Detailed Prognostication on FPL

Today was a negligibly negative day in the market. That being the case, not much happened to my positions. So the majority of this post will be about prognosticating one of my favorite stocks, FPL.

As an update, NG pulled back a little but is still in contention for assignment in 30 days; CVX also pulled back a little but still contains profit; DIS advanced up a little more (and I did tighten the stop before the open as I was considering in the previous post); and T declined further executing my stop. Unfortunately the sale proceeds of my T option were for a loss and too small to give me much buying power for the immediate future. In addition, after doing the math on it, I have come to the conclusion that I really should keep my stops tighter than what I set them because the gross loss is a lot more than I truly wish to loose. I am thinking it would be wise to also subtract the cost of commissions from the multiple of the percentage I am willing to lose and then reverse calculating the stop point and setting it appropriately.

Now on to FPL. Today, it put in a short-body down day with a long upper shadow, not quite doji like. It's position in relation to the previous day is that of a bearish harami. That is, the body of it's price movement did not travel outside of the open and close of the previous day which was an up day. This is only one point determining future direction. The other indicators I watch, however, are bullish still because they average the previous movement of the stock. Without a change of direction in these indicators, the future movement is uncertain. But there are a few indications of possible movement which I will cover next.

The first indication is the general direction of the next largest trends. The next largest trend of the stock is punctuated by lower highs and lower lows. When we see lower highs and lower lows we describe the stock as having bearish momentum. This momentum needs to be broken before it is officially a bull candidate in my opinion. As of this post, FPL is still riding below a lower high trend line. If it breaks this trend line tomorrow, I would consider it a buy for a short term swing trade ($1 in about 4-6 days). However, if it continues lower, I will assume it has tested and failed this trend line and head toward the trend line of the lower lows. In this case it is a significant drop of about $3-$5 in ten days, which would make it a candidate for a Put Play.

Next we have the trend of the peaks and valleys of the secondary indicators. For example, two of my indicators are the Slow Stochastic and MACD. Only one needs to break it's trend before I officially consider it a bull candidate. However, if the other is contradictory, I will proceed with caution. FPL, as of this post, has broken the MACD trend line that I have identified and the Slow Stochastic trend line is well above it's current position and too flat, in my opinion, to be weighted much in my prognosis. That being said, I am more inclined to believe that the stock will go up. That is my opinion, you can take it or leave it.

Disclaimer: See bottom of page.