Europe is not healthy whether looking at the Debt Crisis, Political Uncertainty, or the Poor PMI and Other Economic Data-points. In an effort to risk exposure to Europe I suspect the first stocks that will be sold by Institutions are the ones that will be impacted the most by the recession in Europe, and although we saw quite a few optimistic Q1 reports and forecasts, it seems the depth and length of this double dip recession in Europe may have been misjudged by many.
I am going to lay out some charts, noting some levels and targets, of the names I came across with high sales exposure to Europe. The numbers are rough estimates based on recent Investor Presentations, and mostly looking at long term charts with weekly candles, strictly price patterns, doing away with all of the other indicators. I surely will miss quite a few names, and feel free to contribute others. I will note the % of Sales from Europe with Each Name. Many of these names are Large Caps and considered fairly good values with high dividend yields, but as history has shown, cheap can get cheaper. If not interested in shorting, consider the target levels as a better long entry at least.
Philip Morris (PM) – 41% of Sales – $86.16 – A near parabolic move the past few years, but now threatening a trend break off the 2011 lows. Short Below $85.50 with $83.50 Initial Target, while a Break of that Level Can See a Slide to $79.
McDonald’s (MCD) – 39.7% of Sales – $91.87- MCD has already began to feel some pain and near a major trend break on the weekly, first Fibonacci at $89.25. A break of that level targets a return all the way to $81.25.
Kraft (KFT) – 32% of Sales – $39.06 – KFT currently is re-testing a key breakout and the Food stocks have been strong, but in a weak market a return to the $35 long term trend support level would align with a re-test of the 2011 breakout. Short at $39 with $35.50 Target, Wrong Above $40.
DuPont (DD) – 25% of Sales – $52 – DD is another stellar Co. but a break of short term trend support, say $51.50 and a move back to $48.50 the Target, and Plenty of Resistance Overhead at $54 and $55.
International Fragrances and Flavors (IFF) – 35% of Sales – $58.32- IFF forming large descending triangle and failed at resistance recently. Short Below Week Lows at $57.50 with Target 1 at $55, while Return to $51 Possible.
Intercontinental Excahnge (ICE) – 40% of Sales – $125.05 – ICE is in this rising wedge long term and sits on its 50% Fibonacci. Short Below $122.50 with $112 Target.
IBM – 33% of Sales – $200.60 – IBM with a tight rising wedge that appears long overdue to break. Playing it safe would look to short below $196 for target 1 at $188, Target 2 at $182.50.
Owen Illinois (OI) – 40% of Sales – $21.84 – OI shares topped out right at a re-test of a major breakdown from 2011 level, and look ready to roll right back over. Only problem here is limited downside remains, target of $20.
AutoDesk (ADSK) – 40% of Sales – $36.18 – ADSK chart looks real ugly, earnings next week, broke uptrend to start this week. Shares could slide back to $32.85, or even $30.50.
Pall Corp (PLL) – 39% of Sales – $57.91 – PLL with a long channel up and a move below $56.20 Targets $53
Illinois Tool (ITW) – 31% of Sales – $56.33 – ITW is way extended from its long term trend support, and is showing signs of topping. A patient player waits for $54 to break with a target return to $49, while aggressive short can enter here.
Accenture (ACN) – 44% of Sales – $58.70 – ACN has already felt the pain thanks to the CTSH report, so actually like this one on weakness as a long near $55.50, as the stock is worth $70. A short can likely squeeze 3 points out of it here still.
Priceline.com (PCLN) – 45% of Sales – $681.11 – PCLN set up well as a short today on its morning move through $700. Trend support and 23.6% Fibonacci both point to $625 as a target.
Harman (HAR) – 60% of Sales – $42.08 – HAR put in a triple top and $39 target for trend support, while it could get ugly and look to form a horizontal channel, extending back to $29 support.
Borg Warner (BWA) – 56% of Sales – $77.29 – BWA first support comes in a $73, and below that can slid back to $65.
Johnson Controls (JCI) – 35% of Sales – $31.79 – JCI shares trading in a tight range, but below $31 this can get nasty back to $26/$28 range.
Western Union (WU) – 40% of Sales – $17.28 – WU looks ripe to roll over nad fall back to familiar support at $14.50/$15
Coca Cola (KO) – 22% of Revenues – $77.41 – KO is loved but is very extended, a soft drink stock rarely goes parabolic. Short 1/2 here at $77.40 with a target return to $72 and add 1/2 if it reaches its $79.30 Fibonacci extension target.
Paccar (PCAR) – 36% of Sales – $39.45 – PCAR has already come down quite a bit and may want to wait for a weak bounce back to $42.50 as $37.50 is trend support, so reward/risk not as favorable here. A break of $37.50 and $35 the next stop.