Honestly...My Back Hurts

Hey, what’s up y’all?

My second post is here way earlier than I anticipated. But when inspiration strikes I’m not going to overthink it, I’ll just start writing.

Anyway…at 28, it’s certainly too early in life to have chronic back pain. But luckily, I have solid health insurance and am working on addressing the issues. That said, some days are worse than others, and today is a rough one. So while I sit here and ice my back, let’s look at some charts and make lemons out of lemonade.

I have a lot to do before I’m ready to start putting capital at risk. And one of those tasks is updating my research universe, as it’s been a couple of years.

The other is being able to identify which securities pique my interest with just a quick look at the chart. While I will eventually incorporate fundamentals into my decision-making process, the primary driver will remain foundational technical analysis concepts like trend, momentum, and relative strength.

Today I’m checking both boxes by reviewing my old International ADR universe. Here are some interesting charts from a longer-term trade/investment view.

First up is CRH Plc, which is listed in London but trades in the U.S. as $CRH. The materials stock is following homebuilders and construction stocks to new all-time highs, breaking above resistance that’s been intact since 2007. It’s had quite the run since last year’s lows, but if markets pull back in the coming weeks, it may create a chance to pick up shares on the retest of $50.

Travel and leisure stocks remain hot in the U.S. and globally, with Intercontinental Hotels Group ($IHG) breaking out of a five-year base. If prices can hold above the low 70s, the path of least resistance looks higher.

Opera Limited is a Norwegian software conglomerate that broke out earlier in the year and is pulling back. Norwegian stocks have lagged developed markets, but this one looks like a standout if it can stay above its breakout level of 13-14.

Mexican airport operator ($PAC) continues to consolidate near all-time highs. If it can stay above 170 then I’d expect it to eventually break out to new highs.

Moving away from breakouts to some laggards. British American Tobacco ($BTI) remains a disaster, but is approaching the lower end of a 5-year range. With a dividend yield above 8%, some dip buyers might be looking to step in here for a trade back up towards the middle/top of this range.

Clearly the risk/reward on the short side is diminishing, but if prices do close below 31, then the stock has downside risk to its financial-crisis lows near 23.

MiX Telematics ($MIXT) looks like a classic short setup here with its breakdown and retest of 7.15. That said, it’s a micro-cap so probably not the easiest to short since there’s no liquid options market. It was too clean a chart not to include and worth saying if you’re long this thing, best look out below.

Last on my list is a nice base in Yalla Group Limited ($YALA), which is in the communication services sector of the United Arab Emirates (UAE). I don’t know much about the company fundamentally, but this looks like a classic “low and slow” bottoming pattern. Anyone that wasn’t scared out by the stock’s massive decline has been worn out by nearly two years of sideways action. If the stock can break above 5.60 decisively, I’d expect a new structural uptrend to begin.

That’s all for now, I’m headed to bed. Until next time!