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With a new month, it's time to revisit trading levels for gold and oil and several stocks I've featured.
When gold was at $513.80 on Dec. 6, I highlighted Harmony Gold (HMY - commentary - Cramer's Take) as a way to play the speculation that gold would continue to move higher. The stock ended January at $18.63, up 48.7% from the close of $12.53 on Dec. 6. Today, Harmony, like gold, has become a pure momentum play as shares are 22.2% overvalued with fair value at $15.24. The weekly chart profile shows overbought momentum with the five-week modified moving average (MMA) at $15.21. HMY has reached my zone of semiannual risky levels at $18.32 and $18.94. Within this price range I would consider reducing a position in this stock by 50%. I would add to this position again on weakness to my monthly value level at $15.31 but let the balance of the position ride the momentum. Then on Jan. 3, I profiled Compania de Minas Buenaventura (BVN - commentary - Cramer's Take), a miner of gold, silver and other metals in Peru. This stock has not performed well, down 6.2% from the Jan. 3 close of $29.56 to the Jan. 31 close at $27.72. Today, the stock's weekly chart profile shows declining momentum with the five-week MMA at $28.13, and the 200-week simple moving average (SMA) as support at $20.32. I show an annual pivot at $26.03 as a level at which to add to this holding on weakness. My semiannual pivot sets the upper end of a trading range at $29.89, while my lower annual value level is $20.96 with my higher semiannual risky level at $32.72. Thomson/First Call analysts covering BVN have a median price target at $33.50, which matches my overall positive profile. Eyeing Energy StocksCrude oil traded as high as $69.20 on Jan. 23, falling between my quarterly resistances of $68.05 and $71.10. Monthly resistances are above this level at $72.56 and $73.64. The trigger for strength was the gap open above my semiannual pivot at $64.58, which occurred on Jan. 17. The annual support at $51.87 suggests that the floor for crude oil is much higher than in recent years; this suggests that there is additional energy-related inflationary pressure still to be felt in the economic pipeline. There are potential supply disruptions that can't be ignored, including OPEC geopolitical concerns in places such as Iran and Nigeria.
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Richard Suttmeier is president of Global Market Consultants, Ltd., chief market strategist for Joseph Stevens & Co., a full service brokerage firm located in Lower Manhattan, and the author of TheStreet.com Technology Report newsletter. At the time of publication, he had no positions in any of the securities mentioned in this column, but holdings can change at any time. Early in his career, Suttmeier became the first U.S. Treasury bond trader at Bache. He later began the government bond division at L. F. Rothschild. Suttmeier went on to form Global Market Consultants as an independent third-party research provider, producing reports covering the technicals of the U.S. capital markets. He also has been U.S. Treasury strategist for Smith Barney and chief financial strategist for William R. Hough. Suttmeier holds a bachelor's degree from the Georgia Institute of Technology and a master's degree from Polytechnic University. Under no circumstances does the information in this commentary represent a recommendation to buy or sell stocks. While he cannot provide investment advice or recommendations, he invites you to send your feedback -- click here to send him an email.
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