HLG - Breakout at 410?

[pugnut]

Hi, I was looking at Hallensteins Glassons and noticed a potential breakout at 410, with a preceding spike in volume. Anyone got any comments about this chart? Do you think I'm on the right track for a buy signal?

http://homepages.ihug.co.nz/~forhunt/img/HLG.jpg

[KJ]

Due to report HY mid March-perhaps the result is going to be a bit better than expected?

[scamper]

Hello Pugnut, and Welcome!
I can certainly see your trading range and the volume spike, but I didn't know this was a Buy Indicator -- live and learn. Best check is to go back about five years and see whether this has been a good indicator in the past for HLG.

None of the indicators I know a (VERY) little about, are announcing a buy at the moment -- more of a hold and wait. The ADX is declining slightly, and the DMI+ crossed below it about two weeks ago -- both mildly negative.

However, the very good (and fairly long-term reason) for buying now is that the five-year upwards trendline is roughly the same upward slope as the one-year trend. This makes any time a pretty good time for the long-termers.

Another big plus is that HLG has always had a good div that's tracked up with the share price. The full announcement of sales and profit for the 6 months ending 1 Feb will be made mid March, and it is expected to exceed the same period last year by 10-15%.

The next div is due sometime in April, all of which makes now a pretty good time to buy, BUT...

That news release was dated 24 Jan, and since then there has been a big jump, so I guess the market has already absorbed the good news. It could be that the big volume spike was a clever bod selling...

Long-term, I don't think you can go to far wrong with HLG a relatively steady, low-risk stock.

Best wishes from Scamper, a happy holder.

[pugnut]

Thanks for you comments guys. I'll keep my eye on it for a while.

[limegreen]

I think the time frame is far too short to be calling a trading range where you have drawn in on your chart. HLG broke a confirmed uptrend at the start of December (green line). Generally the OBV is rising which is a good thing. To me it seems like there was resistance at around $4, which having been broken has turned into support. It's never broken the 200 day EMA, but is currently well above it. Potentially you could draw a tentative trendline under the big dip, and I'd definitely recommend a log price scale.

http://img.photobucket.com/albums/v361/limegreenz/hlg8mar05.gif

[scamper]

I feel (believe) that the trend is not broken, and should be drawn under the big dip, but I'm not entirely sure why.

Perhaps something to do with the 5-year direction, and the line-up of tops since last September. This goes from 380 through 394 at the beginning of December to 410 late Feb -- a steady 8% increase. Don't know whether this is statistically valid reasoning, but it does it for me!!

[limegreen]

I think anybody taking a long term (investment) position would agree. The big dip might have made one a bit nervy (I don't hold), but a very conservative measure such as the 200 day EMA would have kept you in, and I don't think that subsequent price action has suggested holding would have been a bad idea.

[Phaedrus]

Pugnut,
If you stand back a bit and look at HLG it is clear that this stock is in a relatively steady uptrend. Within this uptrend it is possible to identify all sorts of patterns, including the "trading range" that you have remarked on. As LG said, it is really too small to be of any significance. Lightly traded stocks such as this usually have a wide bid/ask spread and for a lot of the time covered by this formation, buyers were offering 400 with sellers at 410. Your "trading range" is simply depicting the bid/ask spread as people buy and sell at market. A proper trading range is wide enough to trade - that's why they are called that.
The volume spike you mention has some significance though - notice its effect on the already rising On Balance Volume indicator. This stock is still being accumulated.
I have plotted a trendline, moving average and trailing stop. Any of these would provide a suitable exit signal when triggered, though price action is currently well clear of all of them.
As far as entry signals go, use of an oscillator such as the RSI would identify good entry points. Such oscillators are mostly oversold at the moment, though.
http://home.ripway.com/2004-7/148483/HLG310001.gif

[Mick Jagger]

do you guys that use these graphs trade in and out of stock pretty regularly?

[Phaedrus]

Mick,
Charts can be used to trade any timeframe. Day traders use charts plotting data points at short intervals such as every 1 minute or 5 minutes. Very long-term traders use charts plotting weekly data points. Most commonly, daily data points are used. The indicators applied to a daily chart are varied according to the preferred trading frequency of the user. In other words, charts can be used to provide signals giving whatever level of activity you choose.

[limegreen]

Personally, I'm moving from a naive/broker advice oriented model of investing to a naive/TA model of investing. And the emphasis on investing, not trading. Thus, I'm looking for things that are either currently trending up, or I think are likely to trend up. I hope that graphs (TA) will give me better entry points, and mean that I now have an exit system. However, as an investor, I want very conservative exit signals.

[Mick Jagger]

yeah i can see where you guys are coming from... but the chart is just a reflection of the companies prospects and fundamentals right... so wouldn't you go back to the source in most cases? and when you are trying to buy something while its undervalued, or before its turned around etc... the charts gonna be of no use in these cases isn't it, because if the chart shows its on the way up then the markets already noticed the value in the stock so you're too late?

or am i missng the point? is this some kind of "follow the smart money" theory where the chart is just meant to help you spot the first time that the professionals start getting in there and you just hop on for the ride...

[scamper]

...an old thread, but with a relevant title...
What a hoot! hlg currently up ~3% today to 496, and the only supply is 1000 shares at 600.

either somebody knows something, or the 8% div due in april seems super attractive, or... ?

[KW]

Yeah - its been me cleaning up :-)

Growth plus yield - how can one go wrong?
Superbly managed company as evidenced by being one of the very few retailers who is actually increasing revenues/profits at a time when other retailers are downgrading.

[scamper]

It's been a long-term hold for me -- love those divs.
price still hanging on to the 500 with the nearest supply at 520. good-oh! :)
100-day moving average still on the increase. bollies diverging.
scamper's a happy pup. have a good weekend. :)