More Discount At Dollar Stores?

Dollar stores big shots Dollar General (DG) & Dollar Tree (DLTR) are displaying similar chart patterns as of late. First up, DG. The stock is currently on support level 55. The level was once a resistance point in 2012. A break of the 55 level completes the 7 months Head & Shoulders formation and implies a target of $48.

dg

 

Meanwhile, DLTR despite registering a new ever high last year, failed to follow through, signaling weakness. As it stands now, DLTR is forming a 9 months Head & Shoulders, with 49.50 as the neck line which is the same neck line as the small H&S formation of 2012. A completion of the pattern would imply a conservative target at the gap of 2013 around $42.

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dltr

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Topping Toppers

Financial Engines (FNGN) is almost completing a clean 7 months Head & Shoulders top. Neck line at 51. A break of the neck line will imply a target of $32.

fngn

 

 

General Motors (GM) is also close to completing an 8 months Head & Shoulders top with a neck line at 33.50. A break will imply a target of $25.50.

gm


What The 200MA Means For The Aussie

The Aussie dollar AUD/USD completed a Head & Shoulders bottom by closing yesterday above 0.909. But the 200MA is currently capping its ascent for the second time, giving it some resistance importance. So a break above the 200MA at 0.91250, would provide a conservative entry. Implied target is 0.950.

aussie

Aussie ETF (FXA) traders have the pattern neckline at $91.20 and the 200MA at $91.80. Implied target of FXA is $95

fxa


Shirts On Sale Soon

Phillips Van Heusen (PVH) chart may be interpreted in several ways, but they are all bearish. Firstly, PVH completed a 10 month rising wedge on 21st of January (in blue). PVH made a throwback into the pattern but turned away after a couple of weeks and moved decidedly lower. Implied target for this pattern is $87.

Second point of view is that PVH is constructing a double top formation with a neckline at 114 which has yet to be broken. Implied target for this pattern is $93.

Finally we can also interpret the chart as an 8-months Head & Shoulders pattern with a weak right shoulder. Implied target is also $93.

Take your pick !

pvh


Universal Head & Shoulders Top

Universal Health Services (UHS) is on an uptrend that started 5 years ago. Lately, UHS is forming a 5 months symmetrical Head & Shoulders top with 77 as the make or break level. Implied target is $69

uhs


BPZ Resources Attempting A Reversal

BPZ Resources (BPZ) completed a one year Double bottom formation closing above $2.60. Interestingly, the second bottom has morphed into a 5 months H&S Bottom which has broke out earlier. Volume also has increased 3X giving more confidence in this long trade and a possible reversal and the end of BPZ 5 year decline. Initial target is $3.60. Stop loss @ $2.40

bpz

 

The big picture

bpzw

 

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Do you have a habit of trading?

I really hope not and let me tell you why..

A habit is a behavior done with little or no conscious thought.

Do you want to trade with little or no conscious thought, do you really want to put your money under these circumstances?

I am sure you don’t. That is why trading should not evolve into a habit.

Trading should be a “boring” systematic approach through chart patterns.

No pattern = No trade (at least for technical analysts)

However your brokerage (online/offline) wants you to create that trading habit in you, even Bloomberg, Cnbc, and most media outlets wants you to have the habit of trading. Why? Because fostering trading habits increases customer lifetime value.

Do Not comply! Refuse

At a previous post I mentioned triggers that run after you and signal & push you to trade for whatever reason. You can review them here, be aware of them and make note whenever they trigger.

You do not have to trade every day or every week or even every month. You should only trade when there is a valid breakout of a pattern even if it means you trade once or twice a month or even a year!