Real Money Charts: RIG, PTEN, CBG, MBT, PAL and NETL (March 5, 2008)
Here are the charts for Wednesday’s article on Real Money: RIG, PTEN, CBG, MBT, PAL and NETL.
RIG peaked in late December. After falling 20% to support at $120, the stock has printed a lower high. As I see RIG right now, it just looks like a risky buy right now. After all, if the 50-day moving average doesn’t hold (and it sure didn’t hold in mid-January), then the stock can fall another $15 before testing support. I’d just be patient and hope for more selling. Then I’d buy nearer support.
PTEN broke above established resistance at $21 and remains within a solid uptrend. The stock has pulled back for 3 straight days and is poised for a bit of a snapback rally. But, like RIG, the problem with buying now is that it’s just too darned far above support. That makes buying it a high risk proposition.
CBG had been falling in a very volatile series of lower highs and lows…with the 50-day moving average providing the ceiling on each move. But beginning at the mid-January low, the bulls took this stock up about 40% to test $22. The recent pullback is right at the 50-day moving average, reversing the dynamic from prior resistance to current support. If the stock falls below yesterday’s intraday low of $18.90, I’d consider selling. But if the stock instead moves back above $20, then I’d be a buyer and anticipate at least a 10% move to test the previous high of $22.
MBT had been a stellar performer until 2008 rolled around. Since then, the stock has really struggled and has now established resistance at about $88. With the 50-day moving average now heading south, the bulls need to prove themselves. If you’re looking to buy, I’d consider waiting for a move back above the 50-day moving average. Until that happens, just let the phone keep ringing without picking it up.
PAL has been a rocket ship since blasting off in early January. But the stock is finally resting a bit on declining volume. With a tight series of lower highs and higher lows, this stock is poised to break out — one way or the other. A trend is intact until proven otherwise, so I’d be poised to buy on any breakout. But if you’re riding some nice profits, protect them with a stop just below support.
NETL is a semiconductor company. That should say enough about what to do with this stock. Generally speaking, technology is just not where you want to be right now. But you can see how the stock is continuing to test the $21 level, and is making lower highs between tests. If the bulls can’t push this stock away from support pretty quickly, I’d just move on. And if current support breaks down altogether, I’d sell immediately.
Be careful out there.
Real Money