• Pfizer rebounded from its 52-week low of US$11.62 to test the 38% FR levels (measuring from a high of US$19.39 and a low of US$11.62). Although a cut above its 30-day SMA is positive, it appears that sellers are queuing to sell at US$14.60 (38% FR). A short term consolidation is likely to take place before renewed buying interest lifted the stock towards the 50% FR at US$15.50. There could also be a minor resistance at US$15.00.
• Technical indicators are showing signs of exhaustion, supporting the change in momentum towards the bears. MACD is losing momentum and may dip into negative while RSI has also turned south.
• There is a strong possibility that the stock could ease towards the 23.6% FR at US$13.45, which is also near to its 30-day SMA. Aggressive investors looking to buy may want to wait for a pullback. Cut losses however if prices fall below US$12.94.
JPMorgan Chase & Co. (JPM US; US$27.40) – SELL
• The stock has rebounded sharply from a low of US$14.96 in early March to penetrate above its 30-day SMA. Despite Friday’s pullback, the stock is likely to maintain its short term uptrend channel, though the congestion zone over the past one week may suggest that a correction is forthcoming. The neutralisation process would underpin future strength with next resistance near US$32.25.
• The daily MACD indicator is showing an easing trend while RSI has also hooks down. It may be best to sell into strength for now as buying begins to lose momentum. We expect further retracement on its share prices.
• We envisage investors to buy only during technical pullbacks as the stock has climbed >90% over the past three weeks. Buying between its 38% FR at US$23.60 and its 30-day SMA at US$22.50 is a low risk buy. Put a stop at US$22.00 in case things turn out badly.
AT&T Inc (T US; US$26.00) – BUY
• AT&T’s strong rebound has pushed the stock above its 23.6% FR levels and also its 30-day SMA but buying began losing momentum. It did not ride the wave to test the next key resistance, which is also the 38% FR at US$28.46. This week is crucial as sellers may push its share price below US$25.50 to conclude its recent upward trend.
• If the stock breaks below US$25.50, the next key support is at US$24.10 which is also its 30-day SMA. MACD momentum is waning while RSI is also heading southbound, reinforcing our short term negative view on the stock.
• On the other hand, if the US25.50 support holds, there is a marginal chance for AT&T to resume it uptrend rally to test the US$28.46 resistance. Breaking above the 38% FR would see the stock rising towards next upside target atUS$29.46.
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