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All,
A mostly down day, but nothing happened to change my opinion that the
bull market is resuming. I did pick up my PKD position at 5 ¼ and want to
add another low priced position tomorrow. My pick this time is Agco Corp
(AG). It's not really a small cap in that its the US's third-largest farm
equipment maker. It might be smaller than rivals Deere (#1) and Case (#2),
but it still has worldwide sales of over $2.5B. What I'm looking for here
is a turn around in an industry that has been in over a two year down trend.
I think we have seen signs of it during the last few months.
AG at 11.44 is moving up off the bottom of its Short term Up Trend
Channel (STUTC). It set an all time high of 36.28 on 6/30/97 then went into
the long term down trend I was just talking about. It bottomed at 5 ¼ on
10/8/98. From there it rose to a high of 13.44 on 5/24/99 and broke out of
an intermediate term down trend the same day. It then pulled back within
that channel and finally broke out again a little over a week ago. The
current STUTC has a top of 14 ¾ and a bottom of 8 7/8. The Tema StochRSI 13
is positive and rising and the Tema StochRSI 55 is also rising fast and
about ready to break out of negative territory. The fundamentals are
improving with revenues rising and earnings turning positive after a couple
of negative quarters. The Price/Sales is a very low 0.24, Debt/equity at
1.08 is below the industry average.
I'm going to open a position tomorrow. I'll set my target at 35 which
is just below the all time high. I'll set my stop just under the STUTC at 8
¾.
See the charts at http://www.geocities.com/WallStreet/Highrise/1025/
JimG
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