The document provides a review of various investment positions and charts. It summarizes the current support and resistance levels as well as overall trends for 16 different investments including AGG, BKLN, BWX, C, CBPO, FLTX, INDA, SNH, SPY, VGK, VPL, VWO, and WFM. It also reviews 9 investments where stops were triggered or the position was exited, noting that these stops helped avoid potential losses of 3-14% since those times.

1. Mike Zaccardi, CMT
Technical Analyst
mikeczaccardi@gmail.com
December 13, 2014 Portfolio Chartbook
Winter Break Review (alphabetical order by ticker)
As we break for the holidays, let’s take a moment to review our open positions to see how the charts are looking. I encourage (urge) everyone to advise me on if you think stops/limits aren’t about at the level you want – there is always another layer of support or resistance somewhere, and I don’t have a crystal ball on all charts.
I believe the main purpose of technical analysis is risk management. We have actually done extremely well managing potential risk, as you can find in Part II of The Chartbook, which showcases how we avoided potential huge losses.
Part I
AGG declined off of the blowoff top in mid-October as the 10-year yield railed from 1.86 to 2.40. The 10-year yield was range bound between 2.30-2.40 before breaking beneath that range and setting up a rally for AGG. While the bid for bonds appears quite strong, AGG looks to find resistance just shy of 111. Support is found at the base of the rising trend channel. AGG has returned more than 6% YTD. The overall yield curve has seen massive flattening in recent months as the 30yr yield sits near multi-year lows and the 2yr is near multi-year highs.

2. BKLN has seen massive selling pressure in December as high yield has been getting crushed. BKLN is down 7 days in a row on rather heavy volume. Support is found at the October low at 23.81. A doji candlestick on Friday indicates indecision, or a pause, in the recent trend. RSI appears oversold, however stocks can remain oversold (or overbought) for extended periods of time. There is a gap that may get filled just above the current price. Resistance is found at the downtrend resistance line off the September and November peaks.

3. BWX has rallied off the early December lows as the USD has paused in its surge higher and global yields continue to depress. Resistance is found at the falling 50-day moving average and downward sloping resistance line off the August and October peaks. A falling 200dma indicates weakness in the longer-term trend after a positive first half of the year. RSI needs to re-capture the 60 level to show improving momentum readings. (Chart is nearly the same as IBND, so I will not chart IBND).

4. C broke out to new multi-year highs in early December, spiking to near 57. Resistance was found at the rising trend line off the June and September peaks. C has fallen beneath the nearer-term cup and handle pattern formed from September through November. Support is found at the base of the ‘handle’ and 50-dma near $53. Resistance is found at the rising trend line and prior cup line near 54. An upward sloping 200dma indicates an improvement in the longer-term trend as the 200dma has been negatively sloped for much of 2014. RSI has fallen to the base of the ‘bullish’ zone near 40. Stop 52.40

5. CBPO has slowly faded off the all-time highs near 70 in recent days. Support is near 65 and resistance is found in the very near term at the down sloping trend line off the 70 level. Notice how CBPO tends to consolidate for several weeks before making a substantial move (as Chris noted in class recently). Intermediate term resistance is found at the top end of the positive trend channel, support at the base. 15% mental stop would trigger near 60. Sell limit 75.

6. FLTX remains in a general uptrend from the summer. Resistance is found at the upper end of the trend channel, support at the base. The 200dma has flattened, however price will have to improve to turn it positive. There is an unresolved gap near 32, however the stock has shown very nice relative strength to overall equity markets in the last week – particularly international markets. This stock has been a nice add to the portfolio in the face of poor overall equity market conditions in the past week. Sell limit $44.61, sell stop $31.90. Technically, I would suggest a sell limit at $38.90 and a sell stop is good at $31.90, however raising the stop as price rises should be monitored and considered to limit risk. The problem is there are a few levels of support below the $33.90 level, so it gets tricky finding a precise level that is not too far beneath the current price.

7. INDA fell from the tight range in which it traded in November. Support is found at the noted 29 level. INDA has been down 6 days in a row amid emerging market weakness. The rising 200dma is just beneath current price at 29.4. A mental stop is in place below the key 29 level. Mental sell limit near 35.

8. SNH has been steadily climbing off the October lows as equity prices trended higher through November, then as yields fell in December. Resistance is found at the November and December peaks at 22.85, which is confluence with the 200dma. Support is found at the rising 50dma and uptrend line off the October lows. A break above the 22.85 level would be a nice bullish move, which would trigger a price target back to the spring and summer highs just shy of 25.

9. SPY saw one of its worst weeks of the year this past week, falling 3.4% off the all-time high. Support is found at the noted various retracement levels. The rising 50-day moving average is just below current price, at 200.22. The rising 200dma is near 195. Resistance at the all-time high near 208.5. SPY will go ex-div this coming Friday. SPY has been a ‘buy’ each time it has touched the 30-35 level on RSI this year. SPY is about to enter a seasonally bullish period from mid-December though year-end. Volume has increased on the recent pullback from all-time highs, however volume has consistently been higher on corrections in the last 6 years on SPY than on rallies. Plenty has been discussed on the bullish election cycle we are currently in for SPY.

10. VGK also suffered a very tough week, falling 5.4%. Support is found at the October low at 42.81. Resistance is above at the August and November inflection points near 55.70. Further resistance is above at the falling 200dma. An overall downtrend persists, despite an 11% rally from the October low to the November peak.

11. VPL has been a sideways, though volatile ETF in 2014. Resistance is found at the downtrend line off the July and October peaks. Support is found at the February and October lows near 55.60. The 200dma has been pretty much flat all year. VPL also fell 3.4% last week.

12. VWO took the brunt of the hit last week, falling a whopping 6.4%. Support is found at the February low (coincides with the multi-year range lows near 36-37). Support could also come in to play on the green downtrending support line off the October spikes down. Resistance is found off the downtrend line off the September and November peaks. VWO is down 7 days in a row, and 10% off the November peak; nearly 20% (bear market territory) off the September false breakout peak.

13. WFM held up quite nicely during last week’s sea of red on Wall Street, holding the post- November rally lows just above 46. This is the type of chart that bulls keep on their watch lists if/when the overall market recovers. If SPY recovers, WFM likely breaks this narrow range to the upside to take another leg higher. A near-term bullish target of $52.50 would trigger on a break above $49.50. On the flip side, if it breaks below $46.20 or so, then a target near $43 is triggered. Overall, this looks like a bullish setup given the recent relative strength and nice chart pattern.

14. Part II
“Often times, the best trade is a stop out.”
This could be the theme of OFG 2014-2015. Just about all of our exits have been for losses, but that is not always a completely bad thing. Below are charts of stocks on which we were stopped out (or decided to simply dump). I discussed this briefly this past Tuesday, but it is worth noting in The Chartbook. I will simply show the chart with the red line being where we cut losses. A brief annotation on some. I’ll start with a summary on how we avoided potential massive losses:
 ETE is currently down more than 13% from sell stop.
 EWW is currently down more than 13% from sell stop.
 EWZ is currently down more than 5% from sell stop.
 ICLR is currently down more than 5% from exit.
 JNK is currently down more than 3% from exit.
 LLY down about 0.5% from sell stop (assuming it indeed stopped out Friday afternoon).
 SPWR is currently down about 10% from sell stop.
 SSL is currently down nearly 12% from sell stop.
 VLO is currently down nearly 4% from sell stop.

15. EWW is down 14 days in a row!

16. JNK 7 in a row!

17. LLY was tagged with the kiss of death from a Morgan Stanley upgrade on Thursday.. popped then dropped. 7% sell stop should have triggered near 69.80 by my math.

18. SSL down 8 in a row, 13 of the last 14. Catching falling knives leads to bloody hands.. (but we only were out 3.5% on this)
Merry Christmas, all!