|Avnet Inc. (AVT) is one of the world's largest industrial distributors of electronic components and computer products. Figure 1 is a chart of AVT. Just with a glance, you can see that technically, it has given a buy signal. Consider these factors: |
a. The Friday, January 28th price rose on a gap, and on strong volume.
b. The moving average convergence/divergence (MACD) indicator is turning, and although it is a trend-following indicator, the MACD (blue histogram) has moved above the nine-period exponential moving average (EMA) (red dotted line).
c. The stochastic oscillator is starting to turn, suggesting that it could soon give a buy signal (when it breaks above the 20 line).
d. The commodity channel index (CCI) has given a buy signal by rising above the 100 horizontal line.
|The trendline, however, is a concern, because the pattern is a trumpet shape -- a broadening formation -- which suggests an unreliable trend, so caution would be key. |
Because of the gap, we could expect a retracement to fill the gap. Once this has been done, we could buy and hold the stock with a possible target of $20.69, the upper trendline. But because of the trumpet formation, we should be cautious. The resistance at $18.55 could be a factor.
|Figure 1: Avnet. A good look at this stock suggests keeping an eye on it.|
|Graphic provided by: MetaStock.|
|I would buy the stock at current prices, with an immediate target of $18.55. Should the price break decisively through this level, my target would rise to $20.69.|
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|Phone # for sales:||6042634214|
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