Wednesday, June 18, 2008
Let's start wit Monsanto:
I opened that position end of May when MON showed increasing momentum. Very positive signs: long term uptrend (12 day MA > 50 MA > 200 MA), encouraging volume action and (important) supporting fundamentals (bull market in agriculture).
The longer term picture also looks very positive. After breaking out of a 5 month consolidation, MON might be ready to run. Bottom line: Fundamentals and Technicals line up perfectly. My next step, though is to start scaling OUT of the position, since the crowd (who is usually last to buy) now gets in. Guess I will sell some MON around 150.
Another LONG position, which I feel way more negative about it is IBM. Entry looked great at the beginning end of May:
Since then, IBM broke its uptrend and started to move sideways. I also don't like volume and momentum action. From the fundamental point of view, IBM might suffer from the slowing global economy. I will sell this position with a small loss around 122.5.
Sunday, June 8, 2008
The last weeks were dominated by “hope for an economic rebound later this year”. IMO, last Friday indicated a major shift towards “fear that the
I’m afraid we are entering a dangerous downward spiral with housing and oil taking its toll on the consumer, who will shut down spending and thus accelerate the slide. Falling equity prices will contribute to the elimination of wealth, a classical “reflexive” phenomenon, to speak in Soros’ terms.
Unfortunately, I was not able to act on Friday. If oil runs above 140 on Monday, fasten your seat belts for the equity markets.