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All,
A good week with Thursday and Friday's great moves even if I was
stopped out of MDM and FNM Thursday. I replaced FNM with SLB Friday and
still have some cash left. The Dow Jones Industrial Index (DJI) did break
out of its Horizontal Channel (HC) to an all time new high Friday. That's a
Trader Vic type trend continues signal and is very bullish. The NYA, OEX,
and SPX are close to the tops of their HCs, but haven't broken out yet. The
NASD OTC and Russel are moving up off the bottom of their HCs. This looks
very much like another leg up with the DJI leading the pack, but I don't
feel very comfortable about it. Maybe it's because Guy got a short signal
<G>. I am going to follow my system which calls for me to be 100% invested
in long positions at this point, but I will watch my stops closely.
This week I wanted to add another industry leader in another industry
group that has started to move. I narrowed my choices to Boston Scientific
(BSX) and Federal Express (FDX) which had both broken out of a CANSLIM type
cup formation. I finally decided on FDX because it was near the bottom of
its Short Term Up Trend Channel (STUTC) while BSX was near the top of its
STUTC.
FDX at 93.69 is in a standard deviation STUTC that I constructed from
the 2/10/99 low to Friday's close. The bottom with the deviation set at 1
is 91.75, the top with the deviation at 2 is 106.5. It broke out of the
CANSLIM cup formation a little over a week ago, ran up for three days and
then fell back below the breakout point before breaking out again on good
volume Friday. It's also in an Intermediate Term Up Trend Channel (ITUTC)
with the top at 113 5/8 and the bottom at 86 3/4. The Tema PDI-MDI is
positive and although it fell all week, it did reverse and rose Friday. The
ADX and MDI are diverging with the ADX rising after giving a buy signal
about a month ago. Everything looks like it is setting up for a run up to
at least the top of the ITUTC. The fundamentals are good with the
Price/Sales at 0.9, the Debt/Equity at 0.4, and revenues up 7% last year
while earnings c,imbed 78%. I'm going to open a position some time Monday
morning. I'll set my target just under the top of the ITUTC at 113 and my
stop under the bottom of the STUTC at 90 3/4.
I'll send a FDX.GIF chart to everyone on my chart email list. If you
aren't on the list, and want on, just yell.
JimG
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