Chartology: Concern & Caution In '08


As the Street braces for a new year, we asked a widely followed technical analyst what concerns her most for '08.

Esteemed technical analyst, Louise Yamada runs her own firm, aptly named Louise Yamada Technical Research Advisors. She joins the panel for this conversation. Following is a synopsis of her main points.

Financials appear, technically, to be in a structural long-term decline says Yamada as she interprets the trend lines on charts depicting S&P Diversified Financials, S&P Regional Banks and S&P Diversified Banks.

In fact, their charts appear very similar to S&P Computer Hardware in the 1980s, she says, which were declining, then rallied - only to fall again to under-perform for nearly a decade!

Sell into any rally she concludes; don't bottom-fish the financials here. Financials typically lead the overall market, They’re totally correlated.

However, if you’re looking for a buy you might consider Pepsico (PEP). Yamada is bullish on this stock because she sees a long-term uptrend. If nothing else, it’s a place to hide she says.

For an in-depth analysis of Yamada’s charts please watch the video.


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Trader disclosure: On Dec. 17, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (YHOO), (DIS); Najarian Owns (BIIB); Najarian Owns (GOOG) Options, (TGT) Options,(YHOO) Options; Finerman's Firm And Finerman Own (FLS), (GS); Finerman's Firm Owns (TSO), (VLO), (WMT), (YHOO), (AEO), (DVA); Finerman's Firm Is Short (SPY), (IWM), (IYR), (IJR), (MDY), (MBI), (SUN); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Owns Russell 2000 Puts; Finerman's Firm Owns (MSFT) Calls; Yamada Owns (KO)