This week, three of the portfolio holdings ranked in the Top Ten: PII, PPG, and SJW.
| Ticker | Account Value |
| PII | 1,300.56 |
| PPG | 3,169.04 |
| SJW | 2,864.61 |
The lowest amount belongs to PII which last traded at $54.19. In addition to the usual $250+ weekly amount, there is another $256.18 of income available for reinvestment. Therefore, I will acquire 9 shares of PII on Monday. Please see the post on 2025-01-04 for a high-level look at PII’s performance over the last 16 years. Below, is the purchase history and average cost calculation.
The market continued to sell-off on news that more jobs were created in December than expected, continuing a 48-month streak of job growth and very low unemployment. PII was no different. It continues its tumble from $138.49 on 2023-07-27, down a mere -61%.
With the Relative Strength Indicator (RSI) at 32, PII is nearing oversold territory (RSI < 30) on a monthly basis. This happens maybe once a decade. How far could PII drop? My guess: to that $37 mark. Should it get there? Of course not. But should the broader market sell-off on even more good news, then I don’t see buyers stepping up until the valuation reaches absurd levels.
A Trace Left Behind
Most technical analysis lends itself to the short term or intermediate term. However, I believe there are instances where a stock seems to hit a ceiling or find support at levels not seen in periods best measured in years. It isn’t so much that there are appreciable levels of investors still around who bought or sold at such points which could trigger reversals or the buildup of pressure, but rather there is a residual memory, an imprint left behind when the stock first (or last) hit that level. Then years later, when economic cycles have done most of the work moving a stock in a certain direction, such a price level once thought to be unattainable or left behind for good, draws a stock towards it like a magnet, and in so doing, draws attention and amplifies awareness.
No one cares if PII climbs from $80 to $120 or falls from $120 to $80. That happens routinely and it’s boring. But if PII were to fall to $37 like it last did during the pandemic sell-off, it won’t go unnoticed. And at that point, a decent earnings report will send it back from whence it came.
Although it may be an unpopular opinion, and from someone who sees little practical value in technical analysis, the notion that price points from years ago act as magnets, reversing polarity upon contact, is unlikely to gain traction.
But why write what everyone else writes?