Which Way is Ford (F) Stock Heading? 11/30/13

Looking at the chart on Ford, I am going to say that it is better to be cautious if one was holding Ford (F) stock right now. Why?

Firstly looking at the shaded blue histogram swing trading indicator, I see lower highs. I have drawn a red line across the tops. Meanwhile price is still making new highs. See the black line. When the red line is pointed down and the black line connecting the price tops is pointed up, we are seeing a price divergence. In this case we would interpret that divergence as negative and say that price is making higher highs but with a weaker and weaker level of support as shown by the indicator.

Next take a look at the MACT dropping. These are the dual lines on the price chart. That is not encouraging. Previously when the stock was going up, the MACT was climbing. That is no longer the case.

Meanwhile fundamentals like energy prices are heading downwards, although I have not seen a huge drop at the gas pumps lately. Perhaps that is because of Thanksgiving. If gas prices drop, and interest rates stay low, that would be a positive environment for transportation stocks.

So which way is Ford heading?

The price is still above the blue uptrend line and the overall up trend is still intact. If price breaks down below this then I would definitely be concerned. In any case I would be following the trading signals to protect my portfolio. Be cautious… pare down.  But if price gets back above $18 and the black line, then to the bank we go.

Daily Chart on F is shown below.

How to Invest in International Funds 11/16/13

This morning I read the news that Sachin Tendulkar retired from cricket after 200 Test matches and a sterling career where he has proved himself to be one of the great batsmen of all time. Sachin is a hero in India. But for the internet I would have missed the announcement as cricket is hardly played here in the US. Even in this global environment that we live in, how myopic we can be. It made me think more International. Which countries are doing well in the stock market? The old stars were the BRIC countries; Brazil, China, India. The new stars are who? The answer may surprise you.

Looking at ETFs (Exchange Traded Funds) we can invest in the major stocks of another country by just buying that country’s ETF. For example

EWA   Australia                                               EWP    Spain

EWC   Canada                                                 EWL    Switzerland

EWD   Sweden                                                EWN   Netherland

EWG   Germany                                              EWQ   France                         

EWI     Italy                                                      EWT    Taiwan

EWJ     Japan                                                   EWU   United kingdom

EWK   Belgium                                                EWZ    Brazil

FXI      China Large Cap

IIF       India Fund

With the momentum analysis technique that I use monthly on my 401K, the best selection would be:

EWP Spain, EWI Italy, EWG Germany and IIF India. See charts below.

Italy has issues with debt, Spain with high unemployment and yet here they are rising faster than other countries. Germany’s inclusion seems expected given that Germany seems to be carrying Europe economically, ever since the Euro was introduced. Prior to the Euro, businesses were exiting Germany because of the high wages and high cost of manufacturing. India was included as it had the fastest mid-range momentum change upwards but the chart certainly has a different pattern.

Technical analysis of charts by itself does not show which funds are rising fastest. A comparative momentum analysis does a much better job of revealing that. A combination of the two can be very helpful to determine direction and then to find an entry and exit point.

401K Analysis – Market is still pointed Up 11/10/13

It is always more comfortable to second guess the market and hedge our bets by saying I expect a pullback. The stock market cannot go up forever and will inevitably pullback. The charts are still pointed up as evidenced by the chart on the S&P500 (SPY). See below. Charts look oversold, so we might see a short term pullback.

In my current employer’s choice of stocks, the mutual fund with the strongest momentum upwards is the Royce Opportunity fund. Royce funds have been usually in the top three but because of high redemption fees I stayed out of it. If you are however in Royce, I would continue to hold it and you should be seeing nice gains in your 401K. The next two remain WFA SPL MidCap VL and NB MDCP GRTH Trust. The Fidelity DIV Intl fund is showing strength, so if I want an international fund, that would be my choice. See charts below.

In my previous employer’s 401K mutual fund selection, top of the list is Vanguard Explorer Admiral, then Artisan Mid Cap Val INST, then Fidelity Growth and Fidelity Contra is also popping in.

I remain biased upwards at this time. The momentum method that I use for my 401K analysis has done very well for me. It has less in and outs and over time appears better than my daily charts analysis on mutual funds. That may not be true for individual stocks however. The top moving mutual funds stay on track for large periods of time. My experience has been very good with this momentum system..

By the way, IYR has taken a nasty move to the downside, and the last post “Idea for a Long Trade” has not worked out. Despite lining up the broader market with the sector and the individual stock, this one went south. I have to shrug it off and stay with plan.