Todays Big Stock: ICICI Bank Limited Common Stock (NYSE: IBN)

ICICI Bank Limited is a banking company. ICICI, together with its subsidiaries, joint ventures and associates, is a diversified financial services group providing a range of banking and financial services, including commercial banking, retail banking, project and corporate finance, working capital finance, insurance, venture capital and private equity, investment banking, broking and treasury products and services. It operates under four segments: retail banking, wholesale banking, treasury and other banking. Retail banking includes exposures, which satisfy the four criteria of orientation, product, granularity and low value of individual exposures for retail exposures. Wholesale banking includes all advances to trusts, partnership firms, companies and statutory bodies, which are not included under retail banking. Treasury includes the entire investment portfolio of ICICI. Other banking includes hire purchase and leasing operations and other items.

Please take a look at the 1 yr. chart of IBN (ICICI Bank Limited) that I have shown below with my added notations:

IBN has formed a nice down-channel chart pattern over the last (9) months. A channel is simply formed through the combination of a trend line support that runs parallel to a trend line resistance.  When it comes to trend lines, remember that any (2) points can start a trend line, but a 3rd or more confirms it. You can see that IBN has (4) points of channel resistance (brown) and (5) points of channel support (navy).  Always remember that after the 2nd test of each of these trend lines, the market decided they were important trend lines, not me.  Following the IBN channel can provide you with both long and short trading opportunities.

Also, please note the 50% mark (green) I have shown that runs through the middle of the channel. Notice how commonly that mark acts as support and/or resistance?

 

The Tale of the Tape: IBN has formed a common pattern know as a channel, in this case, a down channel. A long trade can be entered on a pullback to the channel support, which at this point seems to be around $22-23, or on a breakout through the channel resistance, currently sitting at $34. Short trades could also be placed at channel resistance OR if IBN were to break below the channel support. Do not hesitate to trade or add to positions at or on breaks of the 50% mark as well.

 

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

 

Good luck!

Christian Tharp, CMT

 

 

Overseas Shipholding Group, Inc (NYSE: OSG)

With the stock market having moved mostly higher over the past few months, most stocks have moved higher with the overall market. Although there aren’t too many stocks that haven’t rallied to some extent, there are some stocks still maintaining an overall trend lower. Stocks that have maintained their trend lower through the current market rally could be the ones that sell-off the most if the market eventually does move lower again. One such stock that may fit that description would be that of Overseas Shipholding Group, Inc.

Overseas Shipholding Group, Inc. is a tanker company engaged primarily in the ocean transportation of crude oil and petroleum products. As of December 31, 2010, it owned or operated a modern fleet of 111 vessels of which 88 vessels operated in the international market and 23 operated in the U.S. Flag market. OSG’s new building program of owned and chartered-in vessels totaled 11 International and U.S. Flag vessels, bringing the company’s total owned, operated and new build fleet to 122 vessels. The company’s vessel operation consists of: crude oil, refined petroleum products, and U.S. Flag.

To review Overseas Shipholding’s stock, please take a look at the 1-year chart of OSG (Overseas Shipholding Group, Inc.) below with my added notations:

 

What is painfully clear from the chart above is that OSG just can’t get up off the mat. Regardless of what the market has done in 2011, OSG has just continued to move lower. Even though the market is well off it’s 2011 lows, OSG just keeps hitting new ones. Most recently, OSG broke both its $15 (green) and $12 (navy) supports and is now trying to hold $10 (purple). If OSG can continue to move a little higher, as it did this past week, I’d expect the old $12 support to become a $12 resistance just like the $15 level did. Until the stock finally breaks higher vs. lower, I would trade it accordingly.

The Tale of the Tape: Regardless of what the overall stock market has done, OSG has been breaking lower all year. Traders will want to trade with this trend until the trend changes. If the stock rallies back up to $12, or breaks back below $10, traders would want enter a short trade. However, if the stock can break back above $12, that may be the initial sign that the downtrend is ending and traders may want to enter a long position on the stock, in expectation of an initial run to $15, with a stop set under that level. Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

 

Good luck!

Christian Tharp, CMT

Todays Big Stock: TD Ameritrade Holding Corporati (NasdaqGS: AMTD)

As I often state in my newsletters, it never hurts to have stocks in your watch list that present you with trading opportunities regardless of what direction the market heads. One such stock that fits the description of giving you a trade either way would be that of TD Ameritrade Holding Corporation.

TD Ameritrade Holding Corporation is a provider of securities brokerage services and technology-based financial services to retail investors, traders and independent registered investment advisors. TD Ameritrade provides services through the Internet, a national branch network and relationships with RIA’s (registered investment advisors).

To review TD Ameritrade’s stock, please take a look at the 1-year chart of AMTD (TD Ameritrade Holding Corporation) below with my added notations:

AMTD has created a couple of short-term price levels over the last (2) months. First, AMTD has formed a clear support level at $15 (green). In addition, the stock has also been forming a down trending resistance level (red), which it has now tested (4) different times. These two levels combined have AMTD stuck within a common chart pattern known as a Descending Triangle that will eventually have to break one way or another.

The Tale of the Tape: AMTD is currently stuck between two very important levels for the stock: The down trending resistance and the $15 support. A long trade could be made on a break above the down trending resistance with a stop placed under the breakout point. On the other side, you could enter a short trade on AMTD if the stock breaks below the $15 support level. In that case, a stop should be placed above the level of entry.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!
Christian Tharp, CMT

Todays Big Stock: PHH Corp Common Stock (NYSE: PHH)

Trading in the stock market can sometimes be complicated. It can also be confusing. It can be challenging to know what trade to make and when to make it. However, there are those trading opportunities that are clear and obvious. Usually, the “keep it simple stupid” trades tend to be the best. Although “simple” doesn’t mean that the trade will work out in your favor, at least you knew it was the right trade at that time. A stock that might have made a move that fits that description would be that of PHH Corporation.

PHH Corporation is an outsource provider of mortgage and fleet management services. PHH operates in three segments: Mortgage Production, Mortgage Servicing and Fleet Management Services. It provides mortgage-banking services to a range of clients, including financial institutions and real estate brokers, throughout the United States. PHH’s mortgage banking activities include originating, purchasing, selling and servicing mortgage loans through its wholly owned subsidiary, PHH Mortgage Corporation and its subsidiaries. It provides commercial fleet management services to corporate clients and government agencies throughout the United States and Canada through its wholly owned subsidiary, PHH Vehicle Management Services Group, LLC.

Please take a look at the 1-year chart of PHH (PHH Corporation) below with my added notations:

PHH has been holding a very important level of support at $14 (navy) for the last (5) months. No matter what the market has or has not done this year, PHH has not broken below $14 . . . until last week.  Something seems to have changed with PHH. It has always held $14, and then the level broke. It’s simple. Stocks that break significant resistance usually move higher and stocks that break significant support tend to move lower.

The Tale of the Tape: PHH had a very important support at $14 throughout the last several months. Last week the stock broke below that $14 level, thus should be moving lower. The most ideal entry to limit risk would be a short position on a rally back up to $14, if that happens, with a stop placed above that level. A break above $14 would negate the forecast for a move lower and a long position could be considered.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!
Christian Tharp, CMT

Todays Big Stock: Arcelor Mittal NY Registry Shar (NYSE: MT)

Important price levels on stocks aren’t perfect. Stocks can find support and/or resistance anywhere and at any price. However, when writing these articles, I highlight only the levels that appear MORE important than others. Although anything can happen between, above or below these levels, it is at the important ones where the trades should be more probable.

ArcelorMittal is a global steel producer. During the year 2010, ArcelorMittal had steel shipments of approximately 85 million tons and crude steel production of approximately 90.6 million tons. ArcelorMittal produces a range of finished, semi-finished products and flat products including sheet and plate, long products, including bars, rods and structural shapes, and stainless steel products. The company operates in five segments: Flat Carbon Americas; Flat Carbon Europe; Long Carbon Americas and Europe; Asia, Africa and Commonwealth of Independent States, and Distribution Solutions.

Before discussing the potential trading opportunities with MT (ArcelorMittal), please review the 1 yr. chart of MT that I have outlined below, with my added notations:

MT has created a very important support level at $15 (navy) over the last 3 months. In the process, the stock has commonly found resistance at $20 (red). Even though the stock has had other support and resistance points, for example at $17 and $18 (purple), the more important levels have been at $15 and $20. MT is currently trading in between those levels and now appears to be on its way back up to the $20 level.

The Tale of the Tape: MT is trading between (2) important price levels at $15 and $20. A rise to the $20 resistance would be a great opportunity to enter a short trade, while a break above that $20 could be a nice long trade. A trader could also enter a long trade on a pull back down to the $15 support, or a short trade on a break below the $15. Everything else in between is noise at this point.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!
Christian Tharp, CMT