart

Setup:
I use the MER chart as an indicator for SKF trades. Yes, I know MER is not one of the top 10% of the holdings. But this strategy has done well for me. So, I will continue to use it. I had predicted a MER trade from 43-52 and the SKF bounce from 90-100 in late april using this. Currently, May 15th, we are on right on the blue trendline which is about 2 months old. Overhead resistance looms ahead in the 52-53 region. It is about time, probably another week or so, when we know which way the financials swing.

Action:
Wait for MER to get squeezed out of this triangle, I am guessing a week's time. For now, we wait.

Guess:
My guess is a break down. Go SKF??