Posted on September 9, 2008 - by andrew

Stock Chart Update: Apple Inc, BMI, CSX, STJ, MPWR

If you’ve been following the market’s behavior over the last month, you already know that July’s rally stalled and is now a correction. I wanted to give a quick update on the stocks I analyzed recently:

Apple Inc. (AAPL)

Apple has not changed much since my first post. At the time, it was shaping a cup base. It eventually stared to form a handle with a buy point of $180.45 (Point 1). It has since fell about -17% below that buy point (Point 2). I would wait until AAPL reaches the old buy point of $180.45 before considering buying it.

Badger Meter Inc (BMI)

As stated in my previous post, Be cautious with Badger Meter Inc (BMI), BMI had two red flags that warned investors to avoid buying it:

1. Only averages 142,000 shares a day - thin stock, below the minimum 300-400K shares daily volume.
2. Negative reversal on huge volume - had a big gain, then three big distribution days the week of July 25, 2008

The week after my post, BMI had a rebound on strong volume that might have suckered some investors back into buying shares (Point 1). But you can see over the next four weeks, BMI sliced through its 10 week moving average (Point 2), then crashed all the way to its 40 week moving average (Point 3).

CSX Corp (CSX)

Transportation-Rail stocks were doing well at the time I wrote my original post, CSX Corp. (CSX) forming a Cup Base Pattern. But as the rally stalled so did CSX and the rest of the rails. CSX went on to form a cup-with-handle base that ended up failing. CSX sunk to its 40 week moving average on heavy volume last week. Watch CSX to see if it can build the right-side of this current base with healthy volume.

St. Jude Medical Inc. (STJ)

St. Jude was forming a three-weeks-tight pattern as biotech stocks seemed to be amongst the leading sectors when the rally began. But STJ ended up moving sideways and formed a flat base (Point 1). The bright side is that volume has been low, which means big investors aren’t dumping shares. Keep STJ on your radar when a new rally begins.

Monolithic Power Systems (MPWR)

When I wrote my original post, MPWR broke out of its cup base on strong volume. The rally was still going strong at this point and I decided to buy some shares in MPWR (see my trading journal). But within a few days, MPWR quickly triggered my -8% loss rule and I sold my entire position.  MPWR has since sunk down to its 40 week moving average.