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The Deipnosophist

Where the science of investing becomes an art of living

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Location: Summerlin, Nevada, United States

A private investor for 20+ years, I manage private portfolios and write about investing. You can read my market musings on three different sites: 1) The Deipnosophist, dedicated to teaching the market's processes and mechanics; 2) Investment Poetry, a subscription site dedicated to real time investment recommendations; and 3) Seeking Alpha, a combination of the other two sites with a mix of reprints from this site and all-original content. See you here, there, or the other site!

19 April 2005

In a nutshell

The following comments and chart are from Dorsey Wright...

P.F. Chang's China Bistro/PFCB is a member of the still-favored Restaurant sector. This particular group has been very steady despite the market weakness, showing near term RS as well. (Imagine that... I suppose a perception such as this one represents 'news' to most investors! - dmg)
PFCB is one of the better-looking stock charts in the sector, as evidenced by its overall positive trend and excellent Relative Strength. This is summarized by its 5 for 5'er positive technical attribute reading. PFCB is currently on a bullish catapult formation, and was able recently to go to new highs. The bullish price objective is 73-77, so this recent pullback to the 58 area improves the risk-reward for PFCB as a long play. Initial support lies at 57, which is also the middle of the ten week trading band. Below that is even more substantial support around the 53-54 range. Those looking for a new long idea after this recent market pullback can consider buying PFCB here (57-59 range). A first breakdown (double bottom) would come at 56, so those traders very short term oriented could consider this as their stop loss point, but ideally we prefer to give PFCB a little room and would use 51 as the initial stop loss point, as that would break the January-March support and violate the bullish support line.


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