EARNINGS: 7-30-08 STATUS: Test 18 day EMA. Finished the week at the 18 day EMA on low volume. Looks as if that is the bottom of this test and looking for CMI to put the break higher in for us this week. To recap: Surged higher to end April, rallying on its earnings out of a 15 week base. Rallied to 74 on the breakout run and is now testing near support at the 18 day EMA (67.23), tapping that level on the low and rebounding to close flat. Nice low volume test shows few sellers. Looking for CMI to continue its move higher off of this test with a good shot of volume. Volume: 2...
Look at the earnings per share, growth assured as "best of class" and the psychology of Joe America's desire to own a "Cummins" and this is a solid BUY. My target is $135. Good luck, everybody!
Cummins Inc. has had an unbelievable run so far this year. It is up 102% YTD versus 107% over the last 52-weeks. It is 17% above its 50-day moving average, and 58% above its 200-day. All technical measures indicate that CMI is overbought, and we should expect it to consolidate in the near future. More recently it appears that there has been some price resistance at $120, where it has made a double or even a triple top. Underlying this price resistance it ALSO appears that the stock has made a "bullish flag" since its rally on 7/9. You be the judge on the chart.
Looking through some of the pundit discussions, we saw that Jim Cramer was commenting on Cummins Incorporated (CMI) Tuesday night. Cramer quickly laid out some thoughts (as he normally does) stating that he thinks it's a great company, but now would not be the time to buy the stock. It also had its ex-dividend date of Wednesday, so that ship has sailed as well. With a current dividend yield of about 3.24%, this was not an insignificant opportunity.
As with most “lightening round” discussions with Cramer, or any pundit, we have real concerns with “Sound Byte Investing” as we have come to ca
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