Try This Way Of Playing The NIKKEI Breakout
A soft open is likely.
Markets across the globe trade down sans NIKKEI 225. The Japanese
market has staged an important technical break out. It is free to rise to test
14k. EWJ is an instrument that I am employing right now. My cash is off the
sidelines and involved in EWJ. Cash rich in managed accounts this being the
season of weakness. The shorts balance the longs in the fund. Selectivity is the
key to success. It is a stock pickers market. You have little chance of index
funds delivering a satisfying performance. The major market averages are flat to
down for the year. It’s a flat market. Performing in a flat market requires the
ability to pick stocks in a timely manner. Pick and clip advancing and declining
stocks in a timely manner. The following stocks are displaying the necessary
movement up and down to consider involvement.
C. R.Bard
(
BCR |
Quote |
Chart |
News |
PowerRating) 64.82
The current level of trade in BCR indicates a late stage top formation. It is
already in decline. BCR is up over a point this year and over 20% in the last
year. The advance made has run out of steam. The best way to play this issue is
to sell it short. Now is a good time to get involved shorting BCR. The stock
topped out in May. It topped at 72.79 in May. Right now it trades roughly 10%
below the 5-year top. It is rolling over. Check the price pattern and look at
the money flowing out of it. So it’s rolling over and is likely to find support
along the way down. The stock can easily drop into the mid to high 50’s. It’s a
possible scenario. Right now the bias favors the bears within the trading space
of BCR. More sellers then buyers. Shorting BCR hedges the bet made on the long
side in MDT and BAX. Use the moving averages to pinpoint the stop losses should
the stock reverse trend.
BE Aerospace
(
BEAV |
Quote |
Chart |
News |
PowerRating) 17.03
Good action in the stock lately has rekindled the interest in BEAV. Better
action will occur above 17.75 at which point it confirms the extension of a
satisfying advance. The stock is up 46% this year. Clearly a leader. It is in
the process of coming out of a consolidation. The stock peaked on 8/1 at 17.75.
It has been adjusting or pausing to satisfy an overbought or extended condition.
Now the stock is trying to make a move toward that 17.75 zone. Passing through
and crossing that zone on a close is a buy signal. Still it is extended so move
with care. Use the 50-day moving average as your guide to protect with a stop.
The current 50-day line is rapidly rising. If the stock does not maintain a
price above that line then its advance will slow. So the rubber will meet the
road regarding the BEAV. Watch carefully and tighten stops.
General Electric
(
GE |
Quote |
Chart |
News |
PowerRating) 33.97
Here is a low risk short. Let me present to you a
dog of a stock the one and only GE. George Edward as those that play it know it,
is in decline. Note the chart. See the movement. The stock failed to lift above
the top of its base in May when it challenged the high made in December 2004.GE
is down close to 7% this year underperforming the draggy DOW. GE is a laggard in
decline. It is a good stock to short more of as it drops below 33.70. The move
below that point will tell of further slippage. GE is a low risk short. It
provides a way to hedge a bet. Stocks that are depressed can be exploited. GE is
a stock that is in the midst of a dark cloud. It is spinning on its tail. It
means the bears are controlling its destiny. That of course could change but at
this point in time the odds favor making money selling GE short. Stop at 36 on
part and 37.75 on all.
Intersil Corp
(
ISIL |
Quote |
Chart |
News |
PowerRating) 20.41
This is a stock that won’t quit and is right now
at this very moment in time ready to rock and roll. It is ready to ramp to
higher price points. The chart provides evidence of that realistic possibility.
The high made recently is 20.62. That high was made in June exactly 2 months
ago. It got over its mild intermediate term slump and is ready to challenge and
resume the advance that comes off of a long base that followed a brutal decline.
The advance is just getting underway. The base was long and solid. ISIL is up
22% this year and just 14% over the last 52 weeks. Most of the advance occurred
this year. A rise above 20.65 on a closing basis and the stock runs to higher
levels. It has plenty of headroom. It runs into trouble in the mid 20’s.Place
the trading stop at 18.90
IShares MSCI Japan Index Fund
(
EWJ |
Quote |
Chart |
News |
PowerRating) 11.23
The price is higher. Have you noticed the move
made by this instrument over the last 2 weeks? It crossed the top of its long
based. It has been locked in a base for the last 8 months. EWJ is up just 2.8%
this year. That is an indication of the beginning of what could be a serious
advance. The bulk of the advance could come later in the year. The NIKKEI 225
displays a bullish tone in the expression of trade. The heavy cloud may be
lifting and that frees up capital for investment. The demand for Japanese equity
is rising. That is the reason that stocks show higher price points. The NIKKEI
made its yearly high today before pulling back. Check out the chart on both and
notice the current trend. So owning EWJ provides little risk, which of course is
relative based on the level one could stand. I am willing to keep it down to
9.99.
Jack S. Rothstein
Rothstein Investment Advisory Services, Inc.
3600 Chain Bridge Road, Suite 200
Fairfax VA 22030
Phone 888-343-4825 — Fax 703-385-7232
www.jrmoney.com — www.wealthcast.com
Jack Rothstein is
the President of Rothstein Investment Advisory Services, Inc. and is a 20-year
veteran stock trader and a money manager.
Mr. Rothstein also writes Wealthcast, a monthly newsletter about the technical
behavior of the markets. He has been quoted on Bloomberg, CNNFn, the Dick Davis
Digest and the Dow Jones Newswire. Since 1993, Mr. Rothstein also hosted
WealthCast, a radio show in the Washington DC area covering the stock market.
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