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Thursday, September 18, 2008 

The worst financial crisis since the Great Depression

Already considered by many analysts the worst financial crisis since the Great Depression, the actual financial crises are dramatically shaking markets worldwide. The financial crisis that began 13 months ago is pushing stocks to irrational historical lows, including healthy companies that are now seeing company value in a bad situation. The panic selling has been installed in investor minds, therefore the word “sell” appears from everywhere on the floors of Wall Street, everybody is selling everything, no matter if the company is in a good financial health or not, the time is to sell and they sell, it's the contagious of the environment. Some healthy companies that I’m still holding in my portfolio have been also battered for this uncertainty, but fortunately for me this fall hasn’t been so stronger as others companies in the same sector. In fact, at the present time no one is immune to be hit by falling knives, the sentiment is really ugly and cash is King. From my standpoint, I believe that we are not so far from the bottom of this market, currently there are many companies already trading below its book value, creating historical good opportunities of investment for long players. Investors with patience will be soon rewarded. Time changes in a matter of seconds and FED, BCE and many others are active on the ground injecting billions of dollars to stop a deeper crisis in the entire financial system. Stay calm and avoid entry in panic. As I said before cash is King in times like this. Please, find below more trade Ideas for Friday.

Chart courtesy of stockcharts ( click to enlarge )

YHOO seems to have broken out of the downtrend with $20 as resistance. Target price of this formation would be above $24. Volume on breakout is about 36 million of shares, volume on the last trading days was 30 million. If on Friday the stock was bought up with volume of above 30 million, this would be a confirmation of continued bullishness. As of current, MACD is indicating a bullish signal as it is above the sell line. In addition as stock is just back above 50 day moving average and ROC has just rose above oversold level, now is probably a great time to buy the stock.

Chart courtesy of stockcharts ( click to enlarge )

CIEN - Chart is showing a Bullish MACD divergence. Positive divergence occurs when MACD advances upwards at a time when the price is still in a down trend. MACD forms a sequence of higher lows (each low higher than the previous day or period). A close above today's high will cause an inversion which will lead the stock higher. In addition, the stock is extremely oversold at this point that the conditions are almost perfect for another large scale counter trend rally to develop, so don't be caught if you see this one begin. Stay tuned on CIEN.

Disclaimer : Trading stocks involves risk, this information should not be viewed as trading recommendations.The charts provided here are not meant for investment purposes and only serve as technical examples.

That's All. See you tomorrow !!!


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About Me

  • I'm a 48 year old Independent Trader using proprietary technical analysis with more than 20 years experience of investing in the US stock markets. I started this blog in 2006 simply as a way to share my thoughts about capital, risk management, and trading. My blog contains only my personal opinion and is provided for informational purposes only.

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