iBankCoin
Joined Nov 11, 2007
1,458 Blog Posts

FXI: Basing or Bombing?

FXI

There has been a lot of discussion at ibankcoin concerning China and FXI. From what I can tell by reading the comments section, many feel that FXI should be bought at these levels.  However, others, The Fly included, have been selling it via the ultrashort etf, FXP.

The chart suggests that selling the [[FXI]] would be the correct move for trend followers. The ETF has rolled over and is making a series of lower highs and lower lows. While some support has developed near $160, watch carefully to see whether the support holds over the coming weeks.

I bought some [[FXP]] today as I am comfortable trading this roll-over/lower-highs, lower-lows pattern. I will consider selling my FXP as the FXI nears support.

A case can be made for some basing action. If support holds around $160.00, it is very possible that the FXI will continue grinding out its base while trading within a range, likely to be between $160.00 and $200.00. If one is adept at profiting from stocks trading within a range, FXI might make a good vehicle. If this action does turn out to be a base, we can all watch for a monster break-out in the future.

Comments »

My Latest Breakout

In order to not have to recap a story about flooding my own house and having to replace my wife’s ruined furniture due to a caved in ceiling (read Fly’s madcap adventures with do-it-yourself plumbing), I decided to take some of my holiday break from work to replace a cracking fiberglass shower insert.

Wood’s Shower Before Destruction

Everything was going smoothly, until I discovered the dumb-ass plumber who put the original shower in ran the water pipes in the wrong place. You’ll notice in the picture below that the lines come out of the floor, and not from up between the studs. Since I will be tiling the stall, this small oversight is totally going to screw me up. Instead of banking coin with some trading tomorrow, I will instead be trying to move the water lines to the correct spot.

Wood’s Shower Demo’ed

Anyway, if my blogging and charting is light over the next few days, it should be apparent that I’m not having a lazy spell…I just need to get this project finished quickly.

Comments »

Evening Screen Results: Some Triangles

SQNM

 Tonight I searched for some triangle patterns. Here are two of the most interesting results. [[SQNM]] is my favorite of the two, but [[AATI]] looks like it might also be forming a cup-with-handle. As might be expected after 6 up days in a row on the indexes, both of these are near overbought.

AATI

Comments »

Intraday Setup: GLD Breaks Out of Triangle

The GLD exchange traded fund has just broken out of a triangle. Triangles tend to be continuation patterns, which means [[GLD]] should continue moving on up. Read a previous post on the GLD triangle here: Reader Request: GLD.

View the current chart here: GLD Chart

Be aware that the RSI(2) is nearing overbought. Also, although this is a picture-perfect breakout, I am wary to trade on technical signals generated during low-volume holiday-shortened weeks. All that being said, I established a position today. My stop-loss is set at $77.77

Comments »

Merry Christmas IBC’ers

Family Tree Christmas 2007

Woodshedder and family would like to wish everyone a Merry Christmas. Thank you for the good times, the good tips, and the fellowship of the past year.

 As you can see, we’re behind in our gift wrapping, so I’ll just leave you with a Ho Ho Ho!

Comments »

Week In Review and Updated Trading Guide

Nasdaq December 21, 2007

With just 5 trading days left in 2007, the indexes appear poised to book solid gains for the year. Although I was somewhat bullish and expecting a bounce after the weak start last week, I was still suprised at the strength shown by the Nasdaq on Thursday and Friday.

Last week’s action leaves the Nasdaq just under its down-trending overhead resistance line, and right at its 50 day moving average. Friday’s open left a huge gap to fill. The index is nearing overbought. My suspicion is that there will be more strength ahead this week, but the index will close the gap before year-end. My intuition tells me that there are many traders expecting a weak January, and some may try to get ahead of the selling by starting early, after Christmas. My guess on the Nasdaq’s close for the end-of-year contest is 2666.

For those playing along at home, the price has now reached the honey hole, and this would be the time to initiate more shorts. However, should the index find the strength in this Steer Rally to overtake resistance, it will be hard not to be bullish.

SPY December 21, 2007

The SPY has not recovered quite as strongly as the Nasdaq. It remains in the middle of its recent range. As the index is nearing overbought, I think there is a good chance that it will weaken this week, even before the indicators get back into positive territory. This of course would be bearish. If it does continue to strengthen, there is still a ways to go before it meets its down-trending resistance line. One item to note was Friday’s weak volume on the SPY. I assume Stockcharts’ data is correct, but it may not be.

Incidentally, On Friday I placed 2 long trades, the first longs I’ve had since the end of October. These are both short-term trades that will likely be closed out by Friday. I bought [[ECA]] and [[GFA]]. Both were featured previously as RSI(2) Oversold Plays. While I’m still bearish as the indexes near resistance, I feel the volatility squeeze in ECA and oversold condition in GFA will assist these stocks in trading up this week.

One last item to note going into this week is this article on consumers and credit cards:

Unpaid Credit Cards Bedevil Americans

Does it matter if consumer spending was strong in November if the majority of the spending was on credit cards? Probably not, as long as default rates do not rise. However, with rising default rates on consumer credit cards, a strong November may mean even higher defaults in the future.

Comments »

RSI(2) Oversold Play: GFA

The  previous RSI(2) picks have a 50% success rate. NTES is down ~5% from when it was profiled. However, ECA is consolidating beautifully along the 50 day average and looks poised to move again.

GFA, the latest RSI(2) < 2 pick, is interesting because it has a catalyst, as well as being oversold near trendline support. The catalyst is an IBD article, published today. Lower Mortgage Rates Help Fuel Brazilian Builder’s Growth.

The chart is also interesting as it shows the descent slowing near the 50 day average and a trendline.

RSI(2)<2 Oversold Play: GFA

 If I were to take this signal, I would want to take profits around $38.00 and would want a stop around $32.40. Watch the bearish divergence in the MACD and do not ignore the failure at the 50 day average.

 Ideally, the catalyst will make this bounce firmly, and none of the above will matter, except for taking profits.

A more conservative way to play this would be to wait for a confirmation day, or wait until the Stochastics give a buy signal.

Comments »