PEP – Pepsico – Shares of the manufacturer and marketer of soft beverages are raising along the main bullish support line heading to test the key resistance at $54.00 first and then at $57.00. January 08 peak at $79.50 turned out being a reversal point in the uptrend when the movement break through the main bullish support line at $75.00 changing the overall outlook from bullish to bearish. The first wave of contraction found support at the double top at $63.50 where a corrective up move pulled prices back to $75.00 before resuming the downtrend with a Long Tail Down pattern which lead prices to reach area $50.00 in October 08. After trading sideways for few months within the range $50.00/$56.50 a Low Pole pattern developed reaching the lows at $44.00. Lately prices penetrated the main bearish resistance line at $53.00 switching the trend to bullish again. After pulling back at $47.50 prices are now raising along the main bullish support line. Relative Strength vs the market is maintaining its positive bias in the long run making it a likely outperformer. Stay long and increase at triple top breakout at $54.00 with short term target set at $58.00 and in medium term at $68.00. On the downside close all long positions at penetration of the main bullish support line now crossing at $50.00 with possible contraction to $44.50.
SWY – Safeway, Inc. – The supermarket chain saw its shares breaking through the main bullish support line at $19.75 turning the trend to bearish mode. From April 07 top at $38.25 prices weakened slowly reaching support at $30.25 where they started trading sideways developing a flat base and higher highs. The penetration of the main bullish support line at $33.75 changed the overall outlook to bearish leaving no reasons to stay long. The first wave of contraction ended up with the Low Pole pattern at $25.75 where a corrective up move started pulling prices back to $32.75 where a double top pattern developed. Another sharp contraction to $27.75 cleared the way for the second phase of the downtrend defined by a pattern of lower highs and lower lows. The lows were reached in November 08 at $17.25 where another Low Pole pattern developed before a corrective up move bounced off the $24.25 resistance. Prices dropped again to $17.25 where the buyers took the lead once again. Lately prices break through the main bullish support at $19.75 turning the trend to bearish mode. Relative Strength vs the market is negative anticipating a likely underperformance for the near future. The advice is to close all long positions at triple bottom breakout at $18.75 with initial contraction down to $14.00 and then to $12.00. On the upside open new longs at penetration of the main bearish resistance line now crossing at $20.25 with target set at $29.25.
NTAP – NetApp, Inc - Provider of integrated solution that enables storage, delivery, and management of network data and content, NetApp has seen its shares lifting above key resistance at $17.00 adding weight to the bullish evidence. On December 06 prices reached the peak at $41.50 starting to trade sideways with base at $35.50 and developing a pattern of lower highs. On May 07 the penetration of the main bullish support line at $35.00, confirmed by the double bottom breakout at $34.50, sealed the trend reversal to bearish. Prices weakened sharply finding temporary support at $23.00 where a corrective up move initiated bouncing then off resistance at $32.00. Another wave of contraction down to $19.00 followed by a reaction to $27.00 deluded of a possible turnaround but the downtrend was not over. The final sell off reached the lows at $10.50 in November 08. Since then prices raised slowly breaking through the main bearish resistance line on March 07 at $16.00 switching the trend to bullish. Lately the violation of the key resistance at $17.00 cleared the way for further uptrend. Relative Strength is positive implying a likely outperformance vs the overall market. Stay long and increase at double top breakout at $19.50 with short term target set at $23.00 and then at $28.00. On the downside lighten at double bottom breakout at $16.50 and close all longs at penetration of the main bullish support line now crossing at $16.00 with possible contraction down to $8.00.