As the tittle of this post says, there has to be something worth buying and indeed there is. Overall I'm still bearish on the stock market but there are some pockets of strength that are worth keeping an eye on.
The groups that might be worth buying are the ones that are commodity related. Anything that has to do with gold, silver, steel and especially oil might be an excellent group of stocks to focus on as potential longs.
Above is a weekly chart of the XOI index and in the lower pane is the %R oscillator which is very similar to the stochastics indicator. You'll notice over the last 3 years whenever %R reached an oversold condition it usually coincided with excellent buying opportunities 87% of the time. Right now %R is at such a level which is why I am writing this post.
At the moment I DO NOT have any entry signals to buy in any of the commodity related groups (except for XAU and HUI) but I did want to post the above chart so you can see what I am looking at BEFORE the move happens. I'll keep you all posted if I do anything.
One more thing, some of the other groups I am watching are STQ, XAU, OSX and XNG.
Friday, June 27, 2008
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