January 19, 2024

(BERKSHIRE HATHAWAY REWARDS THE PATIENT LONG-TERM INVESTOR)

January 19, 2024

Hello everyone.

The Magnificent 7 have been stealing the spotlight for a significant period, but there are many other stocks worthy of attention too. One that deserves a look right now is Berkshire Hathaway. Berkshire has displayed bullish technical characteristics throughout its history: it has made higher lows, constructed bullish chart patterns, broken out, made new all-time highs, and extended after breaking out.

In the monthly chart below, BRK.B has had five major breakouts through to 2021. As we can clearly see, some of the bullish patterns took years to form, but the stock has come back each time. More importantly, each comeback has reclaimed a former high point and continued higher.

The stock is now trying to extend beyond its former 2022 and 2023 high points, which could be “major breakout number six.” The last few attempts in late 2023 failed to attract enough interest buyers to push beyond the $360-$370 zone. We are waiting for BRK.B to regain its footing and move higher. While past performance is no guarantee of future returns, patterns within long-term trends tend to repeat themselves in some form or another.

BRK.B has been trading within an upward sloping channel lately, making higher highs and higher lows since bottoming last fall. If demand does not return relatively soon, then respecting the rising 200-day moving average would be the next best thing. That’s currently near $345.

BRK.B last pushed to a new high vs. the S&P500 in late 2018, but that breakout didn’t hold. It’s since outperformed the index from the summer of 2020 and now has returned to a resistance zone that dates all the way back to 2008.

So, when the stock does make another new all-time high, it could be breaking above a 16-year trading range relative to the S&P500, as well.

Keep scaling into Berkshire. If it gets down to the 200 MA at $345 buy with both hands.

This picture was a feature wall behind my bed in a hotel I recently stayed at on the Queensland coast. A fun way to represent the sunny and laid-back state.

One of our beautiful gold coast beaches at sunset.

Cheers

Jacquie

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