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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (30088)12/15/1999 10:34:00 AM
From: IQBAL LATIF  Read Replies (1) | Respond to of 50167
 
Important charts..

Althpugh since inception of htis thread we have been in the winners takes it all stocks still sometime when it make sense I highlight important issues..
When I talk of laggards...amr TXU UCM FPL...WHY?
Dorsey and Wright MAKE A GOOD CASE TODAY...
AMR AMR:

AMR was mentioned in this morning's JagNotes. ING Baring reiterated their Buy rating, and S&P Market Scope reiterated their Accumulate recommendation. Technically AMR appears to have turned the corner, and presents a trading opportunity here. Let's take a closer look at AMR.

AMR had been under pressure for months after having topped out in May at 75. The stock slid to a low of 53, falling along with other airlines stocks as Crude oil prices soared from $10 to $27 dollars a barrel. AMR was able to find great support, though, at the 53 level, holding there four times. Slowly but surely the stock has moved up from that level, and most recently it has completed a bullish catapult formation when it broke a double top at 65. So AMR has recently been able to get through two previously key levels of resistance - at 62 then 65. AMR is moving up out of a big base with excellent support formed at the 57-60 range. The main trend is back to positive and the RS chart is starting to uptick. The RS for AMR versus its peers is positive, showing this is one of the better stocks to focus on in the Airlines sector. The momentum is shaping up for AMR, too; the weekly momentum just turned to positive and the monthly is very close to turning to positive. The initial price objective is 75 for AMR, and with initial support at 60 and the pullback to the 66 area, AMR could be bought here for a trading move. Use 59 as the initial stop loss point. Another name to consider in the group is UAL for a turnaround play. Below is a view of AMR.

AMR - AMR Trend Chart
75 -----------------------------------------------------------------------Top-
74 *
73 X *
72 X O *
71 X O X *
70 --*---7-O-X-O-*------------------------------------------------------------
69 X * X O X O *
68 X O X O O * X
67 X O X O * X
66 X O X * O * X
65 --*-O-X-*---O-X---X-----*---------X-----------------------X----------------
64 O * 8 X O X O * X O X X X
63 * O X O X O * X O X O X O X
62 O X O X O * X O X O X X X C O X
61 O X O X O * X O X B X O X O X O X O X
60 ------------O-X-O-X-O-------------X-O-X-O-X-O-X-O-X-O-X-O-*------------Med-
59 O O O X O X O O X O X O * *
58 9 X O X O O X *
57 O X A O X * O *
56 O X O X X X O X * *
55 --------------------O-X-O-X-O-X-O-X-O-X---*--------------------------------
54 O O X O X O X O X *
53 O O O O *
52 *
51
50 ---------------------------------------------------------------------------

Industry Group: Aerospace Airline (Risk: Bull Alert 38+)

Utility Update

On Wednesday, Warburg Dillon Read upgraded several Electric Utility stocks. As well, Morgan Stanley Dean Witter upgraded FPL from neutral to outperform. As many of you know, sector rotation is a very important part of our work. The Electric Utility sector presents a very interesting situation. But before we get to that, let's give a brief review of sector bullish percents.

For each sector we calculate the percent of stocks on Point & Figure buy signals each week. That percentage is then plotted on a grid that goes from 0% to 100%. On that grid, there are two zones so to speak. The 70% level and above is what we consider the "Red Zone" or high risk area. The 30% level and below is what we consider the "Green Zone" or oversold area. When the sector bullish percent is in a column of X's we consider the offensive team on the field and when the sector bullish percent is in a column of O's we consider the defensive team on the field for that sector.

In January of this year the Electric Utility sector reversed to O's after being into the "Red Zone" or high risk area. The sector bullish percent told us to put the defensive team on the team. Shortly thereafter the Dow Jones 20 Bond Average gave a sell signal after being bullish for 18 months. This year has been a terrible year for the bond market and utilities. In fact, the PHLX Utility Index UTY is down for the year. That's the first time since 1994 that has happened. Now the Electric Utility sector has come coast to coast - the current reading is 22%. That is the lowest the reading since 1987 for the sector. In fact, it is even lower than the 1994 low of 24%. So needless to say, the Electric Utility sector is washed out. Everyone who wants to be out of Utility stocks has already sold. That presents opportunity. With the sector so washed out and since the nature of these stocks is to be slower moving, pilot positions can be taken in the Electric Utility sector here and then added to once the Dow Jones 20 Bond Average gives a buy signal.

As for the specific stocks recommended on a fundamental basis today in JagNotes, UCM is near its bullish support line and it was reiterated a "Buy." FPL has set up for a double top breakout at 46 and it was upgraded from neutral to outperform. AEP is down at levels where it traded in 1994 and it is on a long tail of O's down which usually results in at least a bounce up. It was reiterated a "buy." PE was reiterated a "hold" and that stock has stayed above its bullish support line. TXU is approaching excellent support in the 30 to 32 area and was reiterated a "buy" at Credit Swisse First Boston.

Electric Utility Bullish Percent Chart

100 --+---+-+-+-+-+---+-----------
98 | | | | | | |
96 | | | | | | |
94 | 2 | | | | |
92 | X O | | | |
90 --+---1-O-+-+-3---+-----------
88 X C C | | X O |
86 C O B B | | 1 O |
84 9 O X O | | X 5 |
82 X 4 9 O | | X O |
80 --X-O-5-O-3-+-X-7-X-----------
78 8 5 X O X O X 8 X O
76 7 O 4 O 2 O X O X O
74 X O X C X 6 X O X 1
72 X 6 X O 1 7 X O A O
70 --X-8-3-1-X-O-X-9-X-O---------
68 X O X O X O C O X 2
66 X O X O X O B O | O
64 X O X O X 3 X | O
62 6 O 2 O X O A | O
60 --X-O-1-O-X-O-X---+-O---------
58 5 O X 2 X 4 9 | O
56 B O C O X O 7 | O
54 X O X O A O X | O
52 A O X O X O X | O
50 --9-9-+-O-9-O-+---+-O-7-------
48 X | O X | | | O X O
46 X | 3 X | | | O X O
44 | | O 6 | | | O X 9
42 | | 4 X | | | O X O
40 --+---+-O-X-+-+---+-3-6-A-----
38 | | O 5 | | | O X O
36 | | 5 X | | | O 5 B
34 | | O X | | | 4 X O
32 | | O X | | | O X O
30 --+---+-O-2-+-+---+-O---O-----
28 | | 6 X | | | C
26 | | 7 X | | | O
24 | | 9 | | | | O
22 | | | | | | | O
20 --+---+-+-+-+-+---+-----------
8|9 9|9|9|9|9|9 9|9
9|0 1|4|5|6|7|8 8|9




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