Stock Chart Analysis OPY

Posted by downtowntrader | 8/05/2007 07:02:00 PM | 0 comments »

Stock Chart Analysis OPY

Oppenheimer Holdings Inc. (USA) (Public, NYSE:OPY)

OPY is a stock that at the surface has a pretty good looking chart. There are a couple of warning signals though that are keeping me away from it here. The reason for posting is it is first, to show how subtle clues can be observed on a chart, and second, it could end up being a worthwhile trade eventually.

The first thing that stands out on this chart is the high volume in this consolidation phase highlighted by the blue lines. Typically, these pennant or bull flag patterns should have diminishing volume as the take a breather. When a stock see an increase in volume like this and it stays churning sideways, it often signals distribution.

Second, OPY is consistently making lower highs on each of it's rallies. This tells me that sellers are getting more aggresive on each rally.

Third, most indicators are in a negative divergence, although this is fairly normal for stocks that have had strong moves without pausing for a breather.

However, even with all the negative factors I have highlighted, price is still king. This is still a stock that has weathered the recent temper tantrum in the general markets, and especially in it's sector. The key here I believe, would be a move that closes over 57.

Good Trading,


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