NFTRH+; Updating the Fanuc Trade

Robotics and Robo-Machine (a fancy name for a small, light and lightning fast Machining Center) maker Fanuc (FANUY) is consolidating its near relentless gain since it was highlighted on January 10.  Having released earnings, that component of the play is over.  As for the currency component, the Yen has been firm lately.  The original post was hopeful for “a pop to 22 or 23”.

At a gain of a little over 12%, I’d be happy to take the profit, which I am considering (in light of ongoing portfolio tweaking and balancing).  But the daily chart, while overbought, is bullish as it perches above the October high.


What’s more, the stock has broken above what could be considered a neckline to a bullish pattern (w/ 19 being the key support) within an uptrend channel.  The implied target measures as high as 24, over time.

xjy and fanuy

So it is a tough decision; am I investor/long-term trader or am I greedy profit taker?  I guess we all have to ask ourselves these questions and live by the answers.  Another factor in the equation is that as noted in a post on Jan. 26, the Japanese stock market has come to our upside target (52, using the currency hedged DXJ).  Targets are not stop signs, however.  They are objectives.

So it all comes down to the Yen.  If this is an ill-fated bounce as with the late 2014/early 2015 example on weekly chart, Fanuc could have much higher to go, along with the Japanese stock market.  If it keeps rising however, it would be a headwind on these items.

So there are a lot of questions.  But one fact is that a paper profit is in place since the original highlight.  If I do sell it, it will be due to sticking with the discipline of maintaining cash levels while rotating into other items of interest, including Fanuc’s cousins in the progressive end of the US manufacturing industry, FARO and SSYS, in light of a weakening US dollar.

Another option is to hold Fanuc, sell something else and consider FARO and/or SSYS (after taking a closer look).  Just thinking aloud here because this is the way I manage my portfolios.  Mainly, I wanted to call your attention to Fanuc’s profitable status, still bullish chart and state of the Yen (which I’d want to see weaken soon in order to be bullish Japanese stocks).