Wednesday, February 11, 2009

Short Oppurtunity in the Brewers

I noticed that some of the brewers were rallying up to their declining 150 day moving average, which usually provides significant resistance. Below is a weekly chart of the industry group.


One brewer I isolated was Ambev. ABV has been consolidating under it's declining moving average on lower volume. Below is a weekly chart of ABV showing the longer term trend.


I'm thinking about shorting ABV here with a stop above the lower highs. The horizontal lines in the chart below show the lower high levels. As I already mentioned, volume has declined throughout the consolidation pattern and it is also overbought at this point.

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