Thursday, March 09, 2006

HANS Earnings & $UTIL Breakdown

First off, looks like I blew the HANS short recommendation. This company came out with stellar earnings this morning, and pre-market bidding looks like it'll open at a new lifetime high. Ah, well; can't win 'em all, folks. The key is that we had a stop in place, we take the loss, and we move on. With a stock like this, it's hard to know if it'll ever stop rising!

In retrospect, the problem with my analysis on HANS was the lack of analysis. This chart was not in any particular technical formation per se. I made the worst of errors of charting - projecting what I thought might happen based on a very small set of supporting data (in this instance, what looked like a double top). So, again, this was not a real pattern at all (such as a wedge or a saucer). So I'm disappointed in myself in being so hasty; that was a lousy analysis and a lousy recommendation.

Let's look at something which does have a good pattern and is probably more important to the market in general - the Dow Utilities. As you can see from the graph below, there are two very bearish situations with this chart. First, the very large ascending trendline going back over three years was broken a number of weeks ago. Second, there is a very plain head & shoulders pattern which I've highlighted here for you. So we've got a bit of a one-two punch.


The likely subsequent drop in this market would portend even higher interest rates as well as additional weakness in the market overall.

5 comments:

Tim Knight said...

Well, I disagree, but I think this is a comment worthy of a posting of its own. I'll probably make it my next one, since I think this is a healthy debate.

Matthew Curran said...

Tim,
Thanks for your candid response to your own suggestion. I almost wrote you about that yesterday but didn't. I thought it was a little dicey to picking a top on on a stock with such strong upward movement and no clear and obvious break of that. But I didn't because based on the potential double top and the tight entry point close to the stop loss, it seems like a well calculated chance, just like any other trade. Why does the potential double top not count, in your mind, as a viable pattern here?
Many thanks.

walter said...

are we so sure yet that HANS is not a short? seems like that battle is being waged as we speak.

shorting before today may be a good call - but its definitely early

if HANS can only go up from here, or i am missing something, let me know.

one other comment - why is commenting here so difficult? you have to have a username and password? full lock down? luckily i had one, but if i didnt i dont think i would create one just to post a "comment"

thanks!
nice blog
i read for short ideas

walter said...

why was shorting HANS a mistake?

it closed in the 97s?

any fundamentalist want to answer that?

walter said...

its hard to get a dialogue going on here because everything has to be approved by the blogs author...

tim, if you dont like something you can just take if off after the fact, right?

its like i post, and have to wait too long for it to actuall show up...

anyway, keep up tbhe good work