Thursday, August 19, 2010

Computer Stocks

Yesterday I highlighted three stocks from the financial sector.  Continuing with the sector theme, here are three stocks from the computer sector.  This time, let's look at the Weekly Trend Models:

DELL Weekly Trend Model

IBM Weekly Trend Model

HPQ Weekly Trend Model

The obvious question that arises is, "It can't be that easy, can it?"    

Past performance is not a guarantee of future results.  

Plus, the past three years have seen some rather large trends, which is exactly the kind of market that this technique is designed to navigate.  

Finally, note that all three of these stocks are in Weekly SELL modes. 

Market Notes

Today's sharp decline out of the gate was enough to turn all Intermediate Trend Models SHORT. Below is a Daily chart of the DJIA with a potential wave count.  Next key level is 9600.


Anonymous said...

Why sell IBM, seriously? The company is in great financial shape. If you want to make a case via chart, it's hard to, seeing as the stock has nearly doubled in the past two years.

Shorting a low P/E stock with rising earnings is a way to get killed in the market. On top of that, it's got a 2% dividend, which sets a certain floor on any downward drop. Low reward, high risk.

Plus, it hasn't gone down since the chart issued the magical "short" signal in December. It can't be that easy to prove you wrong - can it?

Full disclosure: I don't own any IBM, and didn't even in the past...

A said...

Let's re-visit IBM's price in a month.

Note that IBM can't go up much before the system reverses LONG, so your thesis about, "getting killed" is erroneous on its face. A Weekly close above 132 reverses the SHORT to a LONG, that's a risk of about 3%, hardly, "getting killed," by any stretch.

Dave said...

I thought you and the others might be interested in this one.

Allan, you just may be the only one who gets it. Well, except for those of us who know your work.

abot said...

I see VXX was about $129 in march 09.
VIX about 55 at the same time.

Now both in the 20's.

Is there one with better correlation to trade?

Just today, vix is up almost twice as much as VXX.

Anonymous said...

Allan, do you seriously short stocks to make 3% profits?

I don't. Always seemed like a waste of time to me. I think the previous poster is right - if it hasn't gone down in 8 months, it shouldn't go down after another month.

Dave said...

Worthy of a look?