Prepping to Buy Paint

• Posted by Greg Harmon
• on May 29th, 2014

Many of you know that I just moved house. There has been a lot of unpacking and moving furniture over the last week. But what those of you outside of Shaker heights don’t know is that there was a lot that had to be done before moving in. Mostly from the seller. You see the town does an inspection of the house outside of the buyers inspection and it accumulates a list of things that need to be repaired in good order before a sale can be made. It is called a Point of Sale (POS) inspection. The buyer or seller can take on the list and for the most part it has become a contingency for the purchase by the buyer that the POS is passed. This is mainly a visual inspection for upkeep and tidiness, but in a town where the average house is over 90 years old it can bring some obvious structural issues.

In our case the POS was minor but it did require repainting the outside of the house. Heading into Spring and with less than a month to close this can bring some anxiety. Just do it already. We drove past the house daily to see no progress for the first two weeks. Then some ladders and scraping the third week. A potential breakthrough. Only to be stalled by several days of rain. The painting started 5 days before the closing and as we did the walkthrough the night before there were ladders in the back yard and tarps and paint cans all through the garage. It took only a few days to paint and in the end the closing was not delayed. It just required patience to wait for it to happen.

As traders we go through this process daily waiting for a stock to break out. The anxiety of waiting for a breakout to occur in a stock. It tests resistance and pulls back or stalls. And then eventually it breaks out, maybe. When it happens we are excited and the anxiety is lifted. It just so happens that one stock I am waiting for to break out is a paint company, Sherwin William, $SHW. And to tie it more closely to the story they are headquartered right here in Cleveland. Take a look at the chart above. The price action has developed resistance at 204.30. it tested it and pulled back and and has recently tested it again and is holding near it. There is rising trend support tightening against the resistance. It also has support for more upside from a rising RSI and MACD, the latter which has crossed positive again last week. I will sit and wait patiently for it to move above that resistance. Unpack a few more boxes, maybe hang some pictures. And continue to prepare to buy some paint.

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