Sunday, January 07, 2007

Creepy charts. Amrep Corp (AXR) and Empire Resources (ERS)

Every once and a while I see a chart and I say to myself, "wow I've seen this before". Check this one out. It goes follows nicely with my preoccupation with market leaders right now.

Amrep Corp (AXR) is currently sitting at the number 1 spot on the IBD 100 and has made a huge run in the last few months. (No one should be touching this stock right now. It only has a 1.6 million share float and has 81% of that float shorted. Crazy.) Now check out Empire Resources (ERS). This was at the IBD 100 number 1 spot just before the May top of this last year. The similarities to the AXR chart are uncanny. Its downright creepy.

Now look what happened to ERS. What goes up must come down. I have no doubt that the same thing will happen to AXR. The important thing to remember is that the market tanked a few days after ERS did. I don't know if the same thing will happen with the market today but I'll be ready for it when AXR crashes.

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