Fed Tapering Commentary, DJIA Chart, Graphite Stocks (NGC, GTI, GRPH, USGT)

Smart comments by PIMCO's Mohamed El-Erian:



We remain convinced that the Federal Reserve will begin tapering its "QE" program much sooner than most would believe.  Few believe it'll start this week, or even this year.


Yesterday we wrote that "the DJIA will probably be closing above the key trend line discussed in our last update".  It did not.  That key level is 15500 at present, and the DJIA closed at 15494 today. 

Below is an updated chart of the Dow Jones Industrial Average, only small difference from the past being that the uptrend line is now drawn along the closes rather than intraday extremes. 

We cannot become bullish unless we see consistent closes at new highs, above the horizontal red line.

A few graphite stocks worth considering.

We like the graphite/graphene story, however a bright future for the material does not mean companies purporting to be, or even actually having operations, in the business of mining graphite or developing technologies utilizing graphene will enjoy share price appreciation.  This is especially true since that sector already enjoy a relatively recent big pump and subsequent dump via all of the usual persons and outlets. 

Some stocks in that sector are enjoying a mild resurgence, and have piqued our interest.  We offer charts of a few of them.


NGC, Northern Graphite Corp. (previously featured earlier this month, and we've since gone long at $0.80 which has not been diarized in this blog):

GTI, Graphtec International Ltd. (10-year and 1-year views):

We're long GTI at an average of $8.30 (not previously diarized in this blog), and holding above the uptrend line shown in the 1-year chart seems reasonable to us.


GRPH, Graphite Corp.:

We're long GRPH at an average of $0.085 (not previously diarized in this blog) and feeling better about it now that it has closed above the highs of the previous eight weeks. 

This current spike higher could prove to be something short-lived similar to what's circled in red, however we're compelled by the broken downtrend and have no planned stop level for now.


USGT, USA Graphite Inc. (previously featured in August):

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