Heyer Capital, LLC

investment management and timely advice from a local CPA (Fox Valley, Wisc.)

Stock Ideas

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I thought I’d publish some of my ideas/analysis for tomorrow’s market. As always, this is an educational exercise for me. By putting these ideas out there, I force myself to really watch the market. These are not recommendations for you, dear reader, since I have no idea who is reading this.

CAT looks like it’s working on a cup with handle, except the base is a week shorter than I’d like to see for a typical base. What’s a cup with handle? I’ve superimposed lines on the chart to show that it looks like a teacup in a profile. The peak of the handle on the right side of the base indicates the typical buy point. The Investor’s Business Daily often describes this pattern as the most powerful pattern for breakouts.

CAT- Cup with handle?

In this example, the peak of the handle is at $67.72. The ideal buy point is $67.72 + ten cents. Why ten cents? You want to make sure there’s enough buying pressure that will move the stock beyond the handle-peak. Ten cents is your margin of error. You COULD buy at $67.72, but I occassionally see stocks appoach the peaks, waver, and fall back. Wait until the buying pressure starts to move it higher.

To paraphrase William O’Neil, “All stocks are bad, until they’re ready to start going up.”

Written by heyercapital

April 2, 2007 at 2:59 am

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