-- Posted Thursday, 18 January 2007 | Digg This Article | Source: GoldSeek.com
Rick’s Picks
Thursday, January 18, 2007
“Phenomenally accurate forecasts”
After watching Jim Cramer’s “Mad Money” on CNBC yesterday for the first time, I’m forced to admit that he’s not all blather. Actually, it was the first time I’ve tuned to Cramer with the sound on, although I’ve watched him soundlessly many times on the hermetically sealed sauna-room TV at the local gym. Even with the sound off, you’d swear you can hear the guy, since practically every word he utters is punctuated by the kind of body language and wild-eyed emphasis that makes us all lip readers.
His latest rant was a warning to bail out of tech stocks now, since the calendar all but decrees that most of them will be falling between now and August. Could smart investing be that simple? Perhaps, at least in this case. “Follow the herd” on this one, Cramer advised. I don’t have a copy of Yale Hirsch’s Stock Trader’s Almanac handy to affirm the wisdom of this advice, but it seems well in line with my own forecast for a key tech bellwether, Intel. Here is what I wrote in Wednesday’s Touts: There's a compelling Hidden Pivot rally target at 23.50 that we'll attempt to short through tomorrow. Bid for two Feb 22.50 puts (NQNX) using whatever bid is reflected for them when the underlying stock first touches 23.45 on the way up. This is a day order, no stop-loss. The target comes from the daily chart, where A=19.03 (9/25/06) and B=22.50 (11/17).
In the event, we were a day late, since Intel opened on a gap lower due to disappointing earnings. The failure of the stock to surpass November’s key high, thereby creating a fresh, bullish impulse leg on the daily chart, will likely mark the end of the bull run begun last June. As Intel goes, so go the tech stocks? Well, not quite, according to Cramer. He thinks that five stocks are going to buck the trend: Microsoft, Apple, Hewlett Packard, Google and Cisco. It’s hard to argue with his selections, since all look great on their respective daily charts. From a Hidden Pivot perspective as well, they are unassailable, each being in an uptrend with a bullish target and no technical justification for inferring it will necessarily be the last. If I had to pick one from the bunch that might disappoint, it would be Cisco, whose daily chart is shown above. If the current selloff should touch 25.58, surpassing the two prior lows I’ve highlighted, that would create the kind of bearish impulse leg that I might worry about. Even if Jim Cramer would not.
***
London Seminar
A Hidden Pivot seminar in London appears likely, judging from the strong initial response. If you’re interested in attending a two-day class there, probably sometime in the spring of 2007, please let me know via e-mail, including your contact information. The cost would be $1,500 USD.
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