ABBV, CMG, PENN, UAA updates 04/27

ABBV: Reacted well to earnings yesterday and has held its 200d SMA mostly as support over the past month. There was nice positive divergence developing (green arrows vs red arrow) and now the technical indicators are all pointing up and on a buy, wanting to see higher prices. There’s gap fill at $109, but resistance is now at the 50d SMA (103), which is also the gap down open level.

abbv daily

The big picture Elliot wave count has price now most likely in major-5 of Primary III and should target mid-120s before all is said and done. Hence, there’s still a lot of upside potential left and long stops can be place at a close below the rising 200d SMA.

abbv

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CMG: Popped over 24% (!!) yesterday on good earnings and good forward guidance and a lot of good things are happening to the daily chart, as marked in the chart it self. This is what we like to see happening to know the trend is reversing back to up. Yes of course, price is almost up 100% since its mid-February low, but as you all should know by now, money is NOT made by bottom and top hunting it’s made by being on the right side of the trend, and those signals already started to come in soon after.

CMG daily

The big picture has Cycle-2 most likely complete at the February low, which means that, if correct, Cycle-3 (or C) is underway and we could very well see CMG run to at least $1000 a share (C=A, from the mid-February low). Thus there’s plenty of upside potential left. Since price on the daily chart is now hyper extended (well-outside its upper bollinger band) it would be wise to wait for it to drop a bit and move back inside to go long. Support is now at $390. A retest would be a great entry 🙂

CMG monthly

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PENN: Big Picture wise, PENN should now be in major 5 of Primary V of Cycle-3 and target around $37 +/-  $1 depending on which Fib-extension it will chose.

penn monthly

Shorter term, when assessing the daily chart, we see how a nice bullish falling wedge formed out of which price moved back up higher after finding support at -yep you guessed it by now- the 200d SMA… Anybody who tells you it’s not important clearly needs to look at some charts more often 😉 All the TIs are pointing up, all are on buy and want to see higher prices. Resistance is at $31, and once overcome targets, based on simple symmetry off the $25 low, you guess it again: $31 + ($31-$25) = $31 + $6 = $37.. BINGO! Once cycle-3 is completed I expect price to drop back down to the $20 level. Hence, be sure to sell before that happens!

penn daily

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UAA: Like CMG (see above), also here a lot of good things have happened recently. Note the move back above its 200d SMA mid-February (also note many, many stocks bottomed then, telling us the markets will most likely not revisit this low!) and has since gyrated around it many times. If you’d use the close >200d SMA to go buy long and close <200d SMA to sell, you’d have 5 made trades which are all losing trades, unless you’d sell partial positions at a certain win percentage, but all losses would be rather small. If you’d then bought again this week, you’d be sitting on some nice profits and eventually these will totally erase those small losses. This is trading in a nut shell: minimize losses (low risk), maximize gains (high reward), which can still mean your win:loss rate is low, but your profit:loss rate will be high. It is the latter that only matters.

UAA daily

With the daily chart looking better and better each day: price >20d>50d>200d, and the SMAs starting to turn around and back up, lets look at the monthly chart. Like CMG, UAA may have put in a Cycle-2 low, right at the 76.4% retrace. Price is still in the big downtrend channel and needs to move above it ($24) to suggest the big downtrend is over, and a new big uptrend has started, but for now the technical indicators are starting to move back up, coming from deeply oversold and the MACD is giving its first buy signal. I am personally long UAA, since it closed back above its 200d SMA and will reduce exposure before earnings (May 1, BOM) just in case. If response is good, I’ll add more again 🙂 If bad, I’ve my stops in place.

UAA monthly