I recently did a p&f analysis for Peoplesoft (PSFT) for the Motley Fool PSFT thread and I repost it here for those who might be interested:
>>>PSFT's p&f chart is not so rosy. On the stocks relative strength (RS) chart, the stock has been underperforming the Dow since May. After having given a RS buy in July '97, PSFT turned down this May and has continued it's under performance. PSFT has a rating of B- on it's RS chart which means the stock is on a RS Buy, but in a downtrend. This was also coupled with a break of the Bullish Support Line (BSL), also in May, at $44.
The two factors I've just mentioned make finding a buy point while looking for a bottom a difficult exercise. This is what I'm doing as I like the stock and the company's prospects and I'm looking for a good entry point, however, the p&f chart indicates that the time is not yet at hand.
The next p&f buy signal would be at $41. I think the stock need more basing action before it can resume it's uptrend. The stock's main obstacle to the upside is the Bearish Resistance Line (BRL) which is currently at $47. This provides the upper end of the stock's current downtrend.
the computer software sector is Bear Confirmed at 22%. This means that there are only 22% of stocks in the group remaining with bullish p&f chart patterns. PSFT is not currently among them. However, when the sector does reverse back up (the group needs to move to 28% to move to Bull Alert status), I would expect PSFT to once again regain it's leadership status within the group. For now, the stock is a trading stock and not one you can buy with
confidence for the long term with the wind at your back.
Important moving averages to keep in mind:
50 day MA: $42.29
150 day MA: $44.56
200 day MA: $41.94
All of these MA's remain a negative in the PSFT technical story. I'll keep the board updated with regard to the stock's p&f progress in the future. For now, the stock remains on my watch list.<<<
Best regards,
Bruce
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