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Technical Analysis Weekend Update
Friday, January 13, 2006

Weekend Update- OIH, BRY, COMPQ, GPRO, HGX, XAU, & NEM

Oil Services Holders ETF (OIH) - Daily Chart

On November 22nd, 2005 the stock scan picked up the OIH as an ascending triangle breakout. The pattern duration was 38 days and that time is here now, and the OIH has almost reached target. The strongest sector right now is the oil and energy sector. When will the all time highs stop? Well, the move will probably stop around the $144.00 - 148.00 area, unless the OIH gets an extension. If the OIH makes new indicator highs along with price, the OIH will probably get an extension move higher. Indicators and oscillators are bullish, and stochastics are bull flagging. I think the OIH will surpass the stock scan price target, because the PPO is still very strong and not showing any signs of weakness. Therefore, I don not believe the move is over.

Berry Petroleum Co. (BRY) - Daily Chart

BRY is one of the energy front runner stocks. This month alone, BRY is up 25.37%. The stock scan also pick up this stock as a bullish pick. The daily chart shows that BRY is in a large cup and handle and has also broken out of a smaller symmetrical triangle. Indicators and oscillators are bullish and the stochastics are flagging and are starting to look bullish. The PPO is very strong and continues to make new highs along with price. Today, BRY closed up 7.82% at $71.71

The Nasdaq Composite (COMPQ)- Daily Chart
The daily chart of the Nasdaq is bullish. As you can see by looking at the chart, the COMPQ is forming a nice bull flag. The COMPQ has rallied sharply for the 7 days on massive volume. Indicators and oscillators are bullish, and stochastics are bull flagging. There is very little bearish divergence. This is the type of market for buy and hold types, not nervous Nellie's.

Gen-Probe, Inc. (GPRO)- Daily Chart
GPRO is another stock scan pick. GPRO on the daily chart shows that it has broken out of a triple top ascending triangle. It then pulled back to test the breakout line and fill the gap and formed a nice bull flag. Today it has broken out of the bull flag and is up 2.85% at $51.56. I do have a lofty price target on GPRO around $65.00.

Gen-Probe Inc. (GPRO)- Monthly Chart
On the monthly chart, GPRO is in a long rectangle / slim jim. In addition, it held the uptrend line on the weekly. GPRO is bullish on all time frames. It is one of my favorite stocks. Again, indicators and oscillators are bullish. My target is in the $70.00 - $80.00 range once it breaks out above $53.00. There is also huge short interest in this stock which should propel it higher.

The Housing Index - Philadelphia (HGX) - weekly chart
The weekly chart of the HGX shows that it is in an ascending triangle pattern. It has recently completed a wave 3 to 4 correction and completed an ABC within that correction. Once again, all indicators and oscillators are starting to turn up, and the Aroon just had a bullish cross. Technicals look good. This week the HGX is up 2.16% at 546.40.

The Gold and Silver Index - Philadelphia (XAU) - Daily Chart
The daily chart of the XAU illustrates that it has formed a nice bull flag. Today the XAU broke out of that bull flag. The XAU is up 3.18% today at $141.97, which is also a new 52 week high. It looks like a buy here. I would load up on charts like GLG. The indicators and oscillators are bullish, and the PPO continues to make new highs along with price.

Newmont Mining (NEM) - Daily Chart
The daily chart illustrates that NEM has been in a flat sideways consolidation and has also formed a bull flag. Today NEM broke out of that bull flag. As you can see, NEM like the XAU, has been in a bullish trend and looks poised to move higher. I would recommend buying NEM here since it has broken out of the bull flag that is confirmation that it will move higher. Indicators and oscillators are moving up along with price, and you can see that the PPO is making new highs. Furthermore, the stochastics have remained over bought which is a bullish sign.

 

 

 

John,

I'm a new subscriber and so far I am very happy with the site. I'm just learning about T/A and know just enough to be dangerous (to my account)! Anyway, I have a question about the portfolio positions.

I'm not following where to place stops. You note "when pattern breaks" but I don't understand what you are referring to. Do you set your stops at a technical stop or a percentage stop or a trendline, etc?

I've had several subscriptions to sites over the past year and, so far, yours is my favorite. I like the voice lessons and the technical scans. One of the major issues I'm having with T/A is understanding how to spot the strongest sectors so I'm hoping looking closer at some of the scans on the site will help me with that as well.

Thanks,


Ben

Sector Performance Link

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Hi John. I just wanted make sure I understood the pattern duration time period. Are the days shown figured in Trading days or week days.

I thought you said trading days but wanted to make sure as quite a difference over longer periods.

Thanks,

Bill

Pattern Duration Link

The Pattern Duration Definition--The number of days over which the pattern formed. Pattern Duration is equivalent to Pattern Length. In searching for technical events, one may specify the pattern duration in days. Longer duration patterns generally forecast price movement over a longer period of time. For example, a 90 day pattern anticipates price movement over the long term, compared to a shorter-term 30 day pattern.

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John

Currently, I have set aside about 2% of my total investable dollars for option trading. I am still trying to decide what percent of my remaining investable dollars with which to "trade" stocks. Do you have any guidelines that might help me out?

Thanks for your help!"

Bob

My sugguestion has always been no more than 5% of your total trading capital (portfolio) should be used for options. I use to put "option trades" in the portfolio table and eventually I will again, but we ran into some issues when I suggested no more than 5% total, but somehow traders had mistaken that for 95% and blew themselves up.


Technical Analysis Chart
       
 

OIL SERVICE HOLDERS TR 2041 (OIH on AMEX)
Industry: Holding and Other Investment Offices
 
Event Details for: Ascending Continuation Triangle
An Ascending Continuation Triangle is considered a bullish signal. It indicates a possible continuation of the current uptrend. This pattern occurs because the lows are moving increasingly higher but the highs are maintaining a constant price level. The technical event occurs when the price breaks out of the triangle formation to close above the upper trendline, thereby confirming the pattern. More...
Event Date: Nov 22, 2005
Opportunity Type: Intermediate-Term Bullish
Close Price: $126.70
Target Price Range: $144.00 - $148.00
Price Period: Daily
Volume: 7,115,500
Pattern Duration: 38 days
Inbound Trend Duration: 99 days
 
OIH FROM THE PATTERN SCAN
Breakout Price
OIH
Candlestick
LATEST TECHNICAL EVENTS
Chart Type
BRY
Confirmation
NASDAQ
Confirmation Type
GPRO (THE IDEA WAS GIVEN BY THE PATTERN SCAN FOR THIS PICK)
Doji Lines
MONTHLY GPRO CHART UPDATE
Event Type
$HGX--KNOCK ME OVER WITH A FEATHER FROM THE JUICE MAN!!!
Experiential Rating
$XAU
Exchange
NEM
Inbound Trend Duration