Technical Patterns of Reinvention: GENYSE:GE reported earnings yesterday and had a minor gap up to the high of the sideways range with some selling for profit toward the end of the day. This company is reinventing. Momentum Runs have developed out of Dark Pool Buy zones for swing trading since the last time it was mentioned.
Industrials
MSM: Holding Above 200 Moving Average In Support ZoneMSM looks to be Triple Bottoming with Triple Bullish Divergence on the MACD above a Congestion Zone and has also formed a Bullish Deep Gartley Visible on the Daily and 4 Hour Timeframes. If it holds we could see the period of consolidation break upwards and given the industrial nature of this stock and how other industrials have performed after experiencing similar retraces towards support, we would likely see a move towards the ATHs, after that we would then aim for the Fibonacci Extensions which could hopefully even take us to the 1.618 near 150 Dollars.
GE continues its bullrun LONGGE on the weekly chart has been in a trend up with some corrections along the way since a
double bottom in the summer of 2022. It has had some sections spin-off including the health
care poriton of the company. This company as a mega-cap industrial with cash on hand
is independent of interest rate concerns. Much of its business in long term contracts. I see
GE as a great long-term long trade. I am focused on accumulating long shares as well an
options into 2026. The last correction on this chart was this past October. I will average more
in at this time but am really looking for another smaller correction like last October for a
bigger buy to add to the positions. GE is safe from the volatility of most of the technology
stocks and in my opinion, is a good stock to "back up the truck".
Carefull tech here comes industrialsProvides online manufacturing services which enable manufactured custom parts to be sold via xometry.com
NASDAQ:XMTR is forming a base just after it broke out a polarity zone around $30
The AMEX:XLI is making new highs along with AMEX:XLK and AMEX:XLC but the leaders are showing signs of exhaustion and some rotation to small cap might be underway
The AMEX:IWO is close of breaking out of a huge base
Lets wait and see!
Stocks at New All-Time Highs Ahead of Earnings: CATThis Dow component attempted a new all-time high and failed. However, it has ample support from the prior sideways trend after the previous all-time high. NYSE:CAT has been over-speculated as it moved out of its bottom low.
The company reports end of January. Watching to see how the stock performs in the next week or so should indicate whether it will be stuck range bound for another couple of quarters or if it will have the fundamentals to support a new high. For now, it has more of the appearance of a range bound sideways pattern developing.
Caterpillar Inc. did well during the years of huge real estate and city development in China. Unfortunately, the great industrial revolution of China is long gone, their population in decline due to fewer births and more deaths reducing their billions. Their consumer-based economy has slammed into Market Saturation as their population continues to age at a faster pace than any nation on earth. CAT needs to find another source for its machinery.
TSXV primed for a BULL RUN, which means SO ARE MINING STOCKSFor those into junior mining stocks, one of the best indicators of a bull run is the TSX Venture Exhange. Typically, when this chart bounces off oversold territory, it has led to strong bounces for most miners on this exchange and the overall mining sector.
A positive divergence is forming on the monthly. No guarantee it will hold up, but something to keep an eye on for sure.
UPDATE: Barloworld M Formations! Not one but TWO for the down! In May 2023, I wrote to you saying I epxect Barloworld to drop.
ANd if you had the patience and just invested in this short, would be paying nicely by now.
Not only because the price is down but also with the time held you could have made some interest income from the short.
Anyway, there is nothing more confirming than when you have a Bearish formation like the M Formation and then you have ANOTHER Double Top.
ANd since the price broke below the neckline, it's been carnage for Barloworld.
The target remains at R64.17. And if it breaks below, I'll write another trading analysis...
Northrop Grumman Corporation (NOC) October 2023 to April 2024
Northrop Grumman Corporation (NOC)
Fundamentals:
Market Cap: $73.996 billion
EPS (Earnings Per Share): $30.13
P/E Ratio: 16.232
Book Value: $102.293
Operating Margin (TTM): 11.49%
Profit Margin: 12.27%
Return on Assets (TTM): 8.45%
Return on Equity (TTM): 31.91%
Wall Street Target Price: $504.33
Revenue (TTM): $37.881 billion
Gross Profit (TTM): $7.474 billion
Recent Earnings:
Q2 2023: Actual EPS of $5.34 vs. Estimated EPS of $5.33 (Surprise: +0.1876%)
Q1 2023: Actual EPS of $5.5 vs. Estimated EPS of $5.09 (Surprise: +8.055%)
Q4 2022: Actual EPS of $7.5 vs. Estimated EPS of $6.57 (Surprise: +14.1553%)
Technical Indicators:
52 Week High: $547.6509
52 Week Low: $414.56
50-Day Moving Average: $436.8846
200-Day Moving Average: $453.325
Beta: 0.437 (indicating the stock is less volatile than the market)
Dividends:
Forward Annual Dividend Rate: $7.48
Forward Annual Dividend Yield: 1.53%
Payout Ratio: 29.72%
Performance Metrics:
YTD Return: -9.27%
1-Year Return: 4.55%
3-Year Return: 17.6%
5-Year Return: 11.52%
10-Year Return: 19.05%
Analysis:
Northrop Grumman has demonstrated a solid financial performance with a healthy profit margin and return on equity. The company's earnings have been consistently beating estimates, indicating strong operational efficiency. The stock's P/E ratio is relatively moderate, suggesting it might be fairly valued. The company also offers a decent dividend yield, making it attractive for income-seeking investors. However, the stock has underperformed YTD, which might be a concern for short-term investors. Given its industry positioning and financial metrics, it seems to be a stable investment for those looking at the defense sector.
XLI : No Buyers YetXLI has had a picture perfect breakdown.
We warned our members of this last week.
this pattern technically has more downside but it is very oversold and were approaching the breakout trend line as well as many weeks of consolidation & support.
A bounce is most likely as the daily chart is becoming exhausted to the downside.
Industrials are holding best, which stock is better?All these 3 stocks are leaders in the Building Materials industry.
NASDAQ:USLM is the clear leader between the 3, breaking from its 2022 highs earlier.
The technicals between NYSE:MLM and NYSE:VMC are very similar but, the fundamentals are another story.
Martin Marietta NYSE:MLM , produces crushed stone/sand/other aggregates for infrastructure/commercial/residential construction markets.
It has a +9% and +13% 3-year EPS Growth rate and Sales Growth rate respectively, while NYSE:VMC has -8% in EPS and +20% in Sales.
I prefer stocks with both EPS and sales trending together.
So, NASDAQ:USLM and NYSE:MLM are my choices.
Raytheon - A Potential Earnings Pump To WatchEveryone wants to get rich quick. Because getting rich quick means you:
a) Get rich
b) Quick
Then you can wear big ugly sunglasses, a crappy t-shirt, flipflops, sit on the beach, eat a lot of meat, drink a lot of alcohol, and be promiscuous with women.
This is the modern human's dream, right?
And so everyone loves to speculate on potential earnings pumps and dumps.
There really is more to aim for in life.
Raytheon is one of the U.S. Military Industrial Complex cornerstones and is more or less a weapons mill for the NATO proxy war in Ukraine, which is of note because of the recent escalations of the conflict and how it can affect the U.S. Petrodollar, and thus bonds, oil, gold, equities, everything.
DXY - The US Petrdollar And The "Prigozhin Coup" In Russia
Geopolitically, the conflict between China and the International Rules Based Order is heating up. The current edict is to "de-risk but not decouple" from China (notice they never say "from the Chinese Communist Party"?).
In mid-June CEO Hayes was quoted by the propaganda machines as stating that decoupling from China was pretty much impossible because of all the parts and components that are manufactured in the mainland.
What this means, if you ask me, is that going forward, certain companies are going to have a very hard time meeting their target EPS and revenue estimates.
Raytheon may very well be one of them, as foreshadowed by a salvo of sanctions the Xi Jinping administration placed on them and Lockheed Martin.
The situation in China is very volatile right now. The IRBO wants control of China when the CCP falls. Xi Jinping and the other nationalists want to make sure that outside forces do not steal the motherland.
And so one day soon, we may find that Xi has thrown away the CCP in the middle of the U.S. night, and the markets will have themselves a series of consecutive red days like we've all never seen before.
Xi can weaponize the crimes against humanity that the Party and the Jiang Zemin faction have committed in the persecution of Falun Gong that started on July 20, 1999, and use the truth to protect both himself and China.
Organ harvesting and genocide of a group of 100 million spiritual cultivators with upright faith is certainly enough of a weapon to handle all the threats the motherland can be facing.
So why do you care about this if you're trading Raytheon?
Because a basic principle of markets is they go up when big money is selling and go down when big money is buying.
Raytheon and other military companies ironically never really pumped following the QE recovery from the COVID pandemic dump.
It wasn't until the Ukraine War began that Raytheon finally ran the highs.
And then it retraced.
That kind of retrace is actually really bullish and what bulls should want to see if they want their $145 billion~ company to become a $1.4 trillion company.
But the problem with the theory is more manifest on the weekly charts:
31 weeks of ranging and no breakout is not bullish.
And yet, after taking lows, it continues to recover. The most notable price swing is the $105 to $92 leg that just occurred.
I feel that Raytheon has some fundamental hidden bearish divergences to it and this is why it has traded this way all along, with the ultimate purpose of selling a lot high, and then selling it all above the all time high.
This hidden divergence, I think, is that U.S.-based companies may find themselves cut off from the Chinese supply chain in the very near future.
Only to tip all the bulls on their backs like stranded turtles and then dump and dump and dump and dump and not come back.
So I believe that with the setup at hand, the catalyst is actually the July earnings.
But if you look back at previous earnings, Raytheon doesn't have major pumps. It can go a bit and then it will run after.
Implied volatility on options for the July 28 expiry are only 20%, slightly higher than the 17% average.
But before we get there, I expect we're going to see prices return to the $92-93 range and give the best buying opportunity.
The catalyst for this, I believe, will simply be market-wide correction, which I outline in the following two posts:
Nasdaq - The Great Bear Trap
And
SPX/ES - An Analysis Of The 'JPM Collar'
In summary, there will be a shakeout in equities that will probably not be long lived, even if it's violent.
And after that, things will make their final run up, many of which will set new highs or new 52W highs, etc.
What's left for the remainder of 2023 and the start of 2024 doesn't look like it's going to be very pleasant, to speak frankly.
So make sure if you see Raytheon at a new high, you don't go getting ahead of yourself, longing the top.
ITW WCA - Cup and HandleCompany: Illinois Tool Works Inc.
Ticker: ITW
Exchange: NYSE
Sector: Industrials
Introduction:
In this analysis, we are looking at Illinois Tool Works Inc. (ITW) on the NYSE, a noteworthy name in the industrials sector. The weekly chart suggests a possible bullish continuation in the form of a classic Cup and Handle pattern that has been forming for the past 608 days.
Cup and Handle Pattern:
The Cup and Handle is a bullish continuation or reversal pattern that depicts a teacup with a handle on the right side. It's characterized by a rounded bottom followed by a minor pullback, forming the handle.
Analysis:
The previous trend for ITW was upward, which was interrupted by a consolidation phase that materialized as a Cup and Handle pattern, potentially indicating a continuation of the bullish trend. The so-called "lip" or the horizontal resistance of the pattern is at 248.68.
The price is well above the 200-day exponential moving average (EMA), underlining our bullish sentiment. As we observe the current candle's behavior, it appears that we might achieve a close above the lip. A successful candle closure above this resistance could pave the way for a long position.
Conclusion:
In the event of a successful breakout, the price target would be projected at 515.51, corresponding to an estimated rise of about 30%.
Remember, this analysis should be one component of a broader market research and risk management strategy, and it's not intended as direct trading advice.
If you found this analysis helpful, please consider liking, sharing, and following for more insights. Here's to successful trading!
Best regards,
Karim Subhieh
Disclaimer: This analysis is for educational purposes only and should not be considered financial advice. Always conduct your own research and consult with a financial advisor before making investment decisions.
ODFL WCA - Cup and HandleCompany: Old Dominion Freight Line, Inc.
Ticker: ODFL
Exchange: NASDAQ
Sector: Industrials
Introduction:
Today we are studying Old Dominion Freight Line, Inc. (ODFL) listed on the NASDAQ, a well-regarded player in the industrials sector. The weekly chart is indicating a possible bullish continuation based on a classic Cup and Handle pattern that has been forming over the past 608 days.
Cup and Handle Pattern:
The Cup and Handle is a bullish continuation or reversal pattern that mimics a teacup with a handle on the right side. It's defined by a rounded bottom, followed by a minor pullback that forms the handle.
Analysis:
The previous trend for ODFL was in an upward direction, which was interrupted by a consolidation phase that manifested as a Cup and Handle pattern, potentially indicating continuation of the bullish trend. The so-called "lip" or the horizontal resistance of the pattern is at 374.41.
The price is significantly above the 200-day exponential moving average (EMA), reinforcing the bullish sentiment. Notably, two weekly candles have successfully closed above the resistance level.
Conclusion:
In light of the successful close of the candles above the resistance, a long position might be considered. In the event of a successful bullish continuation, the price target is projected to be at 515.51, which corresponds to a potential rise of around 30%.
Remember, this analysis should be part of a broader market research and risk management strategy and is not direct trading advice.
If you found this analysis helpful, please consider liking, sharing, and following for more insights. Wishing you profitable trading!
Best regards,
Karim Subhieh
Disclaimer: This analysis is for educational purposes only and is not financial advice. Always conduct your own research and consult with a financial advisor before making investment decisions.
UPDATE: Afrimat on target to R66.75 and a new pattern arisesCup and Handle was the last pattern we used to make this prob prediction.
Lately, we have had the price fall into a Falling Flag consolidation formation.
And the price has already broken up and out of it.
This means, we can expect upside to continue and head to our first target of R66.75.
7>21>200
RSI>50
Target R66.75
ABOUT THE COMPANY
Afrimat Limited is a leading black empowered open pit mining company in South Africa.
Name:
Afrimat's name appears to be a combination of "Africa", reflecting its roots and primary operational region, and "mat", which could potentially be derived from "materials", representing the company's core business in supplying construction and industrial materials.
Founding:
Afrimat was founded in the early 1960s as the Lancaster Group, and was rebranded as Afrimat Limited in 2006.
Listing:
The company is listed on the Johannesburg Stock Exchange (JSE), and its listing took place in 2006.
Headquarters:
Afrimat's headquarters are situated in Durbanville, Cape Town, South Africa.
Operations:
Afrimat operates nationally in South Africa, and internationally in Namibia.
It provides a range of materials, including aggregates, industrial minerals, and commodities.
Aggregates:
The company started as a producer of building aggregates, but it has since diversified into a wide range of mining and related sectors.
Industrial Minerals:
Afrimat expanded into industrial minerals and now produces dolomite, limestone, silica, and others.
Leadership:
Andries van Heerden is the Chief Executive Officer (CEO) of Afrimat.
Dow Jones Industrials suddenly not looking too shabbyThe Dow Jones has been out on vacation for the first half of this year, not really participating in the melt-up, and instead, consolidating and working off that sharp rally from Q4 2022.
After all, it was one of the first indexes to bottom from the depths of the bear and start leading things higher.
But now after all of this sideways consolidation, it's starting to offer up a favorable reward-to-risk if it can build momentum over 34,500.
Perhaps a possible rotation into YTD leaders and back into industrials for the second half of the year? I'm not so sure about that yet, but it's a chart worth paying attention to.
Afrimat showing strong upside after C&H break up to R65.43Afrimat after a volatile period of ups and downs, seems to have chosen a direction.
It's been making higher lows, which has solidified the Cup and Handle formation.
We see indicators pointing up including:
7>21>200
RSI>50
My first target is to R65.43. This will give it enough room for upside and will give room in case the market jumps back down.
SMART MONEY CONCEPTS
Below the Handle and the Cup is clearly a Sell Side Liquidity Order Block.
With the wicks coming down and for the bodies closing near the highs, states that buying is stronger.
And so with SSL Smart Money buys into positions (and sweeps liquidity) from traders who are long (get stopped) and for short traders who enter into their trades.
ABOUT THE COMPANY
Afrimat Limited is a leading black empowered open pit mining company providing industrial minerals and construction materials in South Africa.
Founding: Afrimat was founded in 1965 as Prima Klipbrekers, primarily a mobile crushing company.
Name Origin: The name Afrimat is a combination of "Africa" and "Materials," indicating the company's African identity and its focus on materials.
Public Listing: Afrimat was listed on the Johannesburg Stock Exchange (JSE) in 2006.
Diversified Portfolio: Afrimat's portfolio of products includes crushed aggregates, limestone, silica, and other industrial minerals.
Geographic Reach: The company has operations across South Africa, has expanded into other African countries.
Acquisitions: Afrimat has grown through a series of strategic acquisitions, including Lancaster Quarries and the Glen Douglas dolomite mine.
Construction Materials: The company supplies construction materials, primarily concrete-based products, to the construction industry.
Industrial Minerals: Afrimat also has a strong presence in the industrial minerals sector, supplying materials for various industrial applications.