Monday, August 2, 2010


These charts are at the request of Bill, who has been quite active in the comments section of the blog recently.

AMD - I don't like it here. A descending triangle in formation over here. Got rejected at MA(200) recently and both MA(50) and MA(200) hang right ahead as resistances, not to mention the trendline from the descending triangle. If one does want to get long over here, I would recommend waiting for an entry point close to 7, where the support lies. In fact, this would make for a nice short if it breaks 6.90!

NVDA - Basically, its hard to like any stock that closed in the red on a day like today. Again, resistance lies close here in the form of gap resistance at 10 and Thursdays highs. If one does want to go long, I would recommend keeping and respecting a stop below the low of Friday as this could fall big if it breaks that.

INTC - Better looking chart than the other two but just too much overhead resistance in this one as marked on the chart. Lower volume on the up day today. If I remember correctly, it had very good earnings, and if a stock can't perform well after good earnings, it is better to move on and put your money to work elsewhere.

So there it is. My main problem with all these stocks is that they have very limited potential to the upside in my view. They all face multiple resistances right up ahead and the risk does not justify the reward in this case. I like to go into stocks with momentum behind them that can run the most in the least possible amount of time. That's why one of my favorite stock selection criterion is choosing stocks close to their 52 week highs, which have clear road ahead. Hope this analysis was of some use!

If any of you readers would like to get some charts analyzed too, just ask me in the comments section of the blog or on twitter and I will try to do what I can. Take care and good luck!


Bill said...

Much appreciated analysis, i actually had a similar conclusion already and wanted to pick your brain on them. AMD especially seems likely to fall below 7 and they've been hammered with downgrades and estimate drops b/c of perceived tech weakness lately, not to mention they are still operating in the negative although barely. It doesn't seem like tech is a favorite of this short bull run but we will see. Thanks again for the analysis, it is extremely appreciated, keep up the good work.

Anonymous said...

I would like to exchange links with your site
Is this possible?