Some Charts of Interest

Scanning through my charts this weekend, I noticed many displaying extreme conditions.  So below are a few.

Above is the transportation index.  The index is a leading indicator for the health of the economy by moving goods from point A to point B.  The stocks in this index are extremely overbought and in new high territory.

The new highs - new lows index has been hanging at complacent levels for the past few weeks.  Not an area to be loading new long positions. Compared to the panic low area above, buying was lower risk.

Just to show how strong of a market uptrend we are currently experiencing.  AAPL (a stock that is represented in more funds than most any stock) lost -12% this week alone and the mark closed at new highs again this week.  So any recovery by AAPL stock, would bode well for more new highs.  

The Tale of Two Stocks

AAPL reported 4th quarter earnings this afternoon.  Results came in shy of expectations. Chart below.

AAPL is selling off after hours to the tune of -10%.  We originally mentioned shorting AAPL at around $538.00 per share.  The long term play (shorting AAPL) should be held until $315.00 per share which is where the trend reversal pattern price point is displayed.  

Nokia, unlike AAPL is trending higher, and will reveal 4th quarter earnings tomorrow.  More importantly the company will reveal sales for the Lumia 920 and give some guidance.  We originally started buying NOK here Nokia Technical Pattern, at around $2.60 per share and have used options along the way also.  

Bottom Line:  AAPL is down -15% 2013 year to date, while NOK is up +17% year to date. There has been a shift in investor sentiment regarding these two stocks.  Both stocks still have significant downside (AAPL), and upside (NOK) according to their respective charts. Thank you for reading.
 

APPLE Update

I was asked to update AAPL. I mentioned that AAPL looked like a good technical short based on a head and shoulders reversal patter that it was displaying.

Above is the current pattern of AAPL.  Notice the stock has broken the neckline of the head and shoulders confirming the pattern.

Above is a daily chart of AAPL.  Notice that the 50 day moving average is trending lower (bearish). Prior to today the stock had been oversold on a shorter term basis setting up or a bounce (today).  The stock Is still under the neckline and the 50 dma, keeping the trend reversal pattern intact.

Still Bullish

We are still bullish on the markets.  Below are just a few charts that support a bullish focus for stocks continuing to move higher.

The transportation index above is right at all time highs for this index fund. The chart is still not overbought on the RSI, giving more upside ahead.  The transportation index is seen as a leading economic indicator for moving goods from point A to point B.

The bullish percentage indicator above measures the number of stocks on a Point and Figure chart that are on a buy signal.  Clearly trending higher and above the moving averages.

The NYSE Summation Index is a breadth indicator that measures daily advances minus declines.  The index is trending strongly higher and above the moving average.

Bottom Line:  We have a higher trending market that has the look of moving higher in the coming weeks before hitting extreme overbought conditions. Thank you for reading.

Nokia Update

Nokia (NOK) has received back to back negative news that has caused the stock to experience some temporary volatility.  Back taxes owed in India and patent infringement are the cause of the volatility.

On the daily chart above.  NOK is in a 17 day consolidation level that runs from approximately 3.80 - 4.30. Having stayed at this level for this period has worked off some overbought reading.

The weekly chart above, illustrates a bullish cross (13 exponential over the 34 ) after close to two years of lower trending.  The weekly chart looks good, and I would expect a move to around the 5.00 area for this trend to continue.

Bottom Line:  We originally began buying NOK at the 2.60 level, and plan to hold the stock through 4th quarter earnings, and beyond, as long as the turn around story keeps improving.  The charts look fine with the weekly chart experiencing a bullish cross.  Thank you for reading.