Update: 11/19 11:40AM  – STOP HIT – Flat Position

The CIG long was stopped out at our 3% risk price level of $8.37.   Heavy selling at the ask brought the stock down from the 20day EMA.  It may find support and put in a base before breaking out, and the proprietary indicator seems to support additional upside, however for the risk parameters of this portfolio we are neutral on CIG until a new signal is generated.

11-18-2013 10:33am  (via email)

Signal: LONG @ $8.61

Stop: 8.31 (3.5%)

The algorithm went long CIG (Companhia Energetica de Minas Gerais – a Brazil utility company) this morning at 8.61.  The stock has been beaten down from a March high of 13.60 and this could be the start of a retracement.   Bullish news appears to be materializing as well, and the utility sector as a whole could see upside if taper chatter increases and markets enter a period of turmoil.  The stock has been added to the subscriber portfolio.

Because the stock is trading around the 20day EMA and a key Fibonacci level, it might be basing before rising and could be another day or two before it breaks through.  Intraday traders could use this opportunity to buy on dips.