Our analysis is based on long term trends, and if they are promissing, short term analysis. First, we view the
3 year weekly charts, followed by a 1 year daily chart. This analysis allows you to view the larger picture and trend,
rather than just looking at a short term prospective. This way, you can use short term volatilty to your advantage, if the
long term trend is positive.
You will see a summery of the stock we are analyzing, followed by the 3 year and 1 year charts. At the end, you will see a technical analysis summery. That's it,
to the point technical stock market analysis daily!
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Technical Analysis for February 17 2006
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| STOCK: RED HAT (RHAT) |
WEBSITE: www.redhat.com |
| CURRENT PRICE: 25.55 |
TREND: LONGER TERM DOWN |
| TARGET PRICE: N/A |
RECOMMENDATION: PASS |
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Long Term Chart (Weekly 3yr) - To view the bigger picture
Charts Courtesy of StockCharts.com
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Short Term Chart (Daily 1yr) - Where to take a position
Charts Courtesy of StockCharts.com
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This large Linux based operating system developer has been struggling ever since 2006 began. The stock had an impressive run, up 300% from the lows of the previous year, only meet resistance at its previous highs of about $30. On the 3 year chart, you can clearly see this level, and how the stock price has performed since. The MACD has also made a negative cross over here, and money flows have been heading down from here, suggesting less new money coming in, and those in the stock are taking profits. With these three factors (macd down, money flows down, and resistance met), things are not looking too positive here. On the short term chart, you can see the clear decline over the past several weeks, and this has caused the MACD to head straight down into negative territory, and the RSI has followed suite as well. You can also see support being broken recently, which shows a lack of buying interest in this stock. The only hope available here is if the MACD starts to head higher here, as the price declines, setting it up for a bullish divergence situation, and may cause a short term jump in the stock.
Bottom line, don’t buy based on hope, but on strong fundamentals or techicals; but we just don’t see any of the latter here.
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