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United Technologies Corporation Message Board

  • luckyone581 luckyone581 May 2, 2010 5:10 PM Flag

    UTX Chart Evaluation & Sell Mention

    UTX has mimicked the DOW rally over the past year. Nonetheless, just like the index, the stock has been showing increased volatility and trading ranges over the past week, suggesting that a top has been found. In addition, the resistance levels the stock is facing are much stronger than the DOW as the stock has gotten within 6% of its all time high, unlike the index which is still 15% away from its all-time high and failing only because of the 200-week MA has been reached.

    UTX made a new 28-month weekly closing high the previous week when it closed above the 75.15 weekly high close seen the week of April 28th 2008. Nonetheless, this past week the stock closed below that high suggesting that a failure to follow through signal is being generated. Another close below 75.15 next week would confirm the failure and likely generate strong selling.

    On a weekly closing basis, resistance is now decent at the previous week's close at 76.47. Above that level, there is strong resistance at 78.07 and major at 80.84. On a daily closing basis, decent resistance is found at 76.02 and strong at 76.93. On a weekly closing basis, support is minor at 73.69 and then nothing until minor support is again found between 67.49 and 68.01. Below that level, strong support is found at 65.69. On a daily closing basis, support is minor between 74.32 abd 75.00. Minor support is again found between 73.46 and 73.69 and then nothing until minor support at 72.81. Below that level there is absolutely no support until the 200-day MA, currently at 64.15 is reached.

    UTX shows a small double top on the intra-day chart at 77.08.77.09 as well as a successful retest of that high with a rally on Friday to 76.49 and a reversal type day having gone above the previous day's high and closing below the previous day's low. On the daily closing chart, the high daily close at 76.93 has been successful tested with Thursday's close at 76.02 and Friday's close in the red.

    UTX has not built a support level of consequence due to the steep climb it has seen. If it starts breaking, the fall could be notable. Over the past 4 weeks, the stock has been able to generate a bit of support between 73.61 and 75.00 but the support is considered minor and if broken could cause a drop to $65.

    Sales of UTX between Friday's closing price of 74.95 and up to 75.75 and using a stop loss at 76.59 and an objective of $65 will offer a risk/reward ratio of 6-1.

    My rating on the trade is a 3.75 (on a scale of 1-5 with 5 being the highest).

    My name is Tony and I am a chartist. I have been trading for close to 30 years. In the 80's I was a broker/trader/analyst for Merrill Lynch, Dean Witter, and Pru-Bache.

    I offer an inexpensive chart evaluation service on stocks of your choice through membership to my newsletter and message board.

    “When or where do I get in? When or where do I get out? What is the trend for the next week? For the next 3 months? Where are the strong buyers and where are the strong sellers (based on past action)? What is the risk/reward ratio on my trade (based on chart objectives)? What looks good right now (chart-wise)?”

    These are some of the questions that I try to answer through chart evaluation.

    I offer a monthly service that includes a weekly newsletter with chart evaluations on 4 stocks that I believe have attractive chart patterns and good risk/reward ratios as well as 1 chart evaluation per week on a stock of your choice. Evaluations include entry and stop loss points as well as likely objectives. The service also includes membership to a message board where daily updates on all stocks and stock indexes are given. Cost of the service is only $27.95 per month. A 2-week Free Trial is offered. If you want a lesser package, I do offer one for $4.95 that only talks about the Stock Indexes.

    If you are interested in learning more about the service, click on my nick and get the website address from the profile area.

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    • I covered my shorts today at 67.23. Profit on the trade of $1519 per 100 shares (2 mentions) minus commissions.

      The stock could still get down to the $65 level, but at 67.40 the 200-day MA is currently located. As such, a good place to take temporary profits. I will be looking to reshort the stock on rallies up to 70.00 to 71.30.

    • No, I didn't cover my shorts but I did add to them yesterday at 73.64. I am now averaged short at 74.825 with double the positions. Stop loss has been lowered to 74.35, so I am just about guaranteed a small profit under the worst case scenario.

      Nonetheless, the DOW having broken below an important support at 10700 today and now trading below the 100-day MA, currently at 10618, it is now likely to get down to at least the 200-day MA at 10225.

      By the same token, it would not be at all surpsiding to see the DOW back to last Thursday's low at 9870.

      My objective on UTX continues to be $65.

    • Hope you covered your shorts.

    • volk56bs@sbcglobal.net volk56bs May 3, 2010 8:29 PM Flag

      Lucky One 581, I see alot of Selling on Strength and No Big Buys on The Open Market. Does this tell you anything? I have alWAYS been a Buyer of thia stock. Your thoughts please.

      • 1 Reply to volk56bs
      • Certainly volume and strength of purchasing, and or selling is important.

        Nonetheless, I don't use any of that information in my chart analysis. To me it is more about support and resistance levels.

        You should also consider that UTX is a DOW stock and the DOW has given "strong" indications that it has topped out........not for a correction but a mid-term top, if not long-term (12-18 months).

        This is also true with the NAZ and the SPX.

        Stong buy signal is being given today in the VIX as the index has a successful retest of the lows, a breakaway and runaway gap, as well as a strong break of the 200-day MA. A buy signal in the VIX is a sell signal in the indexes.

        Also keep in mind that UTX has come up to this level without building any strong support levels and a drop down to the $64-$65 level is highly possible. Also keep in mind that a drop down to that level is not considered bearish as the 200-week MA is down currently at 64.25. Such a retest can still be considered "normal" within the context of a bull market.

        So, even if you don't think this is a mid-term top to the market, you still need to consider that even a simple but strong "correction" can shave off $10 to the stock.

        Also realize that the Elliot Wave (which I consider very effective) states that a mid to long term top to the indexes would be made by May 1st. It goes on to say that it is a top that is likely to last somewhere between 12-18 months.

        So take all this information, work out the risk/reward ratio, as well as the possible benefits of keeping the long positions, and make your own decision.

    • I shorted UTX at 76.01 per my newsletter mention. I am using a mental stop loss at 76.69. My objective is $65. I am risking $68 to pick up $1100 per 100 shares. It is better than a 15-1 risk/reward ratio.

      As far as a "mental" stop is concerned, if the stop loss point is triggered I wait about 15 minutes to see if the stock follows through to the upside or if it was just traders going after stops, If the stock reverses back down within that time period I will readjust the stop loss. If the stock continues upward, I then make the decision to change the stop or get out.

 
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