Mens Warehouse Could Go Higher After Earnings Today

              Mens Warehouse (MW) is due to announce earnings Tuesday after the close. I believe that earnings will be better than expected and the stock will continue to go higher. My fundamental reasoning is due to the fact that they increased their dividend by 29% in January. When a company does this it is a clear indication that management expects earnings to grow for the foreseeable future. If earnings did in fact not increase, they would have to lower the dividend which is viewed as extremely bearish by investors. So, when a company raises the dividend, they should be very confident that they will be able to support that higher dividend payout.
              The technical reasons are this. The 13 day moving average has crossed, and is well above the 34 day moving average which is bullish for the stock. The oscillators are in over bought territory, but I believe they could remain over bought for a little while longer before selling off. The chart has resistance at the 26.50 mark from last October's highs. The stock should most likely retest these highs. MW has tested this level many times over the past two years. In October '09, August '09, September 08', April '08 and January '08. This area is significant because it is also about where the 200 day moving average is, so a mean reversion would be likely, as is with all stocks. A testing of the 200 day moving average would be 28.19 which is where I expect the stock to go in the near term. Currently the stock is trading at 24.84 so there is still some room to make a profit. If earnings do in fact exceed expectations, which is likely, expect the stock to break through resistance and form new highs.

Direct TV has broken long term resistance

Direct TV has broken its long term resistance point at 34 over the last two trading days. So, the 34 level should now act as a support area. It has also had a bullish crossing of the 13-34 day moving averages. These averages are used by traders to tell what type of trend a stock is in. When the 13 day is trading above the 34 day, it is bullish. When the 13 day is below the 34 day it is bearish. The crossing of the averages coupled with the recent break in resistance is good news for those bullish on the stock. The next resistance point will be near the 37.50 mark. It has not reached that point since mid 2000. So, I believe this can be taken advantage of in a few ways. One is to buy the stock out right, of course. The other two strategies involve the use of options. One way is to buy a naked call on the stock at the 35 strike price with an expiration at least three months out. If you want to reduce your risk, you can purchase a spread. To do this you would sell a put option near the current price, maybe the 33 strike to give some room to the downside, and buy a call at the 35 strike. This will not only reduce your costs by selling the put, but also reduce your risk.

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Welcome to Technical Analysis charting for stocks and indexes. This site provides technical analysis for beginners and advanced investors alike. Technical analysis can help you make money by analyzing the charts of stocks you own or wish to trade. Technical analysis is a great investing tool to learn and use and can help you make money and keep your current investments profitable and secure. If you have any questions please feel free to email me.

Gold Still Selling Off

GLD is an index that tracks the movement of gold. Gold has been selling off since the beginning of the year and it looks to continue that trend. At the beginning of the year gold was trading at record highs, as was GLD at 117.5 range. Since then it has pulled back to the 109 mark. GLD looks to be in a definite down trend/correction and looks as though it has more room to go. With the recent rate hike, making the dollar more attractive to foreign investors, expect money to continue to flow out of gold. I believe money can be made buy purchasing puts against the GLD or shorting the index. In the next month or two one could expect a mean reversion back to the 200 day moving average, which would be around the 100 mark. There's significant room for a gain from a short position.

Dow Due For Another Pullback

According to the nine month chart, I believe the Dow is due for a mild correction. The reasons behind this hypothesis are as follows. For starters, the news of the Fed raising the spread between the discount rate and the federal funds rate could trigger selling in the broad market. This is because money has just become more expensive to borrow for troubled firms. This, along with the fact that the Fed has sworn off its quantitative easing program, will lead traders to believe that firms are now on their own financially. Secondly, the chart is in a relatively overbought state. The technicals just don't support a further rally.

An in depth look at the technicals shows that the recent rally, started in early February, may be losing steam. The volume has been sluggish while the chart has been moving upward. A trend is less convincing when volume is not rising with the stock/index.  Volume has actually decreased consistently while the index has been rising. 

Next, some of the oscillators are in overbought territory with the index nowhere near to making a new peak, which would happen above the 107 mark. For an uptrend to continue a pattern of higher highs and higher lows needs to be present. It is also coming up on resistance at a long term trend line. The trend line also happens to be at a fibonacci retracement of 61.8% of the previous trend. This should reinforce the resistance area at 104.29

All that being said, one could expect a pullback to the 102.40 level within the next week.