February 8th, 2009

More Stocks with Basing Chart Patterns

Our guests left this morning and I’m all yours again. Don’t take this personally, it was really good to get away from trying to come up with something new to write about each day plus, generally, putting some distance between me and the minute-by-minute, hour-by-hour gyrations of the market.

But there’s another reason it was good to get away. Had I been watching the market as intently as I usually do, I might have either pulled the trigger and loaded up more on stocks as I saw some confidence returning or, listening to all the negative talk about how really, really bad the economy is and how frustrating Congress is for us, the average, lowly taxpayers for whom they work I might have sold on the market’s recent strength.

But I didn’t and am now thankfully looking forward to another exciting week. As I prepare for the upcoming week, I’m surprised by the large number of stocks that have made or are in the process of making bases.

Interestingly, many are in the Industry Groups that were the leaders last year before the $US tanked starting in July. They include the fertilizers, precious metals, steel, metal ores, and agricultural products. Many have crossed above their 90- and 180-day Moving Averages. Here are some of the more notable (click on symbol for charts):

I could have include many, many more (would you believe 100? what about 50?) but you get the picture. As show with the charts I included in last week’s “The Great Walls of Reversal or Consolidation“, the markets are teetering on a wall between consolidation and reversal. It appears that the same is happening in many individual stocks (like the one’s listed above).

Anyone who claims unequivocally that this stock or that has formed a rising wedge or cup-and-handle or inverse head-and-shoulder or falling wedge or whatever pattern …. well just don’t believe them. Their just mimicking the market, either ahead of or following. Add the above stocks to the pharma and healthcare stocks I focused on in my last post.

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