Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Minyan Mailbag: A Quick Trip Through Dodge City

By

No one makes me bleed my own blood

PrintPRINT

Editor's Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interacrtive dialogue among the Minyanship. We share this next discussion with that very intent.

Kevin,

Woke up this morning, looked at the Phelps Dodge (PD) chart and noticed it stopped at 93.99(999??).

Wow!

Is everyone looking at the same chart you're looking at?
Now the million dollar question: roll over, bust through/roll over, or revisit the highs?

Minyan Ralph

Ralph,

The PD trend line that was broken in April dates back to the October 2002 lows. It's not uncommon for a stock that violates such an important trendline to revisit the breakdown point, and that's what PD appears to be doing now.

I see the better than 3% move so far today, but I also would note front month copper remains on a sell signal that was given a couple of days ago. PD does not have to follow copper, mind you; stocks tend to act like stocks, not necessarily commodities, and this is true even when the business of the company is deeply connected. When a move in a commodity-related stock looks corrective, and this one still does, I find it helpful to take a peek at the related commodity to get a feel for the context there as well.

As for the million dollar question, I wish I knew the answer - then it really would be a million dollar question! Instead, all I can tell you is that when I factor together all the evidence at hand, the probabilities favor at best a final push through that key resistance, toward 96, and then a roll-over, rather than a revisit of the old highs.

Phelps Dodge (PD) 2x3 scale
Courtesy of Dorsey, Wright & Associates.


< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE