Welcome. The contents of this blog comprise my personal observations on the stock market from the perspective of using both fundamental and technical analysis by reviewing market data and stock charts based on the methodologies of William O'Neil of Investors Business Daily and his books, from Stan Weinstein's books, and most of all, through lessons learned over the years by listening to Gary Kaltbaum's "Investor's Edge" radio show on Business Talk Radio.

Criteria of stocks include first researching sectors to determine which are strong and which are weak using the ADX indicator (>40 = increased volatility); focusing in on a leading sector and buying leading stocks on a high volume
breakout (minimum 2x average) above a base; stock prices are higher than $25/share with daily average volume higher than 300K; positive and increasing PVT (indicating institutional ownership), positive and increasing RSI (indicating relative strength compared to other stocks in the market).

Please keep in mind that
I am by no means an expert, nor are my posts intended for anything other than to share my opinions of what stocks are doing for the purpose of getting feedback. Thus, please do your own research before taking action on what you read here. I will be adding posts on topics of interest as I learn about them.

Thursday, June 26, 2008

RHHBY: Much overhead resistance, weak stock, non-impressive institutional ownership.

Created when RHHBY was $84.75.

Roche Pharmaceuticals (RHHBY) -- Since its recent high on 3/3/08 has been forming an Elliott wave A,B,C DOWN correction (e.g. 1,2,3,4,5 down, a,b,c up, resuming the coming 1,2,3,4,5 down in the coming weeks) and will break the low of 79 (and then some) before it will likely move up again.

Technically speaking, the stock has been a relatively weak stock (low RSI) since it decided to start gapping down on 4/7/08. A week later, it fell below both the 50-day moving average AND the 200-day average which is a negative for the stock. It tried a breakout on 6/1/08, but failed and broke below the moving averages again. This is another sign of weakness in the stock. Lastly, institutional investors haven't really budged since the beginning of June which means that they do not have a belief whether the stock will be going up or down and so they are in a holding pattern.

In short, the stock needs some major work before it should even be considered a buy.

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