MCP has been an active stock for us this month.
Thursday, January 2nd I took off the second half of the MCP trading position which was great timing as CNBC's fast money had just done a fluff piece on it, that was a gain of about +32%.
I said I was leaving the core long position in place and also later opened a January $5 Call position, I've been waiting for a new opportunity to go long MCP in the trading portfolio and I think that is coming up.
There are some changes in character since the pullback toward the November/December base breakout area and I think MCP is putting itself back together again. In fact, I'm very close to opening at least a partial trading long, I'm just looking for a chart or two to give a better timing signal, but I think the area is just about right, other than the always probable head-fake move at the bottom of an upside reversal.
You can see the November/December base and breakout which is low in a much larger base MCP has been putting together. The bigger the base, the more support there is for a strage 2 trend so I really like MCP as a longer term position, likely a trending trade which is why I didn't want to touch core/trend long MCP positions, only trading ones.
This is from the breakout of the Nov/Dec base to the pullback with a nice channel. I think I showed last week how a 2-day X-Over Chart fits the character of MCP and the pullback is to the 10 bar yellow moving average thus far a would normally be expected.
In the yellow box you can see the Rate of Change is falling off or just apply the indicator to price. We're starting to see more of a lateral reversal process which is great.
The daily 3C chart and the full base is very impressive so I think this is a long that can work for quite a long time, we haven't even come near stage 2 yet.
This is the hourly chart so there's a huge divergence even locally on the smaller base, again, this is why MCP is one of my favorite long positions and as soon as the CNBC fluff piece came out, I knew it was time to get out for the short term, a day later we were pulling back, what's that tell you about CNBC?
Intermediate, the 10 min chart was in good shape and on the pullback remains in good shape, this is what I want to see broadly to know that this is still strong, nothing has changed, but it's not effective for actual timing of a new position.
The 10 min chart is more detailed showing the area of distribution that led to the pullback, essentially right at the CNBC Fast Money mention (long-lovers) and the positive divegrence building since.
The 3 min chart is even more detailed, you can see the rounding/reversal process in to a leading positive divegrence,
the 5 min chart looks EXACTLY the SAME so it appears there's migration from 3, 5 to 10 min with longer charts never having seen any damage.
This is really the only thing left, the intraday 1-2 min charts are in line, I'd like to see some sign that Specialists are stocking up for a move. We may see a head fake move of some sort which is typical of reversals and usually makes for a great entry.
In any case, I'd say we are real close to a new long trading position, an options position or even a core long position if you are interested. I'm guessing within a day (maybe today) to two or so, MCP should be good to go with new long entries.
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