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MasterCard Incorporated Message Board

  • pick_them_ripe pick_them_ripe Jan 17, 2008 11:59 AM Flag

    Technicals just turned negative........

    I'm out. Charts are showing a visit the the 150 area by the end of the month. Macd, stoc, ma's, rsi, they've all turned south. Bolinger bands are also pointing straight down.

    It was fun while it lasted.

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    • Don't know where you learned your TA but you're interpreting most of those tools completely wrong if you're looking at the daily's (which you should be if you're talking longer term).

      RSI: dipped below 30 a couple of days ago signaling the sell off is overdone (it immediately crossed back over 30 to the upside yesterday when we closed green).

      Stochastics: Doesn't matter which ones you're looking at (slow, fast or full), they're all in oversold territory (below 20) and on their way back up (which is usually a buy signal).

      Bollinger Bands: We've basically been trading on the bottom / below the bottom band for 2008, and just like when this happens on the upside, a correction is coming, which means sideways to positive trading in this case.

      MACD: Looks ugly but if you look back to August when we bottomed out you can see a very similar pattern. By the time MACD gives you a clear buy signal, you probably would have missed most of the move.

      Moving Averages: I really don't rely on the moving averages to indicate where we're going unless I look at them as support / resistance areas. Back in August when the 20 went below the 50 you would have missed a 25 point move to the upside if you sold before it actually happened (predicting a death cross). All of these indicators are lagging indicators and they should be looked at AFTER you look at trendlines / support / resistance areas. Plus you have two potentially positive catalysts at the end of the month in the fed rate cut and earnings.

      Support / Resistance: We have been bouncing off of the gap window for the past 3 days and have yet to close below it (stocks tend to want to close or fill a gap in the chart which is why bouncing off of it so resiliently makes it a positive indicatation).

      Things to note: Even though the market has been continuing to go down this week, MA has been holding up relatively well and it appears that the selling has tapered off. One thing to look for is a close below the 173-174 level on heavy selling volume. If that happens we could go back and fill the gap from the end of October. I don't see this happening for a few reasons:

      The first of which is all of the technical indicators saying we're oversold and some of them indicating things are improving.

      The second of which I touched on in one of the earlier points, the fed will be aggressively cutting rates in the near term. Rate cuts may not be the fix for the markets problems, but it increases investor confidence and gives you the feeling that the Fed is on your side and wants to see the market do well. A short term euphoric effect before people realize how bad things are.

      The third is earnings. I think with the recent news out of companies like COF, AXP and DFS has really affected MA negatively. People don't take the time to learn the difference between these companies businesses, so they just lump them all together and collectively sell them off when even one of them has bad news. This quarter is critical for MA to at the very least meet estimates. Last quarter, AXP put up decent numbers which was REALLY a signal that MA was going to kill it, but this quarter AXP as well as other credit card companies disappointed. As you saw, MA got slaughtered. At this point I think the bar is pretty low for MA and even a slight beat would send us higher. With most of MA's business outside of the US plus the weak dollar effect, I doubt we disappoint the street.

      There, I just gave you several reasons why we won't see 150 by the end of the month. Care to elaborate on why you seem to think we will?

    • That is rediculous. Look at b.b. Last month around options. price went up dramatcally while b.b. Went down.

    • Baloney. GL, though.

 
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