Feb 2009 Upside Down

Late in February 2009, I posted charts of some big losers that were showing signs of reversal. BAC, C and WFC. I want to revisit these losers, because over the last 6 months they have been big winners. Some have done fantastically, some merely great. BAC has more quintupled. C has more than doubled and WFC has tripled. That is one way to juice up the performance of your portfolio. I am early here, but I am beginning to see signs of similar formations, only in reverse. To visit the February post, navigate here. The weekly BAC chart shows a significant reversal. Some of the caveats are that quite often (as happened at the Feb-Mar bottom) these reversal patterns will occur back to back at lower lows or higher highs, with the second occurrence indicating the exhaustive move. We may be seeing the first of these moves here with BAC.

Also, note the momentum divergence. Some of the problems with this interpretation is that although volume was slightly higher than average, it was not excessive, say double normal. So it may pay to look for another reversal at higher levels, above 19.10.

C is a less impressive picture and I will let the charts speak for themselves.

WFC displays a stronger picture, but the daily is showing a potential "triple" momentum divergence along with a potential false breakout, while the weekly shows a potential reversal pattern on higher volume. Again, the volume was big, but not huge.

Some things to watch over the next few weeks and see if more signals develop.