Teaching Bats, Crabs and Sharks to Smoke

• Posted by Greg Harmon
• on September 17th, 2013

Tobacco stocks have been moving higher over the last two weeks, and a couple of Harmonic patterns suggest that they may have more room to run.

British America Tobacco, $BTI, found what many would call a double bottom August 28th. But this was actually a the makings for a Bat or Crab Harmonic. The Bat would support a rise to 113.26 and the Crab to 124 and change. The RSI and MACD support a move higher in this name.

Lorillard, $LO also looks good for more upside. This one is working through a Shark Harmonic. The Potential Reversal Zone allows for a move higher to 45.65 or 46.60. This also has support from the momentum indicators for more upside.

There is similar upside potential in Reynolds American, $RAI, Philip Morris International, $PM, and Altria, $MO. And don’t forget that the worst of thee carries a 2.6% dividend yield while many are over 5%. So who says it does not pay to smoke?

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