Another stock I've been watching very closely is Bear Stearns (BSC). BSC just gave a Triple Top buy signal at $38 on Friday and the stock is acting very well of late. The stock is still 39% below it's 52 week high (similar to LU which I wrote about this morning which is about $24 (22%) off it's all time high). Big difference between the two stocks, however, is the RS, which for BSC is bearish with a RS sell signal as of 10/6/98 and still in a column of O's. The RS chart is not too far from a reversal into X's, however, the RS must still be called bearish. In the past 29 trading days the stock has outperformed the Dow on 15 of them. Nothing special there.
A horizontal count price objective yields a $47 po. The stock is in an incomplete vertical count situation, however, the current po is $53. Both po's suggest the stock will break it's nemesis, the BRL, which has gone unchallenged since being drawn in at the July $61 high. $43-$44 is a critical area for the stock as a Bullish Resistance Line lies waiting at $43. Should the stock make it through this resistance that provides 10% upside from current levels, a reversal in the RS will likely be the next brick placed in the wall of the bullish case.
Lots of ifs, but a triple top buy, an extremely low p/e make BSC worth a look.
All IMHO,
Bruce |
