Obsessions Create Blind Spots

Wall Street's fixations on stocks such as Intel mask opportunities elsewhere.
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This column was originally published on

RealMoney

on June 10 at 9:08 a.m. EDT

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Have you ever noticed the way people sometimes become obsessed over one aspect of the market?

For example, back in early March it was all about oil. Last week and this week, the obsession was centered around

Google

(GOOG) - Get Report

and its potential rise to $300 a share. But when that didn't happen,

Intel

(INTC) - Get Report

became the focus of the day.

Intel's chart has done nothing wrong, but if I have to hear one more time how Intel is up 18% in a month and 40% since September, I think I'm going to scream! After all, I don't see anyone highlighting

Halliburton's

(HAL) - Get Report

70% rise since last September. And

Baker Hughes'

(BHI)

17% rise since mid-May is surely in the same category as Intel's rise. Still, we don't hear about anything but Intel.

And what about gold? As I posted the chart of

Newmont Mining

(NEM) - Get Report

last night, I wondered why I never get any questions on the gold stocks anymore, a group that folks were so hot on just a few months ago.

What happened to all those gold bugs? It must be the fact that the dollar is no longer declining. But if you look at Newmont's chart, which shows a stock that really seems to have fallen from grace, you can make the case that this is a potential right shoulder of a head-and-shoulders bottom.

Is it a great chart? No way. It has so much resistance overhead, but wasn't Intel also a stock that had fallen from grace at some point? Great charts develop over time. If Newmont begins to hold down here and (heaven forbid!) even rally, it will have the very early signs of a bottom.

There's another stock that had a big fallout with the Wall Street community earlier this year:

International Game Technology

(IGT) - Get Report

. Recently this stock rallied from $27 to $29 and then spent the next several weeks moving sideways, consolidating those gains. A move through $29 would clear this area, but it would also cross a downtrend line that has been in place for about a year. If it could do it on volume, we would be able to say the downtrend is officially over.

So the next time Wall Street gets obsessed with one particular stock or group, mute the TV and do your best to ignore it.

For the market as a whole, I am still monitoring the intermediate-term indicators for signs of rolling over. None have rolled over so far, but it continues to look like this could happen next week. I will keep you posted on their progress.

Overbought/Oversold Oscillators

For more explanation of these indicators, check out The Chartist's

primer.

At time of publication, Meisler was long Baker Hughes, although holdings can change at any time.

Helene Meisler writes a daily technical analysis column. Meisler trained at several Wall Street firms, including Goldman Sachs and SG Cowen, and has worked with the equity trading department at Cargill. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. She appreciates your feedback;

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