Stocks This Week: Buy Microchip Technology And Facebook

Next week is OPEX week which has had a positive expected return in the month of November. The market has historically closed on the upside with most of the strength manifesting later in the week. The short-term cycles suggest that Tuesday-Wednesday will be corrective. The market is a bit overbought and in need of some consolidation, but the downside is limited.

The Microchip weekly cycle bottoms on the 5th. All five buy signals have been successful in the prior year. The stock is likely to rally to back to the $100 area or higher by mid-December.

Chart 1

Chart 2

The weekly Facebook cycle turns up now and tops in late December. There have been 6 buy signals in the last year and all have been profitable. This is a period of seasonal strength. From October 10th to December 26th, the stock has risen in five of the last seven years for an average gain of 12.3%. Chart 4 shows the weekly technical picture. Momentum has turned up. The share price is likely to break out of the formation that we see below, as has the NASDAQ 100, Apple and Microsoft. A break through $200, which appears likely, points to much higher prices.

Chart 3

Chart 4


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I bought my first stock in 1966 and then obtained my BS in banking in 1971 and MBA in corporate finance in 1972 from NYU. A study cycles began in the same year. A 9-year...