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Tuesday, December 22, 2009

Ford (F) Technical View - a Warning Sign?

The graphs of Ford (F) take quite a different shape than that of other major companies. Take a look at the monthly graph:
The highest levels of Ford stock price were achieved during 1999-2000 while for the majority of other stocks the highest levels occured before the last bump at 2007. What I see interesting at this graph is that now the price is on an important level - the one that played resistance twice back at 1988-1990 and again at 2007-2008. There lies the Moving average (100) too.

It's no secret the company has its strong sides like innovative auto lines, good management, nice public reviews, etc. There could be issues with the debt levels but as the Macro conditions improve those should not lead to any significant problems.Still this level of $10-12 could play the role of strong resistance for a while.
The reasons for such thinking might be seen in the next graphs although they might need some time to develope more sure patterns.

On the weekly graph we see the price making new highs while the MACD fails to make such. The Stochastic is in its overbought area but still hasn't turned down. So there might be some more time for goind up but the MACD divergence should be weighting even more. This view is supported by the fact that on the daily graph the situation looks pretty the same.

Having all that said it might not be a bad idea to watch the graphs in the next few days to see if they will develop any clearer patterns.

Monday, December 21, 2009

EUR / USD Technical View - Strong support for the Dollar?

On Nov. 17 I wrote an article about the negative correlation between the dollar and the stocks. About 2 weeks later the dollar started its victorious march and the stocks didn't follow. The macro conditions about such a movement were clear. Let's take a look at some graphics now.

The monthly graph shows a clear down path for the Euro. Although the MACD is on a positive side, the Stochastic is strongly pointing down. There is a bearish divergence between the Stochastic and the price. The Moving averages are not so strongly bullish about the Euro. All this could lead to a fall of Euro to around 1.3650-1.37 - a resistance level for the first upside movement of Euro at Aug 2004. This level is also 50% decrease from the last upside movement. This may seem like a bold view but the other graphics seem to support it.

The weekly graph shows the bearish Stochastic divergence (we have higher levels of Euro and lower highs of the Stochastic) even more clearly. The Moving averages still haven't crossed on the downside but there is still more the Stochastic to go. It is close to the oversold level but still not there. The daily graph shows more.

On the daily graph the MACD is strongly negative. The Stochastic is strongly oversold. There could be some retractions to higher levels of Euro but with such a negative MACD the dollar positions seem stronger for now. With the support from the graphs of the higher time-frames, the path seems only one way. Till it gets on or close to the above mentioned levels.

Thursday, December 17, 2009

Citi offering priced at $3.15

Yesterday (Wednesday) Citi put a sell offer at $3.15, ten cents bellow the price at which the government bought their shares. A smart move that temporarily eliminated the danger of unexpected sell of more than 5 billion shares from the government. The price paid by the bank is that it has to sell more shares at that price to get the desired 17 billion dollars.
At least now we know the shares sold the last 3 days were not from the government. About 3 billion shares changed hands. Maybe some of them were shorts but whatever the case someone bought that quantity.
Interesting point now is to see who will enter as a shareholder in Citi. The quantity offered is about 23% of the current shares outstanding which is quite a big percentage.

The technical picture hasn't changed much from yesterday's view of the chart. The things are still pointing downward. And in the aftermarket the level of $3.2 was touched. We could see a spike to $3.15 and even some bellow but the stock is becoming to look more and more oversold.

Sofix daily review

A simple view about the Bulgarian stock exchange index movement.

The levels where the index is these days
are just the 38.2% Fibonacci retracement level for the whole upside movement from 257.65 achieved on 24.02.2009 to 514.67 made on 17.09.2009 (shown by the two red lines on the graph). The RSI is in
its low but MACD still points downward. Still the MACD hasn't go as low as it was on the previous down attempt at the beginning of November. If the Fibo level (412 - 416) is not broken wild there is a
chance to see a recovery soon. If it gets penetrated the next stop could be found at 370-385.

Wednesday, December 16, 2009

Citi daily review

The news about paying back the TARP money unleashed the selling pressure on the bank stock and the price fell bellow the support level of 3.80-84. One of the questions now is if the stocks being sold are from the 5 billion the government decided to sell. Still the government officials said they expect 13-14 billions profit from their investment in Citi. With about 7.7 billions of stocks such profit comes to an average increase in the price between $1.68 and $1.81 from the initial conversion price which was $3.25. If we accept that the government selling started after the news about paying the TARP was published this makes the best selling price at about $3.80. If the whole number of shares were to be sold at that price, which they were not because the total turnover volume didn't exceed a billion, the profit would be about $2.75 billions. So the gap of about $10 billions between that figure and the whole profit the government expects shoud be filled from somewhere. Or they could be possibly wrong in their expectations... With the government being left with about $2 billions of stocks, a profit of $10 billions goes to a price increase of about $5 from their initial price. So continuing this line of thought they could be expecting in the next 6 to 12 months a price of about $8 for the Citi stocks.
An interesting thing to mention is that Citi hasn't issued yet a price at which it will try to get its new shares sold in order to pay the remaining part of TARP. A reasonable thinking is that it waits to see where the price will be after the government ended with their selling. Another reasonable thinking might be that Citi needs a price as high as available because this will let it sell less shares. On the other hand the bank might not be in position to be able to "negotiate" a price at that deep level.

The above are just some thoughts derived from the movements and news on the market.. A hypothesis which could be right or wrong, the time will tell.

The technical daily view of the stock.
The price fell bellow the support level of $3.80. The volume of the last two days grows and the price falls accordingly. MACD points downward, Stochastic also. Today we could witness another fall. The next support level is around 3.30-20.

Thursday, December 10, 2009

Citi technical overview

The short interest shares of Citi as of Nov 30 2009 are 215,990,623. At Nov 13 2009 they were 194,829,624. The average daily volume for the both dates are 236,804,540 and 340,175,866. We see an increase in the shorts as well as a bigger decrease in the average daily volume of the stock. So the sentiment towards the stock turns to be more negative.
The significant jump in the share's price that took place at August comes just after the Sold short shares thumbled from more than 1.2 billions to just about 300 millions.
Now we don't see so big amount of short sales so the fuel for a price advance (if any) should come from somewhere else.

As it is seen on this daily graph the recent news flow about the company is more intense than anytime in the past 3 months. The price falls. An interesting thing is the price is on a short-term support level and Stochastic is in the oversold area. But it is still pointing down. So the negative sentiment might be growing but soon we could see its end. At least in a short term.

On the weekly graph however we see a sort of sideway motion. Around the support line and currently beneath it. Still MACD is around zero and Stochastic pointing downward. The best scenario for bulls could be the price to form some positive MACD divergence but such one could take several weeks to arrive.