When the Fed chief talks, everyone listens, including investors all over the world.
The U.S. market posted its follow-through day Thursday, putting in play those top-quality stocks you've been tempted by for weeks ? including foreign issues.
One could have expected a rush for foreign stocks even before the opening bell rang. Fed Chairman Ben Bernanke's remarks Wednesday afternoon sparked an explosion in Asia's markets.
Taper-fear relief sparked huge gains in the Shanghai composite (up 3.2%), South Korea's KOSPI (up 2.9%), Hong Kong's Hang Seng (up 2.6%) and Taiwan's Weighted index (up 2.1%).
The Nikkei lagged with just a 0.4% gain. The Bank of Japan opted to refrain from adding to its stimulus actions, a letdown for those who had hoped for more.
South Korean chipmaker MagnaChip Semiconductor (MX) shot up 2% in fast trade. The stock regained its 18.35 entry from a 12-week consolidation, and now stands 3% above that trigger. This second-stage base is undefinable, which is a negative.
"Affordable luxury" fashion house Michael Kors (KORS) added a fraction in slow trade. The stock stands 3% above its 62.35 cup-with-handle buy point.
One has reason to be careful with Michael Kors. The stock has already failed from that trigger twice. Maybe that will turn out to be an especially powerful shakeout, or maybe something's wrong.
Realize, too, that Michael Kors has issued three secondary offerings in the past 16 months. Few things can cast a chill on a hot stock like a wave of new supply.
Cayman Islands-based Herbalife (HLF), the network marketer of nutritional, fitness and skin-and-hair products, also tacked on a few pennies in quiet volume. Herbalife shows a seven-week consolidation. That's long enough to earn status as a base, but what kind of base?
Like MagnaChip, the pattern is undefinable. One sees choppy moves on the weekly chart (another negative), although the pattern sits nicely on the 10-week moving average.
Earnings rose 44% in Q1, its highest in six quarters. But sales growth has been subpar during that span. And long-term debt-to-shareholder equity, which is up to 103%, is nearing the red zone.
Shares of Toyota Motor (TM) climbed 2% in dull trade. The stock shows a cup running just 14% deep. The buy point to this third-stage base appears at 131.09, just 1.4% above Thursday's close.
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