Skip to content
Tags

, , , ,

Update on running positions

June 11, 2012

11 June

The Coca-Cola Femsa (KOF) v iShares Mexico (EWW) trade continued to move higher.

Kofewwweekly110612

That was until 04 June. It had a divergence on the 14 day RSI, a reason to take more profit.

Kofewwdaily110612

I don’t use daily RSI divergences to enter positions, only to take profit or as a reason to hold off from entering as position. This might continue higher over the coming months but it might not. I’ve identified the entry, now trade as you see fit.

The SPDR Health Care (XLV) v Teva Pharmaceuticals (TEVA) has shown some profit since entry. Not as prolific as the KOF trade. Again, this might continue higher in the medium term but you should have taken some profit and stop to break even on this by now.

Xlvteva_daily_110612

This is a long U.S. short foreign market trade. I am looking at possibilities of opposite trades and by that logic, you might want to take remaining profit on this.

Of the four Bollinger band contractions shown on 14 May, two have failed to give an entry signal (CVD and CSX). One (Novartis) gave its signal and then did not follow through. I said on 28 May that this might be best left.

U.S. Steel (X) continued its breakdown.

X_boll_bands_rtt_110612

I had given some second thoughts due to the relative strength nearing a bullish weekly RSI divergence. That divergence is now in place properly.

U.S. Steel v S&P 500 Index

X_rel_spx_weekly_110612

So there is some contradiction there that I am aware of. Stocks that lag the market for months, breaking down from contracted Bollinger bands are also those that have weak relative strength, possibly oversold on relative strength, maybe even with a bullish RSI divergence.

There is no single answer to which of these two factors becomes the most important, it all depends on other market factors at the time.

From → List of posts

Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: