the truth of pretty pictures, of course Dorian Gray had a pretty picture.
=DJ CHARTING STOCKS: Only Genuine GM Rumors Accepted Here
27 Jun 13:28
By Stephen Cox, CMT
A Dow Jones Newswires Column
NEW YORK (Dow Jones)--Typically a fundamentally troubled company is in
trouble on the charts as well.
Tyco International (TYC), whose former CEO was recently charged with tax
fraud, broke down on the charts when it slipped under $42.89 support in
February. Wednesday's news that WorldCom (WCOME) had been cooking the books was
a fundamental blip in an uninterrupted technical downtrend that began three
years ago when the stock topped out at $64.50.
So it's notable then that the charts are showing General Motors Corp. (GM) to
be in decent shape.
Early Thursday afternoon General Motors denied a rumor that accounting at its
financing unit was suspicious. In fact, General Motors, now around $52, is very
near a potential chart bottom. In any case, it won't be in any conceivable
technical trouble unless it blows through $37-area support.
On June 4, when General Motors was trading around $59.50, this column
suggested that a decisive move below $57.33 would leave the stock vulnerable to
a test of $49.01 target support. The $57.33 support was taken out on June 12.
Thursday's intraday low of $50 means that a test of $49.01 is practically in
the bag.
It's now necessary to tune that projection up.
The unfolding pattern on the weekly chart implies that target support is now
a band from $49.22 to $48.94. A move below $48.94 points the stock down to
$42.79 to $41.72.
A test of the $42 support area would really amount to a routine test of
support from $46 to $37.60 formed by the stock's wide consolidation formed last
September to November at the bottom of a five-month decline from the $90.12
bull market high.
In other words, a weekly close below $37.16 would reinstate a long-term bear
market.
To try out the new Charting Markets weekly technical newsletter go to
djnewswires.com
For more technical analysis see: Dow Jones Newswires, N/DJTA; Telerate, page
4247; Bloomberg, NI DJTA; and Reuters key word search "Charting Markets".
-By Stephen Cox; 201-938-2064; stephen.cox@dowjones.com
(Stephen Cox, a chartered market technician, is chief technician for Dow
Jones Newswires.)
Data by CSI, Commodity Research Bureau
(END) DOW JONES NEWS 06-27-02
01:28 PM
Copyright 2002 Dow Jones & Company, Inc. |
