NAVISTAR (NAV) MONTHLY BUY with Economic Indicators

29 мар. 2015 г.

Entered long based on a monthly pullback and because it is a low risk/reward trade. I plan to hold this for 3-6 months if it goes in my favor, which, in turn, would mean that my fundamental understanding of economic indicators is right and makes more sense than short-sighted view in the media; the media which is no sound guide, but entertainment in terms of investing in the US economy.

- The volume and the price clearly shows signs of accumulation (bear candle with low volume and Indecision bars with increasing volume), and a monthly entry signal right at the 50% Fib level. I entered using a daily chart to it going on at a deeper level and get in at a smaller price range.

-This is a small risk/reward trade.

- This stock, Navistar (NAV), is a manufacturer of buses (including those yellow school buses), military vehicles, commercial trucks, defense vehicles and engines. Although Manufactured Durable Good orders showed a 1.4% decline in February 2014, I believe that the decline is not accelerating and that there is nothing to worry about since the US economy as a whole is in expansion mode. This will ease and/or level off this decline (it is actually growing if you take the average of a few months anyway!!).

- The trend in durable good what 2% increase in January 2015, and if you look at the overall trend greater than just two months back (5 or 6 months back), although Feb 2015 showed a negative like, orders are on the rise, esp. durable goods ex-transportation orders!

So, I am against all the temporary scared jolts of these "so-called investors" that I keep reading about (who ever they are). They may have cause to worry, but not too much.