Saturday, May 17, 2008
Owning a piece of American history
Yesterday i bought a tiny slice of american history. I bought stock of one of the oldest institutions in America...The NYSE (NYX). NYX broke out of resistance at 70 on May 6th after it reported earnings. The earnings call mentioned that the NYSE/Euronext merger was going well and that they have realised only a fraction of the costs in savings so far. This is definately good news since this market held down the NYX stock for all of this year and 2007 on the belief that the merger wasnt going as well as planned. However, Euronext has seen its highest average trading volume last quarter as well as the NYSE (3.06 billion). The stock broke out of resistance at 70 on high volume and has had a textbook low volume pullback to test the breakout. I bought some tock at 71 yesterday. This struck me as a very low risk/high reward strategy. The stock breaking down below 70 on high volume presents a quick exit.
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