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Feb 04

Say It’s Alright Joe ($JOE)

It’s not often we need to go back 8 years on a chart to show the context of a trendline break but it’s the case here with St. Joe ($JOE). There’s been many false dawns on this recovery story, punctuated with the high-profile hedge fund interest of Bruce Berkowitz’s Fairholme Fund starting in 2007 and culminating in boardroom disagreements and his taking control of the company in 2011.

As a technician, we learn that making a distinction between a company and its stock is essential if we are to remain objective in our analysis, recent investors and traders in Apple ($AAPL) know what I’m talking about. So let’s leave the company balance sheet analysis to others and let’s take a look at the stock.

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That’s some trend and volatility. If you’ve owned it since ’05 you either have no stop or strategy, or you’re a member of the board (and you’re probably considering selling the stock now before it goes down again.) Good. For the trend followers among us however this is where it starts to get interesting.

Let’s look at the last year in more detail. You can see the significant upside volume we had accompanying the move of the lows that took us over the descending trendline. It then retraced most of the move in low volume while staying above the trendline as if to kiss it goodbye before resuming the current uptrend. Notice the accumulation days, rising on increased volume, that continue to appear throughout the move. Higher highs, higher lows, that’s what we want to see and with continued signs of accumulation. Should it pull back a bit further there’s support in the $22-23 area but with bullish divergence appearing intraday (not shown) I can happily get long here.

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PS. Shout out to anyone who got the Genesis reference in the title.

 

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