Week 2 of a quandary where ever chart looks broken, nothing looks buyable, but my analyses of the broad indices is indicating that I should buy this week rather than sell. Of all the screens I ran, the best chart I could identify was that of Hudson City BanCorp (HCBK), so I grab my nose and take the plunge.
Fundamental Analysis
HCBK has a much worse growth picture than its competitors. However, HCBK
went through the entire financial crisis with a clean bill of health, so I'm not too concerned. It's still expected to grow in the double digits year-over-year. Its operating margins blow away the competition at 82%. Its P/E is significantly below the industry average. Finally, the PEG ratio, which is extremely important to me in analyzing stocks is below 1 at .56 and blows away the competition (2.43).
Technical Analysis – Weekly
Again, I'm picking the best of a bunch of garbage charts, so I must say that I'm not completely impressed. The RSI is only redeemed in that it has been repeatedly touching traditional support at 50 and has held. The only other redeeming factor is that the price relative to the Wilshire 5,000 has stabilized, flattened and may be starting to outperform the broad market. If you look at the volume by price, the price has cleared most of the heavy volume resistance areas.
Technical Analysis – Daily
RSI has no bearing on anything happening with the stock. The price seems to have tested the 200-day moving average and recovered. However, the volume during that recovery was mixed. I would have rather seen a lot of volume on the recovery. Yes, the first time and no the second. The price relative to the Wilshire 5,000 has recently lagged the market, a negative. So has the Chaikin Money Flow, also a negative.
So as you can see, I'm not all that excited, but maybe, just maybe, when all charts look so broken, this might be the time the market roars back. Just following what my system tells me. I'll report back on this one in 90 days.
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