^Disclaimer

^{Privacy Notice}

^{Terms of Service}

Chart of the Week - May 11, 2009

 Int'l Container Terminal Services, Inc. (ICT)

ICT Monthly Chart - Rebounding Off its Support at 10.00

charts are courtesy of Metastock

ICT Weekly Chart - Approaching its Resistance at 20.00 

charts are courtesy of Metastock

ICT Daily Chart - Trading at Extremely Overbought Conditions but Uptrend Remains Strong

charts are courtesy of Metastock

Legend: blue lines - range for Tsupiteros

            dotted blue lines - range for Position Traders

            red lines - important trend lines

Int'l Container Terminal Services, Inc. (ICT) has been one of the stellar performers of the entire market last week as prices climbed from 12.25 to 17.75 in just six days' time. I guess the big question in everybody's mind right now in ICT is, could prices still go up from here?

The monthly chart of ICT is certainly quite encouraging since it seems like the stock has already rebounded off its support at 10.00 and is now ready to resume its uptrend. If you will remember, the previous high of the stock registered last Dec 3, 2007 was 49.00. Does this mean that prices will now eventually head back to that level from here? Possibly, but in order to confirm that scenario, we need to look at the smaller time-frames first and see if those time-frames are already trending up already.

The weekly chart of ICT is the trend that the Position-traders should be looking at. What do you notice? The trend of the stock in this time-frame is still down. Therefore, unless the stock could trend up in this time-frame, a run towards that 49.00 level will not be possible. The level to break in this time-frame is the psychological 20.00 level. As long as prices stay below that level, I would tend to think that this short-term uptrend that we are now seeing in ICT is but nothing more than a bear market rally.

Now, let's go one time-frame lower and look at the stock's daily chart. As you can see, the stock is currently enjoying a very strong uptrend right now in this time-frame and has just broken above its previous high at 16.75. However, the stock is now nearing extremely overbought conditions and may be vulnerable to a correction very, very soon.

So how do we trade this stock? For Tsupiteros, who are lucky enough to be holding this one, you have the option to do two things right now: either hold and just raise your mental stops as the stock goes up; or, try to take profits as close to 20.00 as possible. I would certainly not recommend buying ICT anymore at current levels. If you do want to buy it, I would wait for a correction to occur first before getting in. As for Position-traders, the stock is sort of like in the middle of heaven and hell right now. For those who are already positioned in this one and are using a buy and hold strategy, I would suggest to just hold and use a break below the 13.50 level as your mental stop. But for those who would like to position just now, you may want to wait a little while longer and see how the stock behaves here at the 20.00 level. If the stock is able to form a higher low the next time it corrects, you may probably want to start buying there along with the Tsupiteros. Just remember, the stock will only start to trend up in the medium-term if prices are able to convincingly breakout above that 20.00 level. So, if the stock holds below that level and starts to drop back down, there might be a risk that prices may start to trend down once again.

In summary, there are now plenty of reasons to be bullish in ICT, however, don't be too complacent yet as we haven't really confirmed yet whether the stock is indeed trending up in the medium-term already.

Notes:

Short-term Traders/Tsupiteros vs. Medium-term/Position Traders: Recommendation for short-term traders or Tsupiteros are meant to be used by traders whose holding period are limited to one day to two weeks. Medium-term or position traders are meant to be used by traders whose holding period are two weeks to three months. Long-term investors whose holding period is more than three months should not follow these recommendations.