XLI – Industrial ETF for long term investment during economy recovery

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XLI is another ETF that I am watching closely. When the economy comes out from recession and starts the recovery, the companies from this sector will start to manufacture capital equipment, machinery, engines for transportation, etc. Every company needs to have those infrastructures & equipment in place to expand their manufacturing capacity to produce the goods during the economy expansion. The top 20 companies for the XLI ETF as of Sept 9, 2009 is listed below:

As of Sept 9, 2009, XLI ETF is traded at $25.96. It is trying to break the strong resistance of $25.445 (61.8% Finonacci Retracement Level). XLI is currently above 20D, 50D and 200D MA line. 200D MA, a long term trend has reversed and currently on the up trend. I will wait for see whether XLI can break the resistance and stay above the $25.445 in Sept / Oct before I put my money into this fund.

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Citigroup – Insiders buying in August 2009

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Citigroup Chairman of the Board, CEO of Citibank N.A & 3 Directors were the insiders who bought Citigroup shares last month. The Chairman & the CEO bought 1 million shares each at $3.21 and $3.41 respectively. It is a good sign when insiders purchase their own company’s shares because they know the company’s business much better than any investors. This is also a good indication for investors to take long position of this stock.

Stock’s Background

  • 3 years historical high = $55.08
  • Current Price = $4.68

Note: The stock price is unlikely to go back to $55.08 because the fundamental of the company has changed. Citigroup is still losing money this year.

I am waiting for a right time and right price to buy this counter for long term investment.
My plan:

  1. Wait and see whether the stock price can hold above $4.26 and the 20D and 50D MA support trend in Sept. If the stock price continues to stay up after big Dow Jones & S&P500’s correction, I will consider to buy at the price near $4.26 in Oct.
  2. If the price breaks the $4.26 support level,  my entry target is around $3.65. I need to make sure all the Technical Indicators do not show bearish convergence and the stock price is not on the down trend.
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General Electric – Testing the strong resistance for the 3rd time!

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General Electric (GE) had a gap up yesterday closed at $14.52 (+4.69%) after JPMorgan upgraded GE to Overweight from Neutral and raised the target price from $12 to $17. I will be keeping a close watch on this share over the next few weeks to see whether it can break the resistance of $14.57. Next immediate resistance is $16.44. I am planning to keep GE as long term value investment.

Stock’s background

  • 3 years’ historical high = $42.12
  • Current Price = $14.52 (35% of the historical high)
Continue ReadingGeneral Electric – Testing the strong resistance for the 3rd time!