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CapitalHubs provides market insight trough regularly reviews of market sentiment. Analysis is based on methodology using breadth indicators of the broad market as well as determining key turning points of markets and commodities. Brake even point detection is based on important technical signals... More
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  • Google Seasonal Trading
    Spotting repeated patterns usually helps traders and analysts to take their decision. In this connection interesting pattern in Google shares has occurred last two years. It provides investors with profitable opportunities as important entry and exit levels are determined easily.

    Last two years the tech giant continued its double digit earnings growth. The revenues were stable without any seasonal deviations however the stock price trend does not coincided with earnings smooth trend. As seen on the chart the peak at beginning of 2010 has been followed by 6 month decline halted by bottom in July and second one in August. The August price floor confirmed trend reversal pattern which led to bullish trend for GOOG. It lasted until the beginning of 2011 then the pattern repeated. Next bottom was again in the summer months exact in the same period as previous year. The first appeared end of Jun and second end of September. Apparently summer months are the entry point for Google stock and the winter months (early January) prove to be exit ones.

    Google Entri And Exit Signals

    So far the cycle seems to repeat itself. The peak we have already seen in the start of 2012 was followed by downtrend. Shares dropped from $670 to the bottom of $564 (200 day moving average support) to trade at $605 now. If this seasonal pattern continues as previous two years we should be in the middle of the downtrend with indicative bottom at parallel channel support line, the $520-540 area.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: GOOG, trading, technical analysis
    Feb 16 7:53 AM | Link | Comment!
  • Should You Start Buying?
    It is clear that better buying falling stocks than skyrocketing, which is not to be mistaken with buying bad stocks. Opening position in oversold market is one of the keys for successful trading as you buy at discount. The fortune question is when is that time? Recent correction has uncovered numerous opportunities and still the markets are falling.

    Closer look at market breadth indicators could give us perception about current market mood. To measure current market state we use numbers of stocks in S&P index above its 50 day moving average. Latest pullback of the index drove percentage of stocks above mentioned level to 38.7%, lowest since early October. The threshold indicating buying signal is 30%. That level is -1 standard deviation from its mean and is considered to be extreme level.  As indicated on chart numbers under 30% coincide with correction bottoms.


    Quick view of the long trend indicator – S&P relative to its 200 day moving average suggest market is under the trend. Long term trend of the indicator itself is negative showing markets having bigger slumps under its 200 day MA.


    Fear gauge VIX is still leveraged now at 32. Readings above 30 indicate downturn and high volatility. Although market rallied and VIX touched 25 in late October current slump rises markets fear. In such conditions VIX levels above +1 standard deviation (31.58) is proven to be best time to load. 


    Definately market have been under pressure last month and prices now are attractive. Unfortunately things first go wrong before start going better and this is would be the case for next couple of days considering current negative market sentiment. However this is the time to be cautious in order to catch the following sweet rally.
    Tags: Market breadth, Moving average, Sentiment, Technical indicators, VIX
    Nov 30 5:08 AM | Link | Comment!
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