Sunday, November 24, 2013

MO Altria Weekly Chart Bull Flag Overbot Rising Wedge Negative Divergence

MO is a divvy darling highly worshipped by the long side. You can always guarantee that folks will buy cigarettes, even if they are hooked up to a lung machine. MO is another high-flyer leaping from 7 in 2004 to 40 in 2013, +470%, a near 6-bagger, in 8 to 9 short years. Also, from 10 to 40, +300%, a 4-bagger, in the last 5 years. Future Fed Chair Yellen does not see any asset bubbles in markets; everything looks perfectly fine. The bull flag off the bottom in 2004 shows the first leg from 7 to 18, then the sideways to sideways lower consolidation flag, and then the second leg from 11 creates the target at 22 that was easily achieved. Price explodes higher during the ongoing dividend stock bubble this year. MO is a divvy fave and traders keep squeezing in the front door to pump it higher with the Fed's easy money. It may be prudent to exit out the back door.

The red lines show the negative divergence in place and price is extended well above the moving averages requiring a mean reversion (lower prices). A lot of these strong upside momo plays this year will not roll over easy, it may take a few down-up down moves to burn off the upside energy and allow the negative divergence to gain traction. The low 30's would not be surprising in 2014, where price would then decide if it wants to go lower, or not. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

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