Sometimes A Beam Can Be A Diamond
- Posted by Greg Harmon
- on February 26th, 2013
This is not about Jewelry. Nor is it about commercial construction. It is about liquor. Specifically Beam, $BEAM, the makers of Jim Beam Bourbon. This stock has been in the news a bit lately for diluting down their premier product. But with that water under the bridge, there is an interesting phenomenon occurring in the chart. A Diamond Pattern has formed and is about to break down. This rare pattern can resolve either up or down, but is better known as a Diamond Top and that is what it is showing today. The target out of the pattern is a retracement of the move into the pattern,
and that is why it is interesting. A drop all the way back to 53 would be quite a short trade. Don’t believe in the patterns and want some quantitative support? Fine, the Relative Strength Index (RSI) and the Moving Average Convergence Divergence indicator (MACD), both measures of momentum are both pointing lower. The MACD has been out in front leading the way since the initial run up. A move under the 100 and 200 day Simple Moving Averages (SMA) below 58.95 seals the deal lower and can be used as a short entry. Hmmm, I am getting thirsty.
Join the Dragonfly Capital Views Premium Membership
Sign up here to get deeper analysis and nearly 50 trade ideas every week.
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
- Premium Earnings 6-29-15
- Top Trade Ideas for the Week June 29, 2015: Bonus Idea
- Top Trade Ideas for the Week of June 29, 2015: The Rest
- Top Trade Ideas for the Week of June 29, 2015: The Rest Premium
- Top Trade Ideas for the Week of June 29, 2015: The Best
- SPY Trends and Influencers June 27, 2015
- Macro Week in Review/Preview June 26, 2015
- How Last Week’s Premium Top 10 Performed
- You bought a stock, now here is why you need to know options
- Do you own Bank of America yet? Why not?