NWS – News Corporation – Global creator and distributor of top quality news, sports and entertainment, News Corporation's Point &Figure chart shows that a turnaround might be in development. From the February/April 07 double top at $25.40 prices dropped sharply breaking the main bullish support line at $23.80 reversing the trend to bearish. After the “Low Pole” at $19.50 generated a pull back to $24.70 the downtrend rolled out with a pattern of lower highs and lower lows reaching $17.80. Prices started trading sideways within the range $17.50/$20.20 until June 08 when the triple bottom breakout at $17.40 opened wide to a new wave of weakness which found temporary support at $14.00 before the final sell off to $5.90 developed. The recovery from the low reached quickly $10.60 before another corrective downturn set a new low at $5.70. The key signal that changed the nature of the trend from bearish to bullish developed recently with the “Long tail Up” which penetrating the main resistance line at $10.00 projected also an upside target to $19.50. A swift profit taking pulled back to $7.20 before the uptrend was resumed. Prices are now rising along the intermediate trend line although we are expecting some weakness in the nearer term that might trigger a revert towards the main support line. Long positions should be taken at the double top breakout at $9.50 with short term target at $11.80 and in the medium term at $19.50. On the downside lighten at the double bottom breakout at $8.40 and close all long positions at penetration of the main support line now crossing at $7.00.
BA – Boeing Company – Shares of the world's leading aerospace company and largest manufacturer of commercial jetliners and military aircraft failed to penetrate the key resistance level at $39.00 adding more weight to the bearish evidence. Since the double top at $104.50 of July/September 07 prices decisively break through the main bullish support line at $89.00 in November 07 switching the trend from bullish to bearish mode and clearing the way to the first downside movement to $76.50. After trading sideways until mid of June 08 the movement resolved to the downside again with a pattern of lower highs and lower lows reaching solid support at $36.50 where prices started trading sideways once again. Last month triple bottom breakout at $36.00 opened doors for the “Long Tail Down” to the lows at $29.50. Recent failure to break through the resistance level at $39.00 and downside targets activated at $30.00 and $26.00 leave no reasons to go long. All long positions should be closed at the triple bottom breakout at $35.50. Long positions should be taken only at the double top breakout at $39.50 confirmed also by the violation of the main resistance line with initial upside target set at $44.50.
CRTX – Cornerstone Therapeutics, Inc. – The specialty pharmaceutical company focused on acquiring, developing and commercializing prescription products for the respiratory market has seen its shares bouncing off the main bullish support line at $3.50 and getting ready for an exciting ride. Prices are also supported by positive relative strength Vs the market which makes it an outperformer. The September 05 “High Pole” at $9.70 worked as turning point for the trend reversal which was sealed in October 05 with the breakthrough of the main support line at $6.40 paving the way for further decline. The 28 months relentless downtrend was severe and interrupted just by two “High Poles” at $6.20 and $4.10 in April 06 and March 07 respectively. The final sell off reached the washed out level of $0.20 before developing into a “Low Pole” pattern which regained some ground to $3.60 projecting also an amazing long term upside target at $10.40. During the recovery the trend switched to bullish with the penetration of the main resistance line at $ 2.90. After trading sideways for few months within the range $2.00/$2.90 the movement resolved with an up thrust to $4.00 before retracing and finding support at $2.90 a level that worked earlier as resistance. Another convincing up thrust break the triple top pattern at $4.40 during March 09 proposing a medium term target at $8.30. Prices have recently bounced off the main bullish support line at $3.50 confirming the validity of the bullish trend. Long positions should be added at double top breakout at $4.80 with first target in the area $6.20/$6.40 and in the medium term at $8.30/$8.40. On the downside lighten at double bottom breakout at $4.00 and close all long positions at penetration of the main support line now crossing at $3.80 with possible contraction down to $2.00.
Fabio Verdelli (CMT) is equity technical analyst at MV Portfolio Advisors. He has analyzed commodities and financial markets using technical analysis since 1998 and implemented technical analysis to develop trade ideas and assess risk. He is an expert on Point & Figure charting method and is currently publishing analysis on “Trend-online” financial website and Yahoo Finance Italy.Verdelli is a member of the Market Technician Association (MTA) and a member of the nominating committee within the MTA
MV Portfolio Advisors offers capital investment and risk management consulting. The firm provides equity research reports based on technical analysis featuring investment opportunities arising in the marketplace to help portfolio managers making timely trades.