FITB - tag category postings

Today I am closing out FITB and CEMJQ from the BestonlineTrades Recommended list.  The initial entry on FITB was 7.60 and the initial entry on CEMJQ was .275.  So there there is 11.45% on FITB and 16.36% on CEMJQ.  I just feel as though there is a better entry down the road on these two.  In addition the follow through volume on FITB today is horrible, plus there is that huge gap from yesterday.

That gap will probably act as support assuming we get a retracement on FITB.  Perhaps there is another entry near there somewhere.

The other ‘problem’ that FITB has is the two price swings on May 8th and 11th of 2009… one had about 100 million in volume and the other had almost 200 million in volume.  Those two swings based on their volume do not look very easy to break.  That was absolutely blowout volume on those swings and while we had a good move yesterday and some follow through today the volume is nowhere near what it was back then.. So that is a ‘problem’ for me and something better to watch from the sidelines.  Hence the closing out of FITB today.

CEMJQ is pretty much the same story.  It has a nice move yesterday but today looks like a very short term sell signal based on volume if we close under yesterday’s high.  Perhaps it could pull back to the top of the triangle it broke out of, or maybe even back to the apex of the triangle.

The other reason why these two where closed out on the BestOnlineTrades Recommended List is because we are entering now that time frame of August which is not an ideal month for blockbuster volume breakouts.  That is not to say they cannot happen, just that it seems less probable.

Both Fifth Third Bancorp FITB and Chemtura CEMJQ have initiated buy signals as of the early morning today and based on my previous post.  Both stocks were trading in congestion ranges similar to what was occurring in the SP500 and other broad market indices.

Today they have spoken and are now part of the BestOnlineTrades Recommended List.

FITB had a really clean and clear looking uptrend since the advance began in early March.  Up until now it has been stuck in a long somewhat sideways trading range and consolidation.  But what was clear was that it was not intending to give back that much ground.  So today we see a breakout from the resistance line.

CEMJQ has basically the same story as FITB.  I think FITB had a cleaner looking uptrend but the structure of both was more or less similar.

So for now I believe the trend is your friend with these too.

I think it is always interesting to do a side by side analysis of the broad market indices and then try to see part of the broad market action in the individual stocks.  I have always found that this helped me to gauge trends either up or down.  The broad market indices are indeed the ‘mother ships’ and the vast majority of stocks tend to follow them.  Of course there are plenty of exceptions at all times, but for the most part this is what I find to be true.

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I am initiating FITB and CEMJQ on the BestOnlineTrades recommended list with buy stops.  That means that they are not fully recommended yet but are positioning themselves possibly for some good upward movement.

FITB is a mid cap bank that has a fairly clean chart and has been price trending upwards for quite some time now.  It has that run away rally during early May but since that time (about 2 months) it has consolidated in a slow downward slanting wedge of sorts.

Now it finds itself kissing the up trendline as of today and so far holding ground.

So I am initiating a buy stop at 7.60 for FITB on the premise that once it is able to get above down trend resistance we could start to see a new up trend.

CEMJQ or Chemtura is the Chemicals company with large international exposure that could see benefits from a collapsing dollar price.  That one has also had a nice run along and uptrend line and done a more violent pullback back to up trendline support.  I am initiating a buy stop on CEMJQ at .2750

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FITB or Fith Third Bancorp is worth another little quick mention.  It did a little teaser of a rally above down trend resistance line a couple days ago but today it has broken down and come back into that range, or under that range of resistance I should say.

This could be a classic case of whipsawing but the safe stance now on this one is on the sidelines.  There was an argument for going long on that trendline break but the volume was miserable and the price expansion was really not too convincing either.

So now FITB is approaching the long up trendline support which is absolutely critical to maintain if we are to see a new uptrend begin.  That red shaded area is the danger zone.  It is sort of in a danger sound right now coming back down to trendline support but until it is broken the uptrend can be said to be still in force.