Tech Talk from Pring
10/01/2004 12:00 am EST
For sophisticated, technically-oriented investors, few services are as detailed as InterMarket Review from Martin Pring, featuring some 40 pages of charts, analysis, and commentary on stocks, bonds, and commodities. Here’s some of his latest.
"Even though we are cautious on commodities, we continue to recommend a 10% allocation to the Pimco Commodity Real Return Strategy Fund (PCRAX) because the Inflation Barometer is still bullish and the Dow Jones AIG Commodity Index (on which the fund is benchmarked) remains above its 200-day moving average. However, in view of the weakening technical position of the commodity markets, we would liquidate the position if it experiences a daily close below 140, since this would complete an intermediate top, thereby tipping the balance of long-term technical evidence to the bearish side.
"We remain bullish on Japan. The Nikkei has managed to bounce off the neckline of a major reverse head and shoulders pattern. At the moment, the long-term trend is positive and we think there is a good chance that the short- and intermediate-term trends will soon trigger buy signals thereby enabling the Index to move significantly higher form current levels. We continue to recommend 10% allocation to Japanese equities, where the chosen vehicle is the Japanese iShare (EWJ AMEX), as long as it remains above $9.00 on a Friday close basis. A close this low would complete a head and shoulders top formation. We are also recommending 5% to the Singapore iShare (EWS AMEX), since its the long-term technical position has improved. The Singapore iShares look to be very strong technically, since they have broken out in both an absolute and relative basis.
"Each month we introduce several technically attractive looking stocks. Sometimes the stock will have broken out and is an immediate buy, while others will need to be stalked for a short-term correction. Finally, some may appear to be forming bases, but have not broken out. Such stocks are recommended in anticipation of a breakout. Traders can buy Baxter Labs (BAX NYSE) at $31.60 or above. More conservative investors should wait for a breakout above $35.50. Calpine (CPN NYSE) should be bought by traders at prices above $3.50 and by more conservative investors on a breakout above the $4.50 level. Felcor Lodging (FCH NYSE) is a buy above $11.90 by traders and above $12.60 by conservative investors. Valassis Communications (VCI NYSE) is a buy above $28.50 for traders, and above $29.75 for conservative investors. Finally, CSX Corp. (CSX NYSE) and Union Pacific (UNP NYSE) can be considered by both traders and conservative investors. CSX is a buy above $32.50 and Union Pacific is a buy above $58.25."