XOM III

Here's another chart that contrasts fundamental trend lines which defined the stock over the past 20 years.



This suggests that a) while trend reversal is underway, consistently strong pps growth may still be some time away, and b) once the new uptrend strengthens it may be stronger than ever, capitalizing on the exponential nature of year-over-year returns.

CTFO III

I've tried to visualize the stock's ambivalence between solid growth stock and super-performer by drawing to channels based on the past year's developments. Note that the parallel nature of the channels means that as the over stock price increases percentage movements within the channels decrease. And despite the V style nature of the two channels movements between the channels are not entirely proportional either (percentage-wise, e.g. from $4 in June to $8 in September equals from $8 to $12 in the new year).



What I get from this chart, then, are some good guidelines for assessing the stock's price developments. The longer it takes to break out of the black channel the less likely it becomes to be followed by a move into the red channel. I expect this move to take place in January, and if it fails to occur, the dynamic of this stock may be much more conservative than I originally anticipated (mid-20s by summer '10).

XOM II

As explained in my previous post on this stock, there has been considerable sideways movement under continued strong earnings and so the value catch up component alone is a strong argument in favour of this stock. In addition, with the acquisition of a major domestic natural gas stake management exhibits a strong grasp on future opportunities and a willingness to adjust their operational practices.



From a charting perspective you'll see that comparable to the retrace following the burst .com bubble (of about 30%) we are currently adjusting for the most recent bubble. In fact after an exact retrace to .68 of the all time high we have refound our footing along the long-term trend line that seems to carry the stock's fundamental value. Based on this view the stock is healthy, neither severely oversold (which would suggest operational hurdles of some sort) nor overbought. It will, however, need to prove itself on top of this trend line to continue to deliver the kind of strong performance it has shown for most of this decade, otherwise the languish it saw early on in the decade will ensue once again. Since spring is historically a strong time for the stock watch for it to establish itself above the trend.

CTFO II

I'm imagining the current run (since July) as a rerun of what we saw starting in March, where we moved through a Fibonacci trading range only to hit the ceiling and retrace before eventually following through in said month of July. Such a move has taken place in very alike fashion since, with the only difference being the more extreme, singular breakout through the ceiling of the trading range followed by an only seemingly stronger pullback (stronger in relation to the extreme high, yet equivalent, ~30%, in relation to the respective ceiling).

In the graph below I've added a conservative trend channel based on parallel lines to the most recent lows. This forms what I would expect to be the moving resistance line to what in the future will undoubtedly remain a very dynamic stock. Keep an eye on the 7.70s which must hold to continue the upward trend, something that there is no doubt about, as this stock is set to go double digits and stay there.

CEMJQ

Analysis here differs from the trend model that applies to the straightforward growth stories of consistently profitable corporations. In navigating the Chapter 11 reorganization process valuation becomes a particularly speculative enterprise, resulting in significant disruptions of the general growth trend, as market participants are driven by accelerated gain/loss expectations and the according profit-taking/loss-mitigating moves.

The December low at .46, following new post-BK highs near 1.50, is therefore easily recognized as in line with a conservative trend connecting May and July lows. This I take to be the floor in a growth cone that has as its ceiling the August U bottom, therefore discounting the significance of the last move which pushed this stock over a dollar once again.


For investors stepping in at this point, therefore, two alternative considerations hold: a) In a worst case scenario (with the long-term trend captured by the bottom of the cone) this stock may well trade around a dollar for some time to come (basically throughout the spring), or b) in the "top of the cone" scenario we are right on trend and will probably overshoot for a while before retracing. Important pointers will come from the stock's behavior around the Fibonacci-derived 1.17 trading level. Ideal from a stable trend perspective would be a steady progression and consolidation around that level, which would encourage a strong push toward the next significant level at 1.60. Instread, you will likely see a repetition of the prior post-BK high move, followed by renewed correction towards the channel defined by the conservative valuation cone.

CTFO

Looking at the 1+year it seems like if we treat the $2.70 range as point of initial departure we get a clean cut Fibonacci-based step pattern (to $3.70 to $5.15 to $7.15 to $9.85). We are currently trading within this last range, after the last upward move to the next level at $13.65 was cut short, which compares to the period from May to July when we sat between the high 3s and low 5s.

Due to the considerable consolidation amid continued positive news there is obviously no reason why this shouldn't continue along the established pattern. Look for the breakout through the top of the trading range and into the teens next month, from which we should move to around 14 before limited retracing in anticipation of the yearly report. Thereafter expect this to move in steps through the mid-term ceiling around $26 towards the end of the summer.

XOM

I've been looking at the long-term chart and the current situation, with the stock essentially being stuck in a relatively stable trading range, is very much like after the correction following the .com bust in 2000. After consolidation the stock eventually moved 90 % in about two years (2003-2005), and another 90% (250% overall) in the next two years. Since this stock is a spring stock (making its moves early in the year) you can definitely expect this to show some legs next year -- once it moves it's also likely to happen faster than previously given the more dynamic market environment. What is more, beyond the plain trend assumptions here, the company's done some restructuring including an acquisition of a major natural gas provider, which puts it in a good position for the expected boom in this field. By the way, they also do interesting research in biofuels from algae, which is an approach which a lot of green start ups are also pursuing... so at least they're not purely evil :-)

Not a buyer, but definitely think this is a safe play and good growth opportunity.

IBM

IBM is harder to fit into trend assessments because of its special role as a long-term success in the IT field which as a whole has seen so many busts; yet I believe that this stock is finally ready to move on its own right, shedding the long-term trading range between, roughly, $70 and $130. In fact, the stock has been trading much like in the period between '91 and '96, which coincidentally was during the time that Windows/DOS-based IBM PCs made their way out of specialised computing labs into the broad consumer market.

Unfortunately, at this point I don't know enough about their current business to tell whether they are at a similar stage now with their focus on business intelligence and embedded technology. Basically, by holding this stock you are betting that this time around (as opposed to the .com period) there is actual technology and business adoption driving their stock movement; something which last was the case in the 90s with widespread Windows adoption on their platforms. If this is the case, expect the stock to narrow decisively between $128 and $144 before breaking through that level and establishing itself in the top half of the 100s over the next two years. An important development in this context is the advancement of optical computing; if there are significant breakthroughs this would obviously mean a big push for IT in general and business communications in particular (computing at optical speeds means massively improved security and hence potential for business to take place over larger and more complex networks).

So in conclusion, until I see optical computing as a serious possibility on the horizon I'm not a buyer. If anyone is reading this, I'm currently only following LWLG regarding optical computing developments. Maybe you can let me know where ale to look for its advancements.