Diary of a Financier

From the Trading Desk: Weekly Update

In Trading Desk on Mon 31 Jan 2011 at 08:55
  • No changes to portfolio last week.
  • NSC trading around support @ $60.
  • MSFT to maintain its bull trend this week.

I’m one business day late with last week’s update.  There’s a lot going on in this world of ours, and I had no major changes in the core portfolio to report.  Therefore, I’ll provide an update on my thinking about some developing positions.

Yes, I’m holding onto my Norfolk Southern (NSC) position.  It’s approaching crucial support at $60 with a dividend ex-date coming on 2/2.  The technical picture is deteriorating for all timeframes, so I expect to close this position on a bounce off these levels.

NSC weekly- first breach of MACD support with other indicators pointed down.

NSC daily- price resting on support @ $60 and oscillators have crashed through trendlines.

Usually, MFI & Stochastic trendline violations are followed by snapbacks when they occur within a strong bull trend.  For educational disclosure, this is a special development identified by Andrew Cardwell, who called it a positive “reversal” (distinct from J. Wells Wilder’s “divergence”).  But, the indicators herein have overshot the downside to a point (MFI<40) that I don’t expect a full reversal, so I’ll sell into strength and not hold on for more than the chart will give me.

I’ve also implemented a sell stop on my Microsoft (MSFT) long position @ $26.75, where I find huge support looming:

MSFT daily- support @ $26.75

As I’ve indicated with my trendlines, MSFT hasn’t decided whether it resides in a short-term bull or bear trend.  Given the bullish slant in the weekly chart, I expect a shorter term bull to prevail, with a price target at resistance just above $31.

–Romeo

View Trading Desk

Advertisements

Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s