Time to Start Smoking

• Posted by Greg Harmon
• on July 14th, 2011

With Google Earnings blowing the stock price through my $100 wide short Strangle play I think it might be time for me to take up smoking to calm my nerves and shorten my life span to keep up with the money. It looks cool too right? But which company is the best suited, from a stock price perspective, to be able to remain healthy long enough to get me addicted. Let’s look at some charts.

British American Tobacco Industries, $BTI

British American Tobacco Industries, $BTI, is a good place to start since it is British too, another cool thing. But maybe not so good from a look at the chart. It has been in an expanding wedge or megaphone pattern since the beginning of May. Currently it is pushing lower with support of the gap at 88.85. If it can hold there then it can move higher to the top at 92.24 and attempt to continue higher via a break out. If it fails at 88.85 then there is support at 86.5 and 84 before a test of the bottom of the wedge and potential for a breakdown. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators both favor a move lower. A possibility.

Lorillard, $LO

Lorillard, $LO, is in a long bullish flag after a move higher off of support at 97. If it can break the flag higher then it has a target of 120 to complete the flag, with resistance at the previous high near 116 from May. If it falls out of the flag lower then look for a move to 103 and then support lower at 99.50. It could break either way but the very tight Bollinger bands suggest that it will resolve shortly. Another possibility.

Altria Group, $MO

Altria Group, $MO, is in a falling wedge and heading lower. With the RSI rolling lower and it bouncing off of the top rail it looks to continue lower with support at 26.35 and then 26 and the bottom rail below near 25.50-25.60. A decent short.

Reynolds American, $RAI

Reynolds American, $RAI, just might be the one. It is in a rising channel and moving to test support of the lower rail of that channel. If it holds at the current level of support at 37.10 or at the rail at 36.80 below. It would be a good long entry with resistance higher at 38.40 and then the previous high at 39.32 before having free air above. If it fails at the rail then all bets are off as support is lower at 35.10 but it looks like this one will do for a new habit.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

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