{"id":19907,"date":"2013-09-22T21:43:54","date_gmt":"2013-09-23T04:43:54","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=19907"},"modified":"2013-09-22T21:43:54","modified_gmt":"2013-09-23T04:43:54","slug":"chart-review-aapl-amzn-bby-skul-pcln-hpq-cat","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2013\/09\/22\/chart-review-aapl-amzn-bby-skul-pcln-hpq-cat\/","title":{"rendered":"Chart Review: AAPL Not Over Hump, AMZN Launches Again, BBY 3-Year Highs, SKUL Breakout, And More"},"content":{"rendered":"

This chart review covers the following stocks Apple (AAPL), Amazon.com (AMZN), Best Buy (BBY), Skull Candy (SKUL), Priceline.com (PCLN), Hewlett-Packard (HPQ), and Caterpillar (CAT).<\/p>\n

Apple (AAPL)<\/strong>
\nIn retrospect, last Monday’s plunge now looks like some kind of “manipulation.” The stock plunged 3.2% on no immediate news so the selling looked like follow-through to the previous week’s selling. I was quick to note the rarity of a Monday sell-off of such magnitude and projected AAPL would end the week another 2% or so lower<\/a>. Two days later the stock was rallying and hit a crossroads between the 50 and 200-day moving averages<\/a> (DMAs). By Friday, AAPL had essentially closed the week flat. A lot of outsized volatility and churn that turned out to be essentially meaningless overall!<\/p>\n

Now, the stock sits just below its 50DMA after failing to punch through the downtrending 20DMA. Friday also formed a bearish engulfing pattern. Despite all that, I bet on another up Monday given the high odds projected by my the Apple Trading Model<\/a> (ATM). (The model managed a 3-2 performance last week). I will now be posting the regression tress (classification) on Google drive for each set of historical data: 2010<\/a>, 2011<\/a>, 2012<\/a>, and 2013<\/a>. <\/p>\n

Apple closed for another down Friday. The loss deepened mainly thanks to a sudden plunge in the stock that occurred in the last 15 minutes of trading. I show the intraday chart below. Looks like AAPL started and ended the week with some suspicious selling pressure!<\/p>\n


\n
\"Apple<\/a>
Apple recovers from Monday’s selling but ends with a bearish technical pattern after failing to beat the current downtrend from the 20DMA<\/figcaption><\/figure><\/p>\n

\"Sellers<\/a>
Sellers rush for the exits at Friday’s close – options expiration games?<\/figcaption><\/figure>
\n<\/center><\/p>\n

Amazon.com (AMZN)<\/strong>
\nAMZN is honestly driving me crazy. It is bad enough that I cannot understand why it continues to hit all-time highs. Worse is the post-earnings churn that flips the stock from bullish to bearish and back to bullish trading, quite different than the more consistent patterns of earlier that formed the AMZN post-earnings model<\/a> (link takes you to a Google docs spreadsheet). My last trade was a put spread after AMZN flipped the bearish post-earnings signal<\/a>. The trade was good for about two weeks but the stock lost a maximum of about 3.5% before launching into its current recovery. It was not enough to take me out of my put spread profitably and I held on in vain for renewed selling pressure. The stock exhibited impressive relative strength to close the week at fresh all-time highs after bouncing perfectly off its 50DMA on Tuesday (Sept 17th).<\/p>\n


\n
\"A<\/a>
A fresh launch for Amazon.com<\/figcaption><\/figure>
\n<\/center><\/p>\n

Best Buy (BBY)<\/strong>
\nSpeaking of Amazon.com, remember how mobile price checks on Amazon.com’s site were supposed to be killing Best Buy’s business? Remember when BBY was supposedly a dying company that had only its founder and former CEO as a last desperate hope for survival through a private buyout? That all seems like a distant memory as BBY has managed to rally consistently since the 2012 Christmas holiday nadir. The stock is now up a mind-boggling 223% this year, and I do not see anyone talking about how bad BBY’s business is anymore. Amazing how sentiment can change so much faster than the real business. After the last earnings call, I decided to open a small short position. The valuation has “normalized” with a 14 forward P\/E and 3.7 P\/B ratio, both higher than Walmart (WMT). Only the P\/S ratio is still relatively small at 0.28. At current levels, BBY is a perfect hedge on “something” going wrong with the economy, market sentiment, the consumer\/retail, or any of a whole host of risk factors. Beyond that, I think sentiment will take a complete roundtrip sooner than later. It just needs a catalyst…<\/p>\n


\n
\"All<\/a>
All that doomsday talk about BBY was clearly wrong. How much longer until the market is “wrong” again on BBY?<\/figcaption><\/figure>
\n<\/center><\/p>\n

Skull Candy (SKUL)<\/strong>
\nYou can still find Skull Candy audio accessories in Best Buy, but the company sure seemed on its last threads after the last Christmas shopping season. I still owe readers a fresh review of the company to explain why I am STILL long. On Friday, hope sprung eternal with SKUL FINALLY breaking out of a six-month consolidation pattern on high volume. This is quite a bullish development and represents a strong potential for a bottom. Perhaps SKUL can rise like a Phoenix BBY-style. SKUL will have to have a decent Christmas shopping season to have any hope of sustaining a breakout move. Brace yourselves.<\/p>\n


\n
\"Are<\/a>
Are fortunes finally about to change for Skull Candy?!?<\/figcaption><\/figure>
\n<\/center><\/p>\n

Priceline.com (PCLN)<\/strong>
\nI am really just including PCLN because I like posting about a $1000 stock. Congrats to all the PCLN bulls that have made it to this major milestone! PCLN is up an incredible 62% this year and still looks unstoppable. The poor economic conditions in Europe are clearly not impacting enthusiasm for the stock.<\/p>\n


\n
\"The<\/a>
The amazing run continues for priceline.com<\/figcaption><\/figure>
\n<\/center><\/p>\n

Hewlett-Packard (HPQ)<\/strong>
\nHPQ has been working on its own incredible comeback from the ashes of PC-related angst. Until the company can come up with a non-PC answer to the rapid move to mobile devices, I cannot see this renaissance lasting much longer. Indeed, August earnings disappointed and now the stock is threatening a fresh break below its 200DMA. Such a breakdown would make HPQ a classic short. It is a company that will not get bought (anytime soon), so you can actually sleep OK holding it overnight. Aggressive shorts could even add to the position on a relief rally\/dead-cat bounce back to 50DMA resistance.<\/p>\n

A break below the 200DMA will add HPQ to the GROWING ranks of companies whose momentum points in the opposite direction of the general stock market<\/a>.<\/p>\n


\n
\"HPQ<\/a>
HPQ has suddenly become very gap happy – a sign of sentimental extremes rushing to entrances and exits<\/figcaption><\/figure>
\n<\/center><\/p>\n

Caterpillar (CAT)<\/strong>
\nI have long maintained that CAT is like the canary in the coal mine for the stock market. 2013 has proven to be quite an exception. CAT has traded down year-to-date for most of the year, missing huge on the great rally of 2013. Since trading down to flatline year-to-date in late February, CAT has traded in a wide range. Last week, the stock survived issuing guidance at the Citi Global Industrials Conference<\/a> and then more bearish talk from famous short-seller Jim Chanos<\/a> who has a large short position in CAT. But on Friday, out of seemingly nowhere, CAT plunged over 3.4%. Like AAPL, my first thought is options-related manipulation, but I do not have access to data to even make an educated guess. Overall, CAT is dead money until it either breaks out or breaks down. I am including it here just because Friday’s high-volume selling woke me up and caught my attention. I am watching ever more closely (especially since I still own a small amount of shares!).<\/p>\n


\n
\"A<\/a>
A sudden and deep plunge but CAT remains within a wide trading range<\/figcaption><\/figure><\/p>\n