Judy, I did some p&f work on CMB this morning and I thought you'd be interested:
The stock has started to act better on it's p&f chart, but is still below it's Bearish Resistance Line (BRL) which I've written about many times before.
When the stock recently moved to $45 it gave a double top buy signal before pulling back to $41. At $45, CMB also broke a short term downtrend line (see my discussion with Eric for the significance of this event). This STDL was drawn above the $57 September high and with this valid break, a move to test the BRL is the next critical juncture. Buy signals below the BRL are for traders only and have a higher probability of failure than when a stock is trading above it's Bullish
Support Line (BSL) and has a bullish main trend. With p&f charting, there is a certain amount of evidence needed to show that demand is in charge of the stock, so a p&fer would not have been able to bujy the stock at $36. A bottom fishing pattern developed at $41 and that price would've been a good trading entry price. If I had the time I would've posted this bullish pattern, but time is short.
Anyway, the BRL is at $52 and the stock needs to break this downtrend line to turn the trend around from bearish to bullish. RS is the other factor that needs to be considered when determining a stock's main trend and CMB has been doing a bit better on that front. The stock has a (B- Buy/trend down) rating. P&F'ers like to see B+ RS ratings and stocks trading above their own BSL's to call the main trend of a stock bullish.
I recognize I will miss the 20% off the bottom by allowing the stock to turn bullish once again according to my p&f discipline, however, I'll be happy with the middle 60% as I know I won't sell at the absolute top either. CMB has 3 problems upcoming at the $51-52 price level. The BRL at $52 needs to be broken while on a buy signal. This is most important. Also, 3 previous times, the stock has turned around and headed south after reaching $49,
$51, and $50, all in September. Granted, this occurred prior to the bullish for banks Fed interest rate cut, however, it's important to pay attention to price levels where supply re-enters the stock. Lastly, a Bullish Resistance Line (brl), a secondary trend line, is awaiting at $51.
The current bullish price objective resulting from the buy signal described above is $63. How the stock deals with the BRL and the other factors I've outlined will determine whether the po is achieved. A crossover of the 50 day MA would also be a short term bullish trend signal.
50 day MA: $51.94
150 day MA: $64.35
200 day MA: $62.55
Bruce |
