OVI Market Round Up
This is an email with lots of charts, something we will be doing more of very soon.
Ok, first for the indices. Starting with the DIA (DOW ETF) which we don’t always look at, but what you can see here is that it’s been unambiguous since late November, in that that OVI has been consistently positive, and we had an easy breakout in early January.
Next for the SPY – except this time you had two bull flags to choose between in early January, with a corroborating OVI to go with it. If I had to put my house on it, I’d say we’re getting near to being over-extended, so this requires us to use a trendline to get us out if it takes a downturn.
Before I get into the banking stocks let’s get AAPL out of the way, as it’s newsworthy and always interesting. Basically we just need to leave AAPL alone for a bit. You can see it’s been in a downtrend since October – which means you could never have gone long if you’re using my OVI and breakout method. So, you’re left with potentially going short – which before October had been a hazardous exercise with AAPL. And now, we just have to let it find a base. When it does, I’m confident there’ll be more fun to have with this stock, but for now we have to find others to play with.
The banking stocks have been very good to us and they’ve been simple. I’ve been bullish on GS since September and this chart shows you why. Consistently positive OVI and then it’s a matter of picking a breakout.
MS is a similar story …
As is JPM. You simply have to pick your moment by way of an easy-to-see consolidation pattern.
BAC is looking wobbly now, but it’s had a good run since it’s breakout around $8.50 in September. Remember, I’ve been bullish on banking stocks since way back at that time. Just look at the OVI and pattern to see why.
When we talk of quality, one of the things I look for is William O’Neil type of stocks that fit his CAN SLIM criteria and my own OVI-breakout criteria. Here’s one I’ve had some fun with, UHS, which has been appearing in my CAN SLIM LITE filter (in my OVI Traders Club) since mid December, and is now over 20% up. Notice also the pocket pivots in December which preceded the flag breakouts.
Now, we can’t get them all, and here’s one that I missed – partly due to the fact that it had earnings, and partly due to the fact that I didn’t see this coming! It’s NFLX.
AMZN has been bullish for over two months now, but the technical breakout that was just about playable by our rules only happened with the two bull flags that have just happened in January.
BIDU is one that is looking interesting right now, but be aware that earnings are on 4th Feb.
CVX is another that has earnings imminently (1st Feb) and is forming a flag-like pattern with a consistently positive OVI. Shame about the earnings being so close.
F has been one of those stocks that’s tough to play, but there’s no getting away from its positive OVI and overall uptrend for many months now. The key breakout was in December.
SLB is one that a number of you got and some of you bemoaned that you didn’t take action on! A consolidation just below $74 with a good looking OVI for a couple of weeks beforehand, this was a decent setup, but the breakout occurred on the back of earnings, so no need to beat yourself up about that! Now look for another consolidation with the OVI corroborating.
Finally, at the end of the alphabet, here’s YHOO which has formed bull flags alongside a very co-operative positive OVI. It’s just breaking out again, and ideally will consolidate again.
At some point the market is going to take a rest. To my eye it looks a bit overextended. But try not to have an opinion. Just use our simple rules and let them take care of business.
All the best
Guy