The market bounced back today and recovered most of last Friday's loss on even lighter volumes. It is likely that the rebound will continue throughout this week as people look for the santa rally. Short sell at the current levels is probably risky, but swing long could be riskier. I will look for some day trades at both direction if I have key S/R back them up.
1. AAPL: consider L3 use 80.9 as stop, IT=MA50=83.9.
2. AKAM: L3 on bottom if it spikes towards 51/52 use tight stops.
3. BIDU: CTT between 110 and 116 use tight stops, don't trade the mid range.
4. DVN: CTT between 65 and 69.1 (MA50) use tight stops, don't trade the mid range. MA10=69.3
5. ESRX: L2 on bottom use MA10=71.6 or MA50=70 as stop references.
6. FMCN: L2 on bottom use MA50=65.1 as stop reference.
7. GOOG: S2 on top if it spikes towards MA50=466.7 (MA10=466.5) use tight stops.
8. RIMM: L2 on bottom if it spikes towards MA50=124.5, but also watch for S3 on top if it spikes towards today's high at 130 or MA10=131.5.
9. SHLD: S2 on top if it spikes towards today's high=168 or MA50=170.7 (MA10=170.5) use tight stops.
10. STP: L1 when it breaks 33.5 with a stop just below 33, IT=34.25. Or what for pullback use 32.5 as stop.
11. UNH: L1 on pullback if it spikes towards MA10=52, or around 50.5, and finally MA50=49.6.
Tuesday, December 26, 2006
Daily Calls -- Weds Dec. 27, 2006
Saturday, December 23, 2006
Weekly Calls Dec. 16-29, 2006
On last week's trading calls and executions:
While the W/L ratio for the weekly calls came in below average at 1:1 last week, the ratio for the daily calls reached near 3-month high at 3.3:1. On the execution side, I started the week quite positively as I successfully overcome the "fear" factor on several occasions and made the right decision. However, the old problem regained its footing as the week progressed. The frustration further induced some mental mistakes late in the week and in the end turned a promising week into a disappointing one. Nonetheless, I did have some success in dealing with the "fear" factor this week, and each time I did it, it felt extremely positive. I will continue to focus on the issue in the coming days. In addition, I need to avoid some low-level mental mistakes. I plan to write up some simple trading guidance/rules that I can refer to before start of each trading session.
On the market:
The market fell pretty hard last week. The divergence between NASDAQ and SP500/DOW finally went to bears' way, as NASDAQ led the decline with a over 2.2% weekly loss. On the weekly charts, for the 2nd time in past four weeks, bearish engulfing candles were formed for both NASDAQ and SP500. Bearish divergences of Stochastic and MACD histogram are also clear for all major indices. The action in NASDAQ is particularly ominous for bulls as it failed to break the Nov. high again and now poised to test lower boundary of the 6 week trading range near 2388, as well as MA50 around 2391. On the daily charts, similar cases can also be made for all major indices, especially the NASDAQ which seems to form a double top. Some basic statements can be made here:
(1). the momentum for the 4 month long up trend continues to diminish for 4th weeks.
(2). bearish divergences for all major indices become rampant.
(3). As the market leader, NASDAQ seems topping out.
(4). The reversal of the up trend requires, at the minimum, that NASDAQ closed below it MA50, something yet to occur.
On next week:
The market dropped almost every day for last week, and I expect some kind of rebound in next week, probably aided by the notion of the "santa" rally. While it is possible that SP500/DOW may make new highs in the next week or two, such feat seems difficult, if not impossible, for NASDAQ. At this stage, the following strategy should be taken into consideration:
(1). Don't go long with the break-outs.
(2). Don't chase the bears just yet.
(3). Actively seek the short-the-top setups for stocks that attempt to rebound.
(4). Play long-on-bottom for some very strong stocks that have fallen to their key support levels, but be quick when taking profits.
Trading calls:
Group 1 -- The short-on-top plays (No long plays allowed for this group)
1. AAPL: No long plays until it approaches 78. S1 on top when it appoaches key resistances: 84 (MA50), 85.6 (MA10), 87, 89.5-90. It has droped on high volumes for 4 straight weeks now, there could be some rebound, but big-boys' view and action on this stock is pretty clear.
2. AFFX: S2 on top when it spikes towards 24.5 (both MA50 and MA10), with a tight stop just above that level, IT=20.5.
3. CHAP: S2 on top, entry point 1 around 45.2 (MA10), entry point 2 just below 47, IT=40. MA50=43.5.
4. EBAY: S2 on top if it spikes towards MA50=31.5 (MA10=31.6), IT=28.5.
5. ERTS: S1 on top if it spikes towards MA200=52.8 or MA50=54.5 use tight stops, IT=49.
6. JCG: S1 on top if it spikes towards 39.3/40 use tight stops OR when it breaks 37.4, IT=MA50=35.9.
7. SHLD: S1 on top, entry point 1=around MA50=170.8, entry point 2=around 174. Also consider S1 when it breaks 167, IT=164.
8. TIF: speculative S3 on top when it spikes towards 43, stop just above 44, IT=38.
Group 2 -- The long-on-bottom plays
1. ADSK: L1 on bottom when it sparks down towards 39 (MA50) (stop just below 39) or 37.4 (stop just below 37).
2. AKAM: L1 on bottom when it approaches key support levels at 50, 50.5 (MA50), 51, 52, 53; use tight stops if larger size is opened.
3. DVN: L2 on bottom if it spikes towards 65, use MA200=64.2 as stop references.
4. ESRX: L1 on bottom if it spikes towards MA50=69.9 use a tight stop. MA50=73.1
5. FFIV: L2 on bottom if it spikes towards MA50=69.2 or 68 use tight stops.
6. FMCN: L2 on bottom if it spikes towards 65.5 use MA50=65 as stop reference.
7. LRCX: L2 on bottom if it spikes towards 47 with a stop just below it.
8. MDRX: L2 on bottom if it spikes towards MA50=26.1/25.5 use tight stops.
9. MRVL: L3 on bottom if it spikes towards 18.3 use 18 as stop reference, IT=20.
10. NVDA: L1 on bottom if it spikes towards 35 use 34.5 as stop reference, IT=37.5
11. STP: L1 on bottom, entry zone 30-31.6, use MA200=29.7 as stop reference. MA 50=29.3.
12. TOMO: L2 on bottom when it spikes towards 14.8 with stop just below MA50=14.5.
13. UNH: L1 on bottom when it spikes towards 53, stop just below 52.5. IT=57. MA200=49.9.
14. WLT: L1 on bottom if it spikes towards MA200=24.9 use tight stop, IT=28.
Group 3 -- The range-bound CTT plays
1. BIDU: L1 on bottom only when it spikes towards key support around 106.6 (MA50), and 110 use key stops. Also consider S3 on top when it approaches key resistances around 115.5, 117 (MA50=116.9), and 119.5. Don't initiate any positions that are far away from key S/R levels.
2. CEPH: CTT between 67 and 71 (MA50) use tight stops. MA10=71.1
3. RIMM: CTT between MA50=124.4 and 140 use tight stops,
4. SONS: CTT between 6/6.1 and 6.7/6.9 use tight stops, MA50=5.9.
5. X: CTT between MA50=70.6 and 75 use tight stops. If it closes below MA50, it may test 68.
Thursday, December 21, 2006
Daily Calls -- Friday Dec. 22, 2006
The NASDAQ bears finally gained up hand today, dragging down both SP and DOW with it. The chip sector is on the verge of breaking down, and it that occurs, the NASDAQ is likely to at least test its MA50 around 2391. Before that happens, the major indices are still well in the recent trading range and bulls still have the reason to buy the dip. Since several tech names released good Q4 reports and had sizable gains in AH (RIMM, RHT, MU), let's see if they can lead the tech rebound tomorrow. Given the anticipated low volumes for the remaining of the year, the major indices are likely to be range bound before 2007, which means, trading with key S/R may provide the best bets.
Focus list:
1. AAPL: CTT between 82.2 and 87 use tight stops, try not trade the mid-range. MA10=86.4, MA50=84.1.
2. AFFX: S1 on top use 24.7 (MA10)/24.6(MA50) as stop reference, IT=21.75.
3. BIDU: CTT at 114 and 119.5 use tight stops, also consider S2 on top near 116/117/118. Be quick to take profits the CTT stops moving in anticipated direction.
4. CEPH: S2 on top if it spikes towards 71.1 (MA50) use 71.4 (MA10) as stop reference., IT=67.
5. RIMM: reported Q4 in AH, beat the estimates and raised guidance, traded mostly between 139 and 143.5, key levels: 139-140 (key support and solid AH support around 139.8); 142 (AH resistance), 143.66 (recent 52 wk high), 143.5 (AH high).
Keep an eye on list:
1. AKAM: L1 on bottom if it spikes towards 53, stop just below 52.7.
2. FMCN: L1 on bottom if it spikes towards 65.5, stop just below MA50=64.8.
3. SNDK: speculative L2 on bottom if it spikes towards 42, stop just below 42, IT=44.3.
4. SONS: CTT between 6.44 and 6.88 use tight stops, don't trade the mid-range.
5. STP: L1 on bottom, entry point1=near 32, entry point2=near 31.5, use tight stops.
6. X: Speculative L2 on bottom, entry point1=near 72, entry point2=around MA50=70.5, use tight stops.
7. ENER: L2 on bottom if it spikes towards 35, stop just below 34.9, IT=38
8. CTRP: L1 on bottom if it spikes towards 60, stop just below 59.9.
Wednesday, December 20, 2006
Daily Calls -- Thurs Dec. 21, 2006
Once again, the market gaped up at the open,only to sold down throughout the day. It appears that the NASDAQ bears are holding on well despite the unfavorable seasonality pattern. It might be time to actively seek short-on-top setups with very good risk/reward ratios.
1. AAPL: S1 on top when it spikes towards key resistance levels: 87.1 (MA10), 89.3 and 90.
2. AEOS: CTT between 29.5 and 31.5 (MA10) use tight stops, bias is on the short side. MA50=30.8.
3. BIDU: CTT between 114 and 121, keep eyes on key support around 105.5, 116.5, and resistances around 117.8, 119.5, and 121.
4. CHAP: CTT between 42 and 45.5 use tight stops, bias is on the short side. MA50=43.5.
5. ESRX: L2 on bottom, entry zone 72 - 73.3, stop just below 72.
6. SNDK: CTT between 42.2 and 44.4 use very tight stops.
7. SONS: S1 on top if it spikes towards 6.85, stop just above 6.9; L1 on bottom if it spikes towards 6.2/6.3 use tight stops.
8. STP: currently long at 33.03, stop 1 just below 32.8, stop 2 around 32.3. L2 on bottom from 31.5 to MA10=32, stop just below 31.5.
9. UNH: L1 on bottom, entry zone 53.3-53.6, stop just below 53.
10. YHOO: S1 on rebound if it spikes towards 26, MA10=26.5, MA50=26.6, IT=24. It is breaking down here.
11. COGN: reported Q4 in AH, beat the estimates and raised guidance. Traded between 40.7 and 43, but mostly between 41-42.5. Key levels: 39.7 (MA50), 40.7 (AH low), 41.84 (day close, also MA10), 42.37 (day high), 42.5 (AH resistance), 43 (AH high), 43.55, 44.19 (52 wk high).
Tuesday, December 19, 2006
Daily Calls -- Weds. Dec. 20, 2006
Looks like a tug of war between the NASDAQ bears and SP/DOW bulls is intensifying. I am not sure if anything definitive will be determined before 2007, but I get a feeling that the market is going to be choppier than ever.
1. AAPL: CTT between 83.6 and MA10( 88), also consider S2 on top when it approach key resistance around 87. The bias is on the short side. It tested MA50 (84) today with success.
2. ADBE: S2 on top if it spikes towards 42, stop just above 42.3. May consider L2 on bottom if it spikes towards MA50=39.2.
3. BIDU: CTT between 115.5 and 119.5 use tight stops, try not to trade the mid of the range. Consider trade along the break-down if it moves out the range.
3. DVN: CTT between 65/67 and 70.8 (MA10)/72.5 use tight stops.
4. ESRX: L1 on pullback, entry zone 70.5-71.5, stop just below 70.5, IT=73.5.
5. GOOG: S2 on top, entry zone 469-477, stop just above 478.5.
6. MDRX: L1 on bottom if it spikes towards MA50=25.9, stop just below it, IT=28.2.
7. NTRI: CTT between 61.2 and 67.5 use tight stops.
8. RBAK: L1 on pullback use MA10=19 as stop reference.
9. SNDK: L2 either when it spikes towards 42.3/43 or when it breaks 44.4 use tight stops.
10. SONS: CTT between 6.2 and 6.7 use tight stops. DT bias is on the short side.
11. STP: L2 on pullback, entry zone 31.5=32.8, stop just below 31.5.
12. UNH: L1 on pullback, 51-52, stop just below 51. It is approaching its 6 month high around 52.84.
13. X: L3 on bottom if it spikes towards 72 or MA50=70.4 use very tight stops.
Monday, December 18, 2006
Daily calls Tuesday 19, 2006
The market gapped up in the morning, but once again was systematically sold down and closed in red by the end. The bearish action was particularly evident in NASDAQ, which failed to break the Nov. high last week and now seemingly leading the way down. Looking at the mini-breaking down of some leading tech names (AAPL, GOOG), I start to doubt if the NASDAQ can hold steady before Jan. 2, 2007, let along rise above its Nov high.
1. AAPL: CTT between MA10 (84) and MA50 (88), also consider S2 on top when it approach key resistance around 87. The bias is on the short side. If it breaks down MA50, it will test next support around 82.4.
2. ADBE: S2 on top if it spikes towards 42, stop just above 42.3. May conisder L2 on bottom if it spikes towards MA10=40.6 or MA50=39.2.
2. AKAM: L2 on bottom if it spikes towards 53, stop just below 52.7. MA10=53.9.
3. AMZN: L3 on bottom if it spikes towards MA50=38, stop just below 37.7.
4. BIDU: CTT when it approaches key S/R levels, 110, 111, 116, 119.5, 121, 123, 125.
5. CRM: consider S1 if it breaks key support around 37.6, IT=35, stop around 39.1 (both MA10 and MA50). May also consider S2 on top if it spikes towards 39, use MA50 as stop references.
6. DVN: L2 on bottom, entry point 1=around 67.3, stop just below 67; entry point 2= just above 65, stop just below 65.
7. ESRX: L2 on bottom, entry zone 68-69.5, stop just below 68, IT=73.1. MA10=69.2, MA50=69.4.
8. GOOG: S1 on top, entry zone 1=465-468.2 (MA50), entry zone 2=4.72-4.77. It sure looks like breaking down.
9. MDRX: L1 on bottom if it spikes towards MA50=25.9, stop just below it, IT=28.2.
10. MEDX: L1 on bottom if it spikes towards 13.75, stop just below MA50=13.4, IT=16.
11. NTRI: speculative L3 on bottom if it spikes towards 59.6, stop just below 59, further support around MA200=56.8.
12. RACK: S2 on top if it spikes towards 32.2/33.6 use tight stops.
13. RIMM: L2 on bottom, entry zone 127-129, stop just below 127.
14. SONS: speculative S2 on top if it spikes towards 7, stop just above 7.01. Consider L1 on bottom if it spikes towards MA10=6.6 and 6.4, use tight stops.
15. STP: L1 on bottom, entry zone 1=33-33.5, stop just below 32.8; entry zone 2=31.5-32.4, stop just below MA10=31.5. IT=37.
16. X: L3 on bottom if it spikes towards MA50=70.2, stop just below 70.
17. SNDK: DT-L2 on bottom, entry zone 43-43.5, stop just below 43.
Saturday, December 16, 2006
Weekly Calls Dec. 18-22, 2006
On last week's trading calls and executions
The W/L ratio of both weekly and daily calls came in just above 2:1, which was not bad at all considering the volatile market we had for the past week.
Last week's execution, on the other hand, was terrible. Even though I planed the week before that I will force myself into the trades when a pre-planed setup arrived, but I largely failed to do that. In addition, I had multiple winning positions which I failed to let me run at all, often left more than 80% of profits on the table. I felt increasingly frustrated and disgusted about the fact that I just could not overcome the "fear" factor to stick with the well-thought trading calls and the technical signals. It is a terribly feeling the see such a gap between what I am capable to do and what I actually did. I really really need to come up with some concrete protocol to tackle this psychological issue.
I have been dissecting my decision-making process. I think that when I abandoned the plans, I was griped by the fear of losing. Specifically, fear of losing profits for the winning positions, or fear of suffering loss after entering a setup. Now, let's look at the facts on these two types of fear:
** The fear of losing profits for the winning positions: there is no doubt that sometimes, had I not taken the small profits, I would've lost the profits or even incur small losses. However, if I stick with the trading plans and always let the winners run, very likely that at least 50% of the winners would generate at least 3 times more of the profits, which should more than enough offset the possible loss of the small profits or even small loss resulting from the existing practice.
** The fear of suffering loss after entering a setup: it is true such risk always exists, however, the W/L ratio of my trading calls have been basically around 2:1 or better, which means if I act on every call, the winning chance beats out the losing by 2:1. What's more compelling is that I often have a very close by stop-loss point for each setup, which means that the loss is very limited even if the trade fails. On the other hand, if I can let the winners run here, the actually W/L ratio would be substantially larger than 2:1 dollar wise.
The problem right now is I am almost unwilling to take any losses, which obviously is not right. Whenever I face a decision to act on a setup, I find myself obsessed by the potential loss instead of the possible gain. This is a very negative thinking pattern and I really need to snap out of it. One way to minimize the fear of possible loss is to cut down the size of the possible loss. This can be done by two measures:
(1) use smaller size, such as 100-200 shares and
(2) act only on the setups that have a very tight stop-loss point AND a good risk/reward ratio (1:3 or better).
Knowing that the possible loss is small and limited, I may then be able to free up my mind and focus only on the technical signals.
Whenever I have a winning position, I fear the profits will evaporate, and such fear drives me to take profit prematurely rather than thinking big and letting the winners run. It has been common that the profits I take are less than 20 or even 10% of actually attainable profits, and this is simply terrible. To solve such problem, once again, I should use smaller size so that I won't worry too much by the possible small loss if I don't take small profits prematurely, and I may also feel less compelling to take the small profits as they might be too small due to the small sizes.
AT this stage, I probably should also consider some concrete protocols to deal with a winning position, such as:
(1) Don't enter a position if the initial profit target (based on the choosen trading size) is less than $100.
(2) Unless there is compelling technical signals, never ever take a profits that is less than $50 (excluding commissions),
(3) when the net profits exceed $200, either lock in partial profits or raise the stop-loss to guarantee at least $100 profits;
(4) when the net profits exceed $300, set up a trailing stop order that allows no more than $100 loss from the set point.
I am committed to overcome the "fear" factor, and I will really push myself in the coming weeks. There is no excuse to let the "fear" factor rule and ruin my trading any longer.
On the market:
It was another victory week for bulls last week. Both DOW and SP500 convincingly broke out their early Nov. high and closed at new highs. It is intriguing that NASDAQ failed to accomplish the same feat -- it challenged the previous high on the opening moments on last Friday, but failed to close above that. In addition, NASDAQ's weekly gain (0.81%) is significantly smaller than SP500 (1.22%). From the weekly charts, all major indices show clear strong up trend, with no signs of tops. On the daily charts, everything is looking bullish, except last Friday's action, where the market started strong, but was sold down for the rest of the day and barely closed in green. The "distribution" was especially clear in NASDAQ.
On next week:
The up trend is strong and clear, the seasonality also favors bulls. Unless NASDAQ falls significantly, I expect market to go up and NASDAQ to make new high. However, be very careful going long as many stocks look tired. On the other hand, don't go short unless both weekly and daily charts show clear bearish signals. On the execution, use all the resolve to act on trading plans and over come the "fear"!!!
Weekly Calls:
1. AAPL: CTT between MA50=84 and 90 use tight stops. Re-evaluate the technicals if it moves out of this trading range.
2. AMZN: L1 on pullback, entry zone 1=39.2 (MA10) -39.6, stop just below 38.9; Entry zone 2= just above 38 use MA50=37.9 as stop. IT=42.2.
3. BIDU: CTT between 110/111 and 123/125 use tight stops. Also consider S3 on top if it approaches key resistance around 119 and 121. MA50=104.5.
4. CEPH: L3 when it breaks or closes above MA10=72.5, stop just below 71.9, IT=73.3.
5. CTRP: L1 on pullback, entry range 60-61.5, stop just below 59.9.
6. DVN: L1 on pullback, entry point 1=around 69.5, stop just below MA50=69.3; entry point 2=around 67.3, stop just below 67.
7. ERTS: S1 on top if it spikes towards 55.1 (MA50=55.1), CS=55.1, IDS=55.55, IT=52.5.
8. ESRX: L3 on bottom, entry point 1= just above 68, stop just below 68; entry point zone 2=66-67.5, stop just below 65.9. MA50=69.4.
9. FFIV: L2 on bottom if it spikes towards 73, stop just below 72.8.
10. MSO: L1, entry zone 22.7-23.2, stop just below 22.5.
11. RACK: S1 on top if it spikes towards 32.5/33.6 use very tight stops, MA50=32.2.
12. SNDK: S1 on top, entry zone 43-44, stop just above 44.2. It may break down further if NASDAQ falls.
13. STP: consider L2 if it breaks 33, stop around 32.8, IT=37-38.
14. VRTX: CTT between MA200=35.4 and MA50=40.4 use tight stops. Don't trade the mid range.
15. WMT: S1 on top if it spikes towards 47, stop just above MA200=47.1 or MA50=47.2, IT=45.5.
16. X: CTT between 72.3 and 77/79, bias is on the long side. MA50=70.1
Thursday, December 14, 2006
Daily Calls -- Friday Dec. 15, 2006
Both SP500 and DOW moved decisively out of the 1 month trading range and closed at new highs, but NASDAQ failed to do so. I wonder how long such divergence will remain.
1. AAPL: S1 on top, entry zone 89-89.7, stop just above 90. The distribution continues here.
2. BIDU: CTT between 119 and 125, try not to trade the mid range, if it breaks 119, it may well test support around 116.
3. DVN: L1 on bottom, entry zone 71.3-72, stop just below 71.2.
4. ERTS: S1 on top if it spikes towards MA50=55.2, stop just above 55.4.
5. ESRX: L1 on bottom, entry zone 66-67.5, stop just below 66.
6. FMCN: S2 on top if it spikes towards 71, stop just above 71, IT=67.5.
7. NTRI: L3 on bottom if it spikes towards 60, stop just below 59.5.
8. RIMM: speculative S3 on top if it spikes towards 139.7, stop just above 140.
9. STP: speculative S3 on top if it spikes towards 33, stop just above 33.
10. WLT: L1 on pullback, entry zone 48-49, stop just below 47.4, IT=51, MA200=49.6.
11. X: CTT between 72.3 and 76 use tight stops.
12. ADBE: reported Q4 in AH, traded between 39.4 and 43.5, key levels: 37.2, 39.4 (AH low), 40.05 (day low), 40.81 (close), 42 (AH support), 42.75 (recent high); 43.5 (AH high).
Wednesday, December 13, 2006
Daily Calls -- Thurs Dec. 14, 2006
All major indices mustered a tight gain on very light volume today after opening higher. Everything is in holding pattern, not sure what factors/events are capable of driving the indices out of their 1 month trading range.
One note: there is some concerted selling in all China stocks, such as TOMO, NCTY, KONG, LTON, SNDA, etc. the drops were rather sizable but the volume was not. Keep an eye on this sector.
1. AAPL: DT-S2 on top if it spikes towards key resistance levels around 89.5, 90, 90.5, 91, and 92.33, use tight stop, and be patient.
2. ADBE: will report Q4 in AH, watch key levels: 42.75, 42, 38.3 (MA50), 37.2, 35.3 (MA200).
3. BIDU: CTT when it approaches key levels: 116, 117, 119 (MA10), 123, 125.
4. DVN: CTT when it approaches key levels: 69.2 (MA50), 70.4, 72.
5. ESRX: SW-L2 on bottom, entry zone 66-68, stop just below 66, be patient.
6. FMCN: S1 on top when it spikes towards 69/70/71 use tight stops; also, L2 on bottom if it spikes towards 64/65.5 use tight stops, MA50=63.8
7. LRCX: S2 on top, entry zone 52-53.5, stop just above 54, looks like it is ready to dive.
8. MRVL: L3 on bottom, entry zone 19-19.5 (MA50), CS=19.5, IDS=19.
9. SNDK: S1 on top if it spikes towards 43, stop just above 43.2.
10. SONS: L1 on bottom if it spikes towards key support levels at 6.2, 6.3, and 6.4, use tight stops.
11. VRTX: L2 on bottom entry zone 36.3-37.1, stop just below 36. MA200=35.3.
12. WLT: L3 on bottom if it spikes towards 47.4/46.1 (MA50), use tight stops.
13. X: CTT between 73 and 76 use tight stops, don't trade the mid-range.
Tuesday, December 12, 2006
Daily Calls -- Weds Dec. 13, 2006
The major indices spent the day in the red and the FOMC decision failed to move the market in any convincing way. Bulls and bears are obviously in holding pattern for the past weeks, and I am not sure it that will change this week.
1. AAPL: CTT between 83.4 (MA50) and 87/89.5 use tight stops. Try not to trade mid range. Day trading bias on the short side.
2. BIDU: DT-CTT between 117 and 125, be very careful when trade the mid-range, bias on the long side.
3. CEPH: S1 on top if it spikes towards 72/73 use tight stops, IT=69.
4. DVN: L1 on bottom if it spikes towards MA50=69.1, stop just below 69.
5. ESRX: L2 on bottom, entry zone 66-67.51, stop just below 66.
6. LRCX: CTT between 50.9 (MA50) and 54 use tight stops.
7. NTRI: speculative L2 on bottom if it spikes towards 64, stop just below 63.6., IT=69.
8. RBAK: L1 on pullback, entry zone 16.75-17.5, stop just below 16.7.
9. RIMM: DT-S1 on top, entry zone 125-127, stop just above 127.3. IT=MA50=121.
10. SNDK: S1 on top if it spikes towards 43, stop just above 43.3.
11. SONS: L1 on bottom if it spikes towards 5.4, stop just below 5.4.
12. STP: consider L3 on bottom when it spikes towards 29 and MA50=28.1 use tight stops, MA200=29.5. It is a shame that I once again let it slipped through my hands.
13. VRTX: CTT between 37 and 40 use very tight stops.
14. WLT: L2 on bottom if it spikes towards 46 (MA50) or 47.4 use very tight stops.
15. X: CTT between 70.5 and 74.5 use very tight stops.
Monday, December 11, 2006
Daily Calls --Tuesday Dec. 12, 2006
Another up day, but the volume dropped to below average. Will tomorrow PM FOMC decision move the market dramatically one way or the other?
1. AAPL: CTT when it approaches key S/R around 84, 86.3, 87, 89.5, 90, 91. Pay particular attention to 87 and 89.5 as they formed the range for the last 3 days, CTT at these two boundaries might be risky.
2. AKAM: L1 on bottom when it approaches 52 and 52.8 use tight stops, don't chase now.
3. BIDU: CTT between 117 and 125, try not trade the mid-range.
4. CEPH: S1 on top, entry zone 72.3-73, stop just above 73.43. Looks like it is really to nose dive here, but the support zone is very close 69- MA50=71.1,
5. ENER: Speculative S3 on top if it spikes towards 41, stop just above 41.1. I cannot put a finger on this stock, it looked like ready to break down in the past few days, and then, today's big gain on no news....
6. ESRX: L2 on bottom, entry zone 66-67.6, stop just below 65.9.
7. FFIV: L2 on bottom if it spikes towards 72/74 use tight stops.
8. LRCX: CTT between 50.8 (MA50) and 54.1 use tight stops.
9. NTRI: speculative L2 on bottom, entry zone 64-65.5 (MA50), stop just below 64.
10. RACK: consider CTT between 30.8 (MA200) and around 34.25.
11. RBAK: L1 on pullbacks, entry zone 17-17.5, stop just below 16.9.
12. STP: S1 on top, entry zone 31.5-32.4, stop just above 33, IT=29.4 (MA200). check it against what happended on Aug. 17, sure it looks like to repeat the pattern.
13. VRTX: S1 on top, entry zone 41.8-43, stop just above 43, IT=39.
14. X: L1 on pullback if it spikes towards 74/76, use tight stops.
15. DVN: CTT between 69 (MA50) and 74.5 use tight stops, don't trade the mid range.
Saturday, December 09, 2006
Weekly Calls Dec. 11 - 15, 2006
On last week's trading calls and executions:
The W/L ratio of both daily and weekly calls came in just above 2:1. I continued to be trigger-shy when anticipated setups came along, I realize it is because of the "fear" of losing. Fear is on psychological issue that has long plagued my trading, and I think it is time to really force myself to address the issue. Starting next week, I will force myself to act on the setups that come to reality, but I will use small size (100-200 shares) initially so I will breathe easy and focus more on the technicals rather than P/L. I have to say that day after day, week after week, I have missed so many good trades that were perfectly analyzed and predicted that it started to feel not only frustrated but also discouraging. I just have to do something now.
On the market:
All major indices bounced back from previous week of loss. The market becomes increasingly choppy as the trading volume on the light side. Among the major indices, SP500 continues to be the strongest one as it made/closed at new highs (weekly), while both DOW and NASDAQ failed to break the late Nov. high, with the relative weakness especially clear for NASDAQ. On the weekly chart, while all indices show a clear and strong up trend, multiple indicators suggest diminishing upward momentum. The major indices appear weaker on the daily charts, especially NASDAQ which is yet to fully recover from the free-fall on Nov. 27.
On next week:
The market is entering the final three weeks of the year. Both the strong multi-month up trend and the seasonality favor the bulls, which means that dips of strong stocks near key support levels should be bought. On the other hand, the market starts to show some vulnerability here as seen in the latest charts of NASDAQ. Also, some market leaders, notably AAPL, RIMM, ADBE; have not only stalled but started to go down. I think the key is on NASDAQ: as long as NASDAQ can maintain above 2390, the overall strategy should be buy-on-dips and be very careful on any short-the-top set-ups. On the other hand, if NASDAQ can break its high around 2368.5, the party for bulls may get wilder before it is over.
For next week, again DT-CTT between key S/R levels should be remained as primary strategy. Because the market is becoming very choppy, be nimble when taking profits, and try to avoid holding position more than 2-3 days.
1. AAPL: DT-CTT when it approaches key S/R around 84, 86.3, 87, 89.5, 90,91, 92.4; use tight stops. Weekly chart show intact strong up trend, but candle formation and other indicators flash possible top-reversal signals. Daily chart is more bearish. A close below MA50=83.1 will likely change the trend.
2. ADBE: L1 on bottom, entry zone 37.3-37.8, stop just below 37; also consider S2 on top if it spikes towards 40, stop just above 40.2. MA50=38.7.
3. AEOS: S3 on top if it spikes towards 49/49.5, stop just above 50., IT=MA50=45.7.
4. AKAM: L1 on bottom if it spikes towards 50/52 use tight stops. The intra-day support is around 53, 52.8 and 53.3.
5. AMZN: L3 on bottom if it spikew towards MA50=37.7 use a very tight stop; also consider S2 on top if it spikes towards 39.75 use 40 as stop. Its weekly chart shows an evening-star formation, possibly signal the reversal of the trend.
6. ANF: S1 on top, entry zone 68.3-70, stop just above MA50=70.5, IT=MA200=64.9.
7. BIDU: L1 when it approaches key S around 111, 115, 116, 118 use tight stops. Its short-term R is around 123.
8. BRCM: CTT between 31.8 (MA200) and 35.2 use very tight stops, don't trade the mid-range.
9. CEPH: CTT between 71.1 (MA50) and 75 use very tight stops.
10. DVN: L1 on bottom, entry zone1=71.5-72.2, stop just below 71.4; entry zone 2=68.8-69.5, stop just below 68.8. IT=74.
11. ENER: S1 on top, entry zone 37.2 (MA200) to 38, stop just above 38, IT=35.
12. ERTS: S1 on top, entry zone 54-55.6 (MA50) or near 57, IT=50. Weekly chart suggests it is on the verge of trend-reversal.
13. ESRX: L1 on bottom, entry zone 68 - 69.5 (MA50), IT=MA200=73.3.
14. FFIV: L1 on bottom if it spikes towards 72/74, use tight stops,
15. FMCN: L1 on bottom if it spikes towards 65.6/67.5/69, use tight stops.
16. LRCX: L2 on bottom if it spikes towards 51, IDS=50.5, CS=MA50=50.7, IT=54.5
17. MRVL: L2 on bottom, entry zone 19.5-20.1, stop just below MA50=19.4, IT=22.
18. NTRI: tentative S3 on top, entry zone 74-76, stop just above 76.2.
19. QCOM: S1 on top only when it spikes towards 41, stop just above 41.
20. RACK: S1 on top, entry points around 33, 34.25, and 36, use tight stops, IT=MA200=30.7. Its short-term trend is changing as it closes below MA50=32.5.
21. RBAK: L1 on pullbacks, entry zone 17-17.5, stop just below 16.9, IT=19.5,
22. RIMM: S3 on top when it approaches 130.6 and 134.6 use tight stops, IT=MA50=120.8; also consider L1 on bottom if it spikes towards MA50 or 119, use tight stops. Its weekly chart shows signs of possible trend reversal.
23. SNDK: S1 on top if it spikes towards 45 or 47 use tight stops, looks like it is poised to break recent low at 43.15.
24. SONS: L1 on bottom if it spikes toward 6 or 6.2 use tight stops, IT=6.6.
25. STP: L1 on bottom, entry zone 31-32, stop just below 31, it is poised to break the key resistance around 33. IT=37.
26. TOMO: L1 if it breaks 15.8, IT=17, stop just below 15.5, MA200=15.7, watch for volume, it looks ready to break out!!.
27. WLT: speculative S3 on top if it spikes towards 51/52 use very tight stops. This stock has shown some class-book movement in the past year, let's see how it goes from here.
28. X: L1 on pullback if it spikes towards 72/74/76 use tight stops.
Thursday, December 07, 2006
Daily Calls -- Friday Dec. 8, 2006
The bulls struggled ahead of tomorrow's Nov. employment report, with NASDAQ led the decline.
1. AAPL: CTT between 84 and 89.5/90.5 use tight stops, bias on the short side, it finally broke down. MA50=82.8.
2. ADBE: CTT between 37 and 39 use tight stops, bias on the short side, MA50=38.7.
3. AKAM: L1 on pullback, entry zone 52.1-52.81, stop just below 52. This is a classic break-out, and should be bought on any weakness.
4. AMZN: DT-L2 on bottom, entry zone 36-37, stop just below MA200=35.9.
5. BIDU: L2 on bottom if it spikes towards key support around 116 and 112, IT=122. be nimble when taking profits, use 100-300 share size, stop no more than $1.
6. DVN: L1 on bottom, entry zone 71.5-72.4, stop just below 71.4.
7. ERTS: CTT between MA200=52.8 and 55.55 use tight stops, bias on the short side. NOTE: it dropped as low as 51.8 in AH without any news.
8. ESRX: L2 on bottom, entry zone 68-69.4 (MA50), stop just below 67.5.
9. FFIV: L2 on bottom if it spikes down towards 70.5, stop just below 70.5.
10. RACK: L2 on bottom if it spikes towards MA200=30.7, stop just below it.
11. SONS: L2 on bottom if it spikes towards key support levels at 6.2 and 6.3, use tight stops.
12. VRTX: L3 o bottom if it spikes towards 42.6, stop just below 42.5.
13. X: L2 on bottom if it spikes towards 76, stop just below 76.
Wednesday, December 06, 2006
Daily Calls Thurs Dec. 7, 2006
Bulls had problem to keep the momentum and the market became choppier than ever. I expect it will remain choppy until after the release of Nov. employment report on Friday.
1. AAPL: CTT between 87 and 91.4. Bias on the short side. The heavy distribution continues.
2. ADBE: CTT between 37 and 39.5 use tight stops, bias on the short side, it closed below MA50=38.7 for the first time in 3 months.
3. BIDU: DT-L2 on pullback when it spikes down towards support levels around 119, 120.5, 123, 124.3, 125 use tight stops.
4. BRCM: DT-S2 on top, entry zone 35.9-36.2, stop just above 36.3, IT=31.8.
5. DVN: L1 on pullback, entry zone 71.4-72.3, stop just below 71.4.
6. ERTS: DT-L2 on bottom, entry zone 53-53.5, stop just below MA200=52.8.
7. ESRX: SW-L1 on bottom, entry zone 67.5-69.4, stop just below 67.5.
8. QCOM: DT-S2 on top if it spikes towards MA200=39.8, stop just above 40.
9. RACK: DT-CTT between MA50=32.5 and 36 use tight stops.
10. X: DT-L1 on bottom if it spikes towards 74, stop just below 74.
Tuesday, December 05, 2006
Daily Calls -- Weds, Dec. 6, 2006
The rally continues with SP500 making yet another new high, while DOW and especially NASDAQ lagging. I think the trend will drift higher until Friday when the Nov. employment report is out, which is likely to have a big impact on the market.
1. AAPL: CTT between 90-93, try not to trade the mid-range. If it breaks out the 89.5-93.2 range, consider go along the direction of the break out.
2. BIDU: L1 on pullback, entry zone 116-119, stop just below 116.
3. DVN: L1 on pullback, entry zone 72-73, stop just below 71.8.
4. ESRX: L1 on pullback, entry zone MA50=69.4 to 70.3, IDS=68.9, CS=69.4.
5. ERTS: DT-L2 on bottom if it spikes towards 53.5, use MA200=52.8 as stop, IT=56.6.
Monday, December 04, 2006
Daily Calls Tuesday Dec. 5, 2006
I kind of expected that the market will bounce back a bit, but I am surprised that SP500 actually made and closed at new high, so it looks like that so called "kiss-and-goodbye" rebound may not be true. The market is become really unpredictable at this stage, probably should be very very selective when open any positions.
1. AAPL: S1 on top, entry zone 91.6-92, stop just above 92.1, IT=MA10=90. It has been under distribution for 4 straight days now. Consider overnight short position if it closes below 89.5 with a bearish candle.
2. AEOS: speculative S1 on top, entry zone 48.8-49.5, stop just above 50, IT=45. I tend to believe that the top is in for most retailers.
3. BIDU: CTT between 108 and 116.5 use tight stops.
4. DVN: L1 on bottom, entry zone 71.4-72.3, stop just below 71.4.
5. ERTS: S2 on top if it spikes towards 57.8, stop just above 58.
6. ESRX: L2 on pullback, entry zone 68.6-69.4, stop just below 68, IT=MA200=73.4.
7. FMCN: CTT between 67.5-71/73 use tight stops, bias on the long side.
8. LRCX: speculative S2 on top if it spikes towards 56, stop just above 57, IT=MA50=50.2.
9.RACK: S2 on top if it spikes towards 36, stop just above 36.2, IT=MA50=32.4.
10. TIBX: watch key resistance around 9.7.
Refer the follow stocks to their weekly calls.
AMZN, ANF, BRCM, TIF
Saturday, December 02, 2006
Weekly Calls, Dec. 4-8, 2006
On last week's trading calls and executions:
The daily calls continue to excel as the W/L ratio higher than 8:1. On the other hand, the weekly calls came in sub-par with a 3:4 ratio. My executions have been steadily improving, especially in risk control, self-discipline, and patience. However, I am still having big problem to deal with fears and cannot let my winners run. I need to find a better strategy to balance between the risk and profit.
On the market:
All major indices were down on high volume last week. For the first time in over 4 months, the bullish uptrend was seriously challenged. On the weekly charts, NASDAQ formed an ominous bearish candle, while both DOW and SP500 formed hammer like candles. The technical indicators for all indices show clear top-reversal signs. On the daily charts, bulls' attempt to recover the big loss on the Monday was unsuccessful as the sell off resumed on the Friday.
On next week:
The long over-due technical pullback finally occurred last week. The question now is if this is just a technical pullback or it is the turning point for the 4-month long up trend. Bulls have to take comfort in the fact that major indices recovered significant of loss during the last hour of Friday, which would otherwise have been an outright bearish turning point. The short-term key point is 2390 level for the NASDAQ, if it breaks down this level with a bearish candle, I would expect another leg down to test its MA50 around 2357, and in doing so, it may lead the entire market down. On the other hand, due to the seasonality factor and the factor that the market is split on the economy outlook, I suspect that the market will trade within the 3-week trading range rather than moving decisively out of this range for the last month of the year.
For the next week, DT-CTT at key S/R levels should be the primary strategy, specifically, CTT should be in the direction of primary trend to minimize the risks. In general, swing trades should be avoided in this anticipated choppy market.
1. AAPL: DT-CTT between 89.5 and 93.2, if it breaks to the upside, consider trade along the break-out. On the other hand, if it breaks down to the key support levels around 84.5 and 87, consider L1 on bottom use tight stops.
2. ADBE: L1 on bottom if it spikes towards key support levels at 36.5, 37, and MA50=38.7 use tight stops.
3. ADSK: L1 on bottom if it spikes toward 40, stop just below 39.8. It if breaks down 39.8, consider L1 on bottom use MA50=37.2 as stop reference.
4. AEOS: SW-S1 on top, entry zone 46.75-48, stop just above 48, IT around 43.5. Like other retailers, it seems topped out.
5. AKAM: CTT between 44 and 52, don't trade the mid-range.
6. AMZN: DT-L2 on bottom if it spikes towards key support levels around MA50=37.5 and 38.5 use tight stops, IT around 41.
7. ANF: S1 on top, entry zone 69.8-71, stop just above MA50=71.2, IT=MA200=64.8.
8. BIDU: L1 on bottom if it spikes down towards key support levels at 99. 100, 103, 106, 110, use 100-200 share, stop no more than $1.
9. BRCM: DT-L2 on bottom, entry zone 30.70-31.7, CS=31.5, IDS=30.7, IT=35. Also, consider S2 on top if it spikes towards 35, stop just above 35.2.
10. DVN: DT-L1 on bottom, entry zone 71.4-72.2, stop just below 71.4, SW-L1, entry zone 68 (MA50)-69.5, stop just below 68.
11. ERTS: DT-L2 on bottom, entry zone 53-53.6, IDS=MA200=52.7, CS=53.5, IT=57.5. MA50=55.9.
12. ESRX: L2 on bottom, entry zone 66-67.2, stop just below 65.9, IT=MA200=73.5.
13. FFIV: L1 on bottom if it spikes towards 71, stop just below 70.5.
14. FMCN: L1 on bottom, entry zone 64.5-66.1, stop just below 64.5, IT=71.
15. JCG: DT-L1 on bottom if it spikes towards 38, stop just below 38, IT=41. SW-L1 on bottom, entry zone 35.2-36.6, stop just below 35.2.
16. LRCX: DT-L1 on bottom if it spikes towards MA50=50.1, stop just below 50, IT=54.
17. MRVL: CTT between MA50=19.1 and MA200=21.2 use tight stops, consider trade along the break-out direction should the range is broken.
18. NTAP: L2 on bottom, entry zone 37.2-37.6 (MA50), stop just below 37, IT=40.
19. SONS: DT-L1 on bottom if it spikes towards 6.2, stop just below 6.2. SW-L1, entry zone 5.7-6.01.
20. TIBX: SW-S2 on top, entry zone 9.38-9.5, IDS=9.71, CS=9.5, IT=8.7, MA50=9.
21. TIF: SW-S1 on top, entry zone 39.5-41,5, stop just above 42, it is on the final stage of the year-end run-up. May consider buy puts once it rises above 40.
22. X: DT-CTT between 70 and 76 use tight stops, don't trade the mid-range.
Thursday, November 30, 2006
Daily Calls Friday Dec. 1, 2006
The bulls was smelling another victory after grinding out the bears all day long, then, in the last 30 min, all the sudden, sellers came out in force and erased all the gains. Overall volumes were a bit higher than the previous 2 days, and I sense a lot of churning going on today. The market is at a critical point, basically, if it heads down tomorrow, it may start another leg down. One notable thing is that the top for the retailer sector got another confirmation today. Active short-the-rebound of this sector should be considered in the coming days.
1. AAPL: DT-CTT between 89.5 and 93. I sense the distribution is going on here, maybe all good news are already priced in. If it breaks 89.5 on strong volume, a DT-short position should be considered.
2. AEOS: SW-S1 on top, entry zone 45.7-46.5, stop just above 47, IT=43.
3. ANF: CTT between MA200=64.8 and 69/70 use tight stops, bias on short side.
4. BIDU: DT-L1 on pullback when it approaches key support levels: 103, 106, 109, 110.5, 112, 114. Its high at 117.16.
5. BRCM: DT-L3 if it spikes towards 31.5, stop just below 31.2. Both MA50 and MA200 converge around 31.5.
6. DVN: DT-L1 on pullbacks, entry zone 71.5-72.21, stop just below 71.5.
7. LRCX: DT-L2 if it spikes towards MA50=50, stop just below 50, IT=51.5
8. SONS: CTT between 6 and 6.4 use tight stops, bias on the long side.
9. TIBX: S2 on top, entry zone 9.41-9.69, stop just above 9.7.
10. WLT: DT-CTT between 46.5 and 49.6 (MA200) use tight stops.
4.
Wednesday, November 29, 2006
Daily Calls Thursday Nov. 30, 2006
The bulls came out in full force today, and recovered about 50-60 % of this Monday's loss. It is obvious that the primary trend is still intact. The question now is if they can make a new high in December or it is going to be a test of top before an even larger pullback. I have a neutral view on the short-term trend of the market, meaning that I will consider both DT short-on-top and long-on-bottom at key S/R levels, but I will not long on break-outs or short on break-downs.
1. AAPL: DT-CTT between 93.2 and 89.5 use very tight stops. It gapped up in the morning on yet another upgrade, but sells came out in force.
2. AEOS: reported Nov. sale in AH, traded mostly between 46.1 and 46.8, with solid buying at 46.2. If it breaks 46 tomorrow, it may test MA50 around 45.2, in which case, consider L2 on bottom when it approaches key support around 41.8, 43, 44.5. Also, consider S1 on top if it cannot break 48.
3. ANF: S2 on top if it spikes towards MA50=71.5 with a stop just above 71.7.
4. BIDU: DT-CTT between 103 and 115 use tight stops. the bias is on the long side.
5. BRCM: DT-L1 on bottom if it spikes towards 31.5 (MA50 and MA200), stop just below 31.2.
6. DVN: L1 on pullback if it spikes towards 71.4, stop just below 71.
7. ERTS: DT-CTT between 55.5 and 58.2 use tight stops.
8. LRCX: DT-L1 on bottom if it spikes towards 50, stop just below MA50=49.9.
9. RACK: DT-L3 on bottom if it spikes towards MA50=32.2, stop just below 32.
10. SONS: DT-CTT between 6 and 6.4 use tight stops, bias is on the long side.
11. TIBX: SW-S1 on top, entry zone 9-9.4, stop just above 9.5, IT=MA200=8.3. Looks like it is really topped out.
12. WLT: DT-L1 on pullback, entry zone 44. 2-45, stop just below 44.
13. SNPS: reported Q3 in AH, beat the estimates and raised guidance, traded mostly between 24.8 and 25.8, with solid support around 25.25. Key levels: 23.24 (today's high and new 52 wk high), 24.7, 25.25, 25.8 (AH high).
Tuesday, November 28, 2006
Daily Calls, Weds Nov. 29, 2006
The bulls held the line today, and pretty much just that. Overall volume was a bit higher than yesterday. The fact that bulls failed to recoup a significant part of yesterday's big loss could spell trouble for them, as the another leg-down scenario remains very much possible. For the trading strategy of next few days, I would like to actively seek short-on-top setup with stops just above their Monday's high, on the other hand, long-on-bottom for the very strong stocks pulling back near major support levels can also be considered.
1. AAPL: DT-CTT between 89.5 and 93.2 use tight stops, bias is on the long side.
2. ADBE: DT-L2 on bottom if it spikes towards 38.8, stop just below MA50=38.5
3. AEOS: DT-S1 on top, entry zone 46.6-47.2, stop just above 47.5, IT=MA50=45.2. It suffered a mini technical breaking-down today, keep close eyes on it tomorrow morning, and be ready to take a position when the opening signals are right.
4. AKAM: DT-L2 on bottom, entry zone 45-46.1, stop just below 45. It closed around MA50 today.
5. BIDU: DT-L2 on bottom, entry zone 103-106, IT=110.
6. BRCM: DT-L1 on bottom if it spikes towards 31.5, stop just below 31.2. MA200=31.6, MA50=31.4.
7. CHAP: DT-L2 on bottom, entry zone 42.8-43.2, stop just below 42.8.
8. ERTS: DT-CTT between 55.5 and 58.5 use tight stops.
9. ESRX: DT-L2 on bottom, entry zone 67.51-68, stop just below 67.3, IT=MA50=69.4.
10. FFIV: DT-L1 on bottom if it spikes towards 71, stop just below 70.5.
11. LRCX: DT-L1 on bottom if it spikes towards 50/51.7, use tight stops. MA50=49.7.
12. SONS: L1 on bottom, entry zone 6.16-6.26, stop just below 6.1, IT=6.5.
13. RACK: DT-L1 on bottom if it spikes towards MA50=32.1, stop just below 32.
14. X: DT-L2 on bottom if it spikes towards 70.4, stop just below 70.
15. FMCN: DT-L2 on bottom, entry zone 69-69.5, stop just below 69.
16. ENER: will the support around 35 hold up?
Monday, November 27, 2006
Daily Calls Nov. 28, Tuesday 2006
The party for the bulls was interrupted violently today as the major indices fell hard led by NASDAQ with around 2% loss. The market breath was unmistakably bearish as winning issues beat losing issue by over 4:1, and the volume ratio was much worse. However, the overall volume for both NASDAQ and DOW was a bit light, especially consider the size of the decline. This suggests that the big boys are not in the hurry to sell (are they holding until the month-end window dressing is over?). Huge, bearish-engulfing black candles are almost everywhere, highlight the ubiquitous top-reversal formation. However, the bulls are unlikely to disappear after one rough session, as a matter of a fact, I suspect that the market may rebound if there is no follow-through of today's big drop.
I decided not to initiate any over night short positions near the end of the session despite of overwhelming bearish signals. For a market of this bullish for so long, there will be some rebound and re-test of the top before the ultimate reversal.
For tomorrow, I may consider some DT-long plays if (1). the market gaps down at the open and (2). the stocks being considered spike down towards their critical support level (stop just below those levels). However, I will be nimble when taking profits. On the other hand, if market rebounds tomorrow, I will actively search for short-on-top setups.
1. AAPL: DT-L1 on bottom if it spikes towards 87 using a tight stop, IT=90
2. ADBE: DT-L1 on bottom if it spikes towards 38.8, stop just below MA50=38.5.
3. AKAM: DT-L2 on bottom, entry zone 45-46.1, stop just below 45. It closed around MA50 today.
4. BIDU: DT-L2 on bottom if it spikes towards 100, stop just below 99.5, IT=109.
5. CHAP: DT-L2 on bottom, entry zone 42.8-43.2, stop just below 42.8.
6. DVN: DT-L2 on bottom, entry zone 67.3-68.1, stop just below 67. MA50=67.2.
7. ERTS: DT-L3 on bottom if it spikes towards 55, stop just below 55, MA50=55.8, good support around 55.4.
8. FFIV: DT-L1 on bottom if it spikes towards 71, stop just below 70.5.
9. FMCN: DT-L1 on bottom if it spikes towards 64.5, stop just below 64.5, IT=67.
10. LRCX: DT-L1 on bottom if it spikes towards 50/51.7, use tight stops. MA50=49.7.
11. RACK: DT-L1 on bottom if it spikes towards MA50=32.1, stop just below 32.
12. SONS: DT-L1 on bottom if it spikes towards 6/6.1 use very tight stops.
13. X: DT-L2 on bottom if it spikes towards 70.4, stop just below 70.
Saturday, November 25, 2006
Weekly Calls, Nov. 27 -- Dec. 1, 2006
On last week's trading calls:
For the 3rd straight week, there was basically no A calls (weekly and daily). The daily calls were good as there was no losing call, but the weekly calls were sub-par (3 F calls out of 17 calls).
On the market:
Both DOW and SP500 were down slightly while NASDAQ registered another winning week. On the weekly charts, all major indices seem to be poised for more gains or at least NOT appear in danger of imminent sizable pullbacks. The daily charts, however, show signs of top-reversal, especially for DOW and SP500.
On next week:
After 4 months of big rally and 9 straight sessions of new highs (before this past Friday), the market is way over-due for a technical pullback. The persistent and overwhelming bullish sentiment also suggest upcoming bearish action from a contrarian’s point of view. In addition, more news and signs are suggesting that the US economy may be weaker than expected. All of these factors favor a pullback coming as early as next week.
Due to the seasonality, the pullback could be limited, but on the other hand, the lack of any consolidatoin on their ways up in the past 3 week mean that the market could fall quite a bit before they meet the support levels (NASDAQ around 2375, DOW around 12100, SP500 around 1380).
For next week, swing longs should be avoided unless they are initiated at key support levels following a sizable pullback. On the other hand, swing shorts with excellent risk/reward ratios should be actively sought.
On next Monday (Nov. 27) action:
I expect the action on next Monday will set the tone for the rest of the week. The general plan for Monday will be: (1). if the market gaps up, be ready to fade the gap, or more safely, initiate short positions once the market/stocks fall below the opening prices; (2) if the market gaps down, don't chase them down right away, instead, wait at least 30 - 60 min to see if the gap holds firmly. In the second scenario, which is more likely as WalMart's Saturday report suggests a weaker holiday season, consider entering swing-short-positions near 4 pm in stocks that display solidly bearish candles and technicals. One thing needs to be particularly careful about is going long in the early stage of market pullback as one never know the size of the pullback.
1. AAPL: DT-L2 on pullback when it spikes down towards support levels around 82.5, 84.5, 87, use tight stops. DT-S3 on top may be considered using 93.1 as stop. The bias is on the long side.
2. AEOS: SW-S2 if it breaks down 46.9 with volume or closes below that with a bearish candle, IT=MA50=45, stop just above 48.
3. AKAM: CTT between 45.5 and 52, don't trade the mid-range. Notable support zone between MA50=47.5 and 48.
4. ANF: SW-S1 on top, entry zone 71-74, stop just above 74, IT=MA200=64.6. Notable support zone from 68.9-69.7. It appears to be topped out in near-term.
5. BRCM: SW-L1 on bottom if it spikes down towards 31, stop just below 31, MA50=31.2, MA200=31.6.
6. CEPH: SW-S1 on top, entry zone 75-76.5, stop just above 78.4, IT around 69. MA50=69.4.
7. DVN: CTT between MA50=67.1 and 72 use tight stops. the bias is on the long side.
8. ENER: S2 on top if it spikes towards 40, stop just above 40.5, IT=37.2 (both MA50 and MA200).
9. FMCN: DT-CTT between 66 and 70.5 use tight stops.
10. LRCX: DT-L2 on bottom if it spikes towards 51.7, stop just below 51.5.
11. SONS: SW-L1 on bottom, entry zone 5.71-5.9, IT=6.5. DT-L1 on bottom, entry zone 6.01-6.03, stop just below 6. May also consider DT-S1 on top if it spikes towards 6.4/6.5 use very tight stops.
12. TXN: SW-S1 on top, entry zone 30.2-31, CS=30.6 (MA50), IDS=31 (MA200), IT=28.5.
13. WLT: SW-S1 on top, entry zone 44-44.6 (MA50), stop just above MA50, IT=41.
14. X: DT-CTT between 70 and 76.2 use very tight stops, don't trade the mid range.
Wednesday, November 22, 2006
Daily Calls -- Friday Nov. 24, 2006
The winning streaks continues as the major indices rose for nine straight sessions, and it could continue on the day after Thanksgiving. However, a technical pullback is inevitable and probably will come as early as next Monday. I have seen a couple of guru articles talking about short the gap-up on next Monday, if there is one. I think while it is time now to plan some short set-ups in anticipating the pullback, it is important to scrutiny any of such set-ups in such a way that you rather miss a possible opportunity than get into one that is not ripe yet. I will be looking at two types of short candidates: the first type (Type 1) are the weak stocks with a primary down or flat trend (6 month charts) but rose in recent weeks along with the major indicies; the second type (Type 2) are strong stocks which have risen too much and too fast lately. This Friday might be a good time to scale in any good setups.
1. ADI: Type 1; SW-S2 on top, entry zone 33.7-34, stop just above 34.3, IT=31. Try to get a risk/reward ratio at 1:8 or better.
2. ENER: SW-L2, entry zone 37.1-37.5, stop just below 37, IT=40.
3. MRVL: Type 1, SW-S3 on top, entry zone 20.8-21.3 (MA200), CS=21.35, IDS=21.5, IT=18.7 (MA50). However, consider go long if it breaks and closes above 21.3 with a bullish candle.
4. SNDK: Type 1. SW-S2 on top, entry zone 48.7-49.4, stop just above 49.5, IT=45.5.
5. SONS: Type 2. DT-S1 on top if it spikes towards 6.4/6.5 in AM, stop just above 6.4/6.5, IT=6. Sells started showing up today.
6. WLT: SW-S2 on top, entry zone: 43-44.25, IDS=44.7, IT=41.
7. TXN: Type 1, SW-S2 on top, entry zone 30.2 - 31, IDS=31 (MA200), CS=30.7 (MA50), IT=28.5. Try to get a risk/reward ratio 1:4 or better.
8. YHOO: DT-L1, entry zone 28-28.5, stop just below 27.6, IT=29.3 (MA200).
9. FMCN: DT-L2 on pullback, entry zone 66.8-67.51, stop just below 66.8, IT=70.
Tuesday, November 21, 2006
Daily Calls -- Weds, Nov. 22, 2006
Another up day, what's new? I expect market to drift higher for tomorrow and Friday. At this stage, swing long obviously is not attractive, swing short is suicidal, and that leaves me with day-trading long or short, and DT-L is clearly safer, but somehow I feel more difficult to do.
1. ADI: S1 on top, entry zone 33.3-34, stop just above 34.3, IT=32. MA200=32.9, MA50=31.5. This is probably the only stock on my list that may be a SW-S candidate, it has clearly under performed the chip sector and NASDAQ. If the market falls next week, I think it can easily test 31.
2. AKAM: consider S2 on top if it spikes towards 52 in AM, stop just above 52.
3. ANF: in the spirit of black friday, L1 on bottom if it spikes towards 69, with stop just below 69, IT=MA50=71.9.
4. CEPH: L2 on bottom if it spike towards 69 (MA50), stop just below 68.8,
5. DVN: L1 on bottom, entry zone1=69.5-70.3, stop just below 69.5, entry zone2=66.8 (MA50)-67.5, stop just below MA50.
6. ENER: keep eye on it for reversal signals, if any, a break down below 35 will change the short-term trend.
7. LRCX: in the spirit of ongoing bullishness, L2 on bottom if it spikes towards 54, with stop just below 54.
8. MRVL: L2 on bottom, entry zone 19-19.51, stop just below 18.8.
9. SNDK: CTT between 46.2 and 49.5.
10. SONS: DT-L1 if it spikes towards 5.95, stop below 5.9.
11. DELL: reported Q3 in AH, beat estimates, traded mostly between 26.7 and 27.6, key levels: 26.1 (recent high), 26.7 (AH support), 27.6 (AH high), around 29.
Monday, November 20, 2006
Daily Calls, Tuesday, Nov. 21, 2006
The market certainly acts like invincible, the sizeable losses in oversea markets did not do much at all. The chip sector was particularly strong, whick made a new 6 month high and probably responsible for the NASDAQ gain. It appears that shorting chip stocks will be a very risky thing to do for the next few days.
1. AEOS: S2 on top only if it spikes towards its 52 wk high around 49.5 use a tight stop. It continues to out-perform the sector.
2. AKAM: S2 on top only if it spikes towards 52 with stop just above 52.
3. BRCM: may consider speculative S3 on top, entry zone 39-40, stop just above 40, it rises too much in too short time period.
4. CHAP: CTT between 43 and 47 use tight stops, don't trade mid-range.
5. MRVL: L1 on pullback, entry zone 20.11-20.51, stop just below 20. MA200-21.3.
6. SNDK: CTT between 47.8 and MA50=50.8/MA200=52.2.
7. SONS: will it finally break 6?? L2 on dip if it spikes towards 5.5, stop just below 5.5, IT=6.
8. X: CTT between 70.4 and 76 use tight stops, don't trade mid-range, looks like the rumor is running out of steam here.
Earning play:
1. FMCN: reported Q3 in AH, beat estimates and upped guidance, traded between 61.6 and 64.6, but mostly between 62.8 and 64. Key levels: 58.3 (MA200), 59.86 (close), around 60.1, 62.35 (day high), 62.8 (AH support), 64 (AH resistance), 64.6 (AH high), from 66-67.5.
Saturday, November 18, 2006
Weekly Calls Nov. 20-24, 2006
On last week's trading calls and executions:
The W/L ratio of last week's daily trading calls was a wopping 11:1, while the weekly calls was 4:5. Once again, the daily calls were much better than the weekly calls, reflecting the fact that my assessment on short-term market trend has mostly been incorrect. My execution on the first two days were terrible, as I failed to take quick/small profits of short trades and allowed them to turn into losses as market jumped. However, I was able to quickly put a stop to the losing streak, surpressed usual post-big-loss aggressiveness, and stayed calm and disciplined. The week ended with a big-gain on the Friday and put the week back into the W column.
The lessons I learnt this weeks are: (1) I should make serious effort to trade along the overall trend of the market, follow the technicals not some kind of ahead-of-its-time ideas; (2) if I have to trade against the market trend, I got to be very patient for the safest setup (excellent risk/reward ratio), and I got to be quick when taking profits.
On the market:
All major indices scored a big winning week and closed solidly above the 5-week trading range. On the weekly charts, the candle formation is very bullish for all indices, while there are a few technical indicators showing mild bearish divergences. The same thing can be said about the daily charts.
On next week:
The market continues to rise and every dip has been bought strongly. I expect this primary trend will continue next week. The trading volume is likely to decrease significantly due to the Thanksgiving holiday, the light volume normally favors primary trend and key S/R levels. Considering these facts, the overall guidelines for next week's trading are: (1) try to avoid short trades (2) buy dips of strong up trend stock near key support levels; (3) avoid swing trades.
Weekly Calls:
1. AAPL: L1 on pullback if it approaches 82.6/84 use tight stop. No shorting!
2. ADSK: S2 on top if it spikes towards 42, stop just above 42. L2 on pullback, entry zone 38.3-39, stop at 37.3.
3. AEOS: S1 on top, entry zone 47.8-48.4, stop just above 48.5. If it breaks 46.9, consider L2 when it approaches MA50=44.5.
4. AKAM: CTT between 47.8 and 52, MA50=47. another key support around 45.5 and resistance around 50. Don't trade mid-range.
5. AKS: S1 on top if it spikes towards 15.5, stop just above 15.5, IT=14.
6. ANF: S1 on top, entry zone 73.5-74.5, stop just above 75. support around 65 and 69. It looks toped out.
5. ANN: S1 on any rebound, entry zone 37-38.6 (MA200), stop just above 39. It suffered a technical breaking-down following the Q3 report, first support zone 34.5-35.5.
6. BIDU: L1 if it spikes down towards 100, stop just below 99, however, consider a speculative S3 if it spikes towards 120 with a IT=106.
7. CHAP: consider a speculative S3 (strictly DT) in range 46-50, IT=42.8. The steel sector has been very volatile and lately driven by those buy-out rumors, which I think will fade for most of them. Similar situation for AKS, OS, X.
8. COH: CTT between 40 and 42.7 use very tight stops. It has bucked the retail sector down trend of late so far, but I wonder how long can it swim against the tide, it seems to me that a speculative short just below 43 offers a pretty good risk/reward ratio. Be very patient about the setup.
9. DITC: S1 on rebound, entry zone 7.48-7.6, CS=7.72, IDS=7.8. The latest earing report drove it to fresh 52 wk low, if the market turns sour, this thing could test $6 soon.
10. DVN: DT-CTT between 65.5 and 71.4 use tight stops, MA50=66.5. Bias is on the long side.
11. ENER: L1 on bottom if it spikes towards 37, stop just below 37, IT=40. MA50=37.1, MA200=37.2
12. ESRX: CTT between 63.5 and 74 (MA200) use tight stops.
13. FNM: SW-S1 on top, entry zone 58.6-60.5, stop just above 62.4, IT=55. Strong support around MA50=57.2. The 3-month up trend seems topped out, but how much downside is there?
14. LRCX: L1 on bottom if it spikes down towards 52, stop just below 51.6.
13. NVDA: L1 on bottom if it spikes down towards 34.5, MA50=32.
14. OS: consider a speculative S3 on top in the range of 60-62, IT=55.
15. SHLD: S2 on top, entry zone 173.5-176.5, stop just above 180, IT=MA50=167.8.
16. SNDK: L3 on bottom if it spikes down towards 45.5, stop just below 45., IT=50.
17. X: keep a close eye on its movement, be extremely careful about intra-day speculative short-on-top action, L1 on bottom if it spikes towards 68, stop just below 68.
Thursday, November 16, 2006
Daily Calls -- Friday, Nov. 16, 2006
The fifth straight up day for major indices, and it feels that the only direction market can go is up up and up. It is pretty clear that market is yet to top out, therefore, trading accordingly.
1. AEOS: S1 on top, entry zone 47.9-48.4, stop just above 48.5; OR when it breaks 46.9. The retail sector is topping out, but the sinking crude price may keep it from any sizeable decline anytime soon.
2. AKAM: DT-S1 on top if it spikes towards 50.5 use tight stop, IT=48.
3. AKS: S1 on top, entry zone 14.2-14.5, stop just above 15, IT=13.
4. BIDU: consider speculative S3 around 111, IT=104.
5. CHAP: S1 on rebounds, entry zone 41.5-42.5, stop just above 43. It=39.3
6. DVN: L2 on pullback, entry zone 66.3 (MA50) - 68, stop just below 66, IT=70.
7. LRCX: DT-L2 if it spikes down towards 52, stop just below 51.7., IT=55.
8. OS: S1 on rebound, entry zone 57-58.5, stop just above 59, IT=55.
9. UNH: CTT almost ready, S1 on top if it spikes towards 48.8/50.1 use tight stops.
10. X: S1 on top, entry zone 65-66.5, stop just above 67, IT=60.6 (MA200).
Earning play:
1. ADSK: reported Q3 in AH, beat, traded mostly between 38.3 and 39.7, with solid resistance around 39, closed around 39.1. Key levels: 36 (MA200), 37 (close), 37.4 (recent highs), 38.7 (AH support), 39.7 (AH resistance).
2. HPQ: reported Q3 in AH, beat the estimates, but did not raise outlook, traded as high as 41.1, but then sliding steadily and closed around 39.8. Key levels: 38 (MA50), around 39.1, around 39.7, 40.13 (close), 40.4 (AH resistance) 40.85 (recent new high), 41.1 (AH high).
3. SBUX: reported Q3 in AH, met estimates, but cost and profit margin were disappointing, traded mostly between 36.9 and 37.7, and closed around 37.2. Key levels: 34.5 IMA200), 36, 36.6 (MA50), 36.9 (AH low), 37.7 (AH resistance), 38, 39.43 (close), 40.01 (day and recent Hi).
Wednesday, November 15, 2006
Daily calls -- Thursday Nov. 16, 2006
Another up day, and bulls are apparently invincible, but what is it left that continues to full the rally? I feel that the bull market is entering its final stage during which it will rise on any news until all the bulls are bought in and most bears have given up.
1. AAPL: DT-CTT between 82.6 and 85 use tight stops. DT's bias is on the short side.
2. AEOS: DT-S1 on top, entry zone 48.2-48.5, stop just above 49.
3. AKAM: DT-CTT between 45.5/46.8 (MA50) and 50 use tight stops.
4. ANF: S1 on top if it spikes towards 74, stop just bove 74.5, however, also consider DT-L1 on bottom if it spikes down towards 69 use a tight stop.
5. BIDU: DT-S2 on top if it spikes towards 106 use a tight stop.
6. CHAP: DT-S3 on top, entry zone 42.9-43.2, CS=43.3.
7. ESRX: DT-CTT between 67.5 and 74.1 (MA200) use tight stops.
8. OS: speculative S3 on top, entry zone 59-60, stop just above 60, IT=55.
9. PEIX: DT-L1 on bottom if it spikes down towards 18.5, stop just below 18.3, IT=20.
10. SNDK: DT-S2 on top if it spikes towards 47.8/48.8 use tight stops.
11. TXN: S1 on top if it spikes towards MA200=31, stop just above 31, MA50=30.8.
12. UNH: S1 on top if it spikes towards MA50=48.9 or MA200=50.1 use tight stops.
13. ENER: SW-S1 on top, entry zone 39.7-40.2, stop just above 40.5, IT=37.
Earning Plays:
1. NTAP: reported Q3 in AH, traded mostly between 37.6-38.5, key levels: 35.4, 36, 36.3 (MA50), 37.68 (day low), 38 (close), 38.5 (AH and day high), 39.73 (recent high).
2. CRM: reported Q3 in AH. Traded mostly between 40.1 and 42.4 in light volume, key levels: around 37.7, 38.6 , around 39.7, around 42, 42.39 (close), 44 (day high), 44.58 (recent high).
Tuesday, November 14, 2006
Daily calls Nov. 15, 2006
The sudden and sizeable jump in all major indices late this afternoon completely surprised me, which obviously indicates that my assessment of the short-term market movement is flawed. Even if it is largely a technical move after SP500 broke into new high, the lack of selling shows the strength of the bulls. I need to learn how to take the advantage of the current trend, fighting against this trend at any level, shape or scale becomes a very risky business.
1. AEOS: DT-L1 if it spikes down towards 47, stop around 46.8. However, consider building short position on top in the range between 48 and 50 with a stop just above 50.
2. BIDU: DT-L2 if it spikes down towards 98.5, stop just below 98.
3. CHAP: SW-S1 on top, entry zone 42-43, stop around 43.3.
4. ERTS: DT-CTT between 57 and 58.8 use tight stops.
5. ESRX: DT-S1 on top around MA50=70.1 or MA200=74.2 use tight stops.
6. FFIV: DT-S1 on top, entry zone 73-74, stop just above 74, IT=69.6.
7. LRCX: DT-L2 if it spikes down towards 53.3, stop just below 53.
8. MU: consider DT-S1 if it spikes towards MA50=15.3, MA200=15.4, stop just above 15.5, IT=14.5.
9. OS: DT-S1 if it spikes towards 59, use 59.1 as stop, IT=55.
10. SNDK: DT-S1 on top if it spikes towards 48/48.8, use very tight stops.
11. UNH: SW-S1 on top, entry zone 48-48.9 (MA50), stop just above 49.
Earning Plays:
1. ANF: reported Q3 in AH, beat the estimates, but outlook not raised, traded mostly between 72.7 to 75, and closed around 73.7, with AH resistance around 74.25. Key levels: 69, 70.82, 72 (MA50), 74.29 (day low and AH resistance), 75, 76.6 (close), 77.
2. ADI: reported Q3, profit beat, rev met, and raised guidance of current Q, traded mostly between 34.7 and 35.2. Key levels: 32.8 (MA200), 33.03 (close), 33.5, 34.7 (AH support), 35.2 (AH resistance), around 36.5.
Monday, November 13, 2006
Daily Calls -- Tues, Nov.14 2006
NASDAQ charged ahead for a new high today, while DOW and SP500 rose slightly, all on light volumes. Tomorrow's inflation report is likely to dictate the direction of the market.
1. AFFX: DT-S1 on top if it spikes towards 26.7 in the openning moments, stop just above 26.85.
2. ANF: DT-S1 on top if it spikes towards 77 in AM, entry zone 76-76.8, stop just above 77., IT=73.
3. BIDU: SW-L2 on pullback, entry zone 98.5-100, stop just below 98.
4. CHAP: DT-L3 on pullback, entry zone 39-40, stop just below 39.
5. DVN: DT-L2 on pullback, entry zone 66-67.5, stop just below MA50=65.9.
6. ESRX: DT-S2 on top, entry zone 67.5-68.4, stop just above 68.5.
7. UNH: SW-S2 on top, entry zone 48-49, stop just above MA50=49.
Saturday, November 11, 2006
Weekly Calls, Nov. 13-17, 2006
On last week's trading calls and executions:
The W/L ratio of last week's weekly calls is the second worst (1:2) in since the beginning of Sept., which reflects the fact that I seriously under estimated the bullishness of the market for the past week. The W/L ratio of last week's daily calls, however, fared much better (3:1). There were very few A calls.
On the market:
On next week:
18. SONS: CTT between 4.41 and 5.3, don't trade the mid-range for now.
19. UNH: may consider a speculative long from 42.9-43.5, stop just below 42.9.
20. X: DT-CTT between 65 and 68.5/69.5 use tight stop. Go short if it breaks down 65.
Earning Watches:
5. SBUX: will report Q3 on Thur Nov. 16, key levels: 33, 34.3 (MA200), 36.2 (MA50), 38, 39.5.
Thursday, November 09, 2006
Daily Calls, Friday Nov. 10, 2006
The market had a solid distribution day today and it was probably not the act of bears, rather it is the bulls, yes, there are just toooo many bulls right now and they are getting edgy because it is just too crowdy. A lot of stocks on my list formed pretty bearish candle formations today, but I decided not to establish any overnight short position because the bullishness is still very strong, and there can well be some rebound in the morning tomorrow before further possible slide.
1. ADI: DT-S1 on top, entry zone 31.9-32.3, stop just above 32.5, IT=MA50=30.8.
2. AKAM: DT-S1 on top,entry zone 49-50, stop just above 50. May also consider DT-L2 on pullback if it spikes down towards MA50=46.3, stop just below 45.5.
3. BIDU: DT-CTT between 93 and 98.5 use tight stops.
4. BRCM: DT-L2 on pullback, entry zone 30.5-31.4, stop just below 30.5.
5. ERTS: consider DT-L2 at the key support levels around 56.5, 55.3 use tight stops, I expect the gap be partially filled. Also, DT-S2 on top if it spikes towards 58.7 use 59 as stop.
6. LRCX: DT-CTT between 47 (MA50) and 50.75 use tight stops.
7. MRVL: SW-S1 on top, entry zone 18.6-19, stop just above 19, IT=17.
8. MU: S1 on rebound, entry zone 17.3-14, stop just above 14.15.
9. PCLN: L2 if it spikes towards MA50=37.5 use tight stops, what happend to a stellar Q3 report???
10. SONS: L1 if it spikes toward 4.4 use a tight stop. It closed below MA200=4.8 for the first time in over 2 months.
11. SNDA: reported Q3 in AH, beat estimates, traded mostly between 16.7 and 17.4. Key levels: 15, 15.3 (MA50), 16.1 (MA200), 16.48 (close) around 16.78 (old strong resistance), 17.4 (AH high), 17.84 (6 month high).
12. NVDA: reported Q3 in AH, beat estimates, traded mostly between 35.7 and 37.3. Key levels: 34.99 (day low), 35.29 (day close), 35.7 (AH low), 36.2 (day high), 37.3 (AH high).
Wednesday, November 08, 2006
Daily Calls -- Thursday, Nov. 9, 2006
I once again was a bit surprised at the degree of bullishness in the market, especially given the gap down of this morning, this together with yesterday's market action, clearly suggest that I have under-estimated the strength of ongoing up trend. Is it time to make the amends with the market and just go long? probably not, at least in with swing trades, because I am not crazy about the risk/reward ratio for long trades at this stage of game. However, I need to be very cautious about any short-on-top setups.
1. AAPL: DT-L2 on pullback, entry zone 81.2-81.6, stop just below 81. It looks like ready to make new highs.
2. AKAM: consider DT-S2 on top when it spikes towards 52 with a stop just above 52, IT=48.
3. BOBJ: L2 on pullback, entry zone 37.7-38.2, stop just around 37.5, IT=39. risk/reward not great.
4. BRCM: L2 on pullback, entry zone 31.2-31.7, stop just below 31.
5. CHAP: DT-SW-S1, entry zone 41.7-42.6, stop at 43.2, IT=39.
6. ENER: DT-S1 on top if it spikes towards 39 in AM, stop just above 39., IT=37.
7. ERTS: DT-CTT between 56.5 and 59 use very tight stops.
8. LRCX: DT-CTT between 48 and 52 use very tight stop.
9. XRTX: L1 on pullback, entry zone around MA200=21.7, stop around 21.25.
10. CSCO: reported Q3 in AH, beat estimates and outlook also exceeded expectation, traded mostly between 25.5 and 27.7, with AH resistance around 27.4 and support around 26.9.
11. CTRP: L3 when it approach key support (MA50, MA200). reported Q3 in AH, missed earning estimates, traded lightly between 50 and 53, closed around 50.8. Key levels: 42.4, 43.4, 44.5 (MA200), 46, 48.3 (MA50), 50, 53, 53.75 (close), 56.5 (all time high).
12. PCLN: consider L1 on pullback use 41.5 as stop. Reported Q3 in AH, beat the estimates and raised guidance, traded mostly between 42.8 and 43.6, with AH high around 44.3, and closed around 43.1. Key levels: 40.4 (close), 41.49 (recent 52 wk high), 42.8 (AH support), 43.1 (AH close), 43.6 (AH resistance), 44.3 (AH high). The short interests jumped 67% last month to near 37% of the float!!!
Tuesday, November 07, 2006
Daily Calls: Nov. 8, Weds, 2006
Wow, bulls are total bullish today, I am a bit surprised that NASDAQ actually made a new intra-day high. Now, bulls better get what they wanted from the election tonight or we will see a pullback here that could get nasty.
1. AAPL: DT-S2 on top if it spikes towards 81.7 in AM, stop just above 82.6, IT=79.5
2. AEOS: DT-S3 on top if it spikes towards 47 in AM, stop just above 47.5
3. AKAM: DT-S3 on top if it spikes towards 52 in AM, stop just above 52.
4. AMD: DT-S1 on top if it spikes towards 23 in AM, stop just above MA50=23.1
5. ANF: DT-S1 on top if it spikes towards 75/77 in AM, use tight stops.
6. BRCM: DT-L1 if it spikes towards 31, stop just below 31.
7, CHAP: DT-S3 on top if it spikes towards 43 in AM, stop just above 43.2.
8. DHI: SW-S1 on top, entry zone 22.8-23.4, IDS=23.6, CS=23.4 (MA50), IT=21.
9. LRCX: DT-S3 on top if it spikes towards 52, stop just above 52.5, IT=48.5
10. MOT: SW-S1 on top, entry zone 22.5-23, stop just above 23.5. MA200=22.6.
11. OS: DT-S1 on top if it spikes towards 57, stop just above 57, IT=53.
12. SNDK: SW-S1 on top if it spikes towards 49, stop just above 49.2.
13. SONS: SW-L1 on bottom if it spikes towards 4.4/4.5, stop just below 4.4.
14. WFMI: DT-S1 on top if it spikes towards 48.5, stop just above 48.5.
15. X: DT-S1 on top if it spikes towards 68.5/70, use tight stops.
16. ERTS: DT-S2 on top, entry zone 58.8-59.5, stop just above 60, IT=57.5.
Monday, November 06, 2006
Daily Calls, Tuesday Nov. 7, 2006
All major indices posted strong gains today on relatively light volumes. I kind of expected a pop given the current short-term oversold conditions, however, the strength exceeded my expectation. Tomorrow is the mid-term election day, and already, there are chats all over the Web about the "post-election" rally, which sounds quite fishy to me. My guess is that the market may rise a bit more if the GOP does not lose as badly as some fear. But in any case, let's respect the charts, which right now suggests that further gains in next day or two is likely.
1. AAPL: DT-S2 when it approaches resistances around 80 or 81.8 using tight stops, IT=79.5. It under-performed NASDAQ and could not stay above the key 80 level for even a couple of minutes, but the support at 79.5 was good enough for today.
2. ANF: DT or SW-S1 on top if it spikes towards 75 in AM, stop just above 75, IT=MA50=71.4.
3. AKAM: DT-S2 on top if it spikes towards 50 in AM, stop just above 50, IT=MA50=46.
4. CEPH: L1 on pullback, entry zone 70.5-71.3, stop just below 70.5.
5. CHAP: DT-S2 on top, entry zone 41.8-42.6, IDS=43.2, CS=42.1, IT=39.5. (shorted today @41.68, covered @41.31).
6. CRM: currently short @ 41.89, stop around 42.3, IT around 40. Probably got in too early.
7. FFIV: consider DT-S2 on top if it spikes towards 67.2, stop just above 67.4, It=64.
8. LRCX: DT-S2 on top if it spikes towards 50.75/51.4, use tight stops.
9. STP: DT-L1 when it breaks 25.5, IT=26.2 (MA50), stop around 24.8.
10. X: considering a speculative SW S3, entry zone 68.4-69.2, just above 70 or 70.38 (recent high), It=65.
11. SONS: Consider CTT between 4.5/4.8 and 5.5/5.7. Reported Q3 in AH, beat estimates by a lot, but once again delayed report due to ongoing option review. Traded as low as 5.05 and as high as 5.45 in AH, but mostly between 5.1-5.3. My take is it should stay above MA200=4.8 as it had a very strong Q3, but it probably won't break resistance zone between 5.5-5.7 because its prolonged account mess and possible delisting in the near future..
12. NTES: reported Q3 in AH, beat the estimates. traded mostly between 17 and 17.9. Key levels: 16, 16.32 (close), 16.9 (MA50), 18.3 (MA200), around 19.1. Probably a lot of shorting in AH as Ameritrade does not have any shares for short.
13. most of other stocks on the list may still follow the weekly calls.
Saturday, November 04, 2006
Weekly Calls, Nov. 6-10, 2006
On last week's trading calls and executions:
For the second straight week, there is no F calls for both daily and weekly calls, and there are only 3 E calls. The W/L ratios continue to improve, especially the weekly calls where the A and B calls accounted for 30 and 20 % of total calls respectively. If such trend continues, I should seriously implement short swing trades based on weekly calls.
My executions, while still seriously lagging, have been improved in the past week. I feel especially positive that I was able to curtain fears and allowed some winning positions to run a bit more that I normally would allow. However, there were several cases where my setups came to me in the opening moments but I failed to pull the triggers and missed those very profitable opportunities. More work needs to be done to overcome fears and follow well prepared trading plan.
On the market:
All major indices logged in a losing week. On the weekly charts, candle formations and other tech indicators show the early stage of a top-reveral motion, however, the volumes and the degree of bearishness of the candles suggest that the market may stay choppy in the current trading range before a possible sizeable movement to the downside. On the daily charts, while the bearishness is evident, the major indices seem a bit over-sold in the near-term.
On the next week:
The Q3 report season will be winding down, and based on what I have seen so far, I doubt that the remaining Q3 reports can significantly drive the market to the upside. There are reports that the bullish sentiment among stock newsletter and ordinary investors reached multi-year high in the past week, and this is usually an excellent contrarian’s signal that the market top is near or done. Another notable development is that several economic reports in the past week suggest that the assumed soft-landing of economy may not be such a certain thing, and the consumer spending may not be as strong as expected. All above mentioned facts should really concern the bulls.
For next week, while the day-trading or very short swing may be the most safe strategy in the expected choppy and volatile market, I should start to actively seek for the swing trade setups based on short-on-top approaches. Swing long trades should be avoided for most stocks.
A. Weekly Calls:
1. AAPL: SW-CTT between 75 (MA50) and 81.7 using tight stops. DT-S2 on top when it approaches resistance levels around 80, 81.7 using tight stops.
2. AEOS: SW-CTT between 41.8 and 46.8 using tight stops. DT-S2 on top, entry zone 45.8-46.5, stop at 46.81, IT=44. MA50=43.3.
3. AKAM: SW-CTT between 40 and 50. DT-CTT between 45.2 and 47.7 use tight stops, and trade along the break-out if the range is breached. It has so far held just around MA50=45.9, I expect its short-term movement to be dictated by NASDAQ trend.
4. AMZN: SW-L1 on bottom if it approaches 36, with a stop just below 36, IT=38.5.
5. ANF: SW-DT-S1 on top, entry range 73.8-75, stop just above 75, IT=69. MA50=71.3.
6. BIDU: DT-CTT between 83 and 90 use tight stops. MA50=84.7, MA200=78.2.
7. BRCM: DT-CTT between 26.8 and MA200=31.2 use tight stops.
8. COH: DT-S2 on top, entry zone 39.5-40, stop just above 40.2, IT=37. Not really a good short candidate, but the weekly chart shows a perfect tweezer's top formation.
9. COST: DT-CTT between 54 and 50 use tight stop. MA50=MA200=51.5.
10. CRM: may consider DT-S3 on top, entry zone 41.2-42, stop just above 42.3, IT=37.
11. DVN: DT-SW-L1 on pullback, entry zone 65-66, stop just below MA50=64.8.
12. ENER: DT between 34.9 and 38 use tight stops; consider SW-L3 on bottom if it spikes down towards 32, IDS=31.5, CS=32.
13. ERTS: SW-L1 on pullback, entry zone=56.5-58.1, stop just below 56.5, IT=61
14. FFIV: SW-L1 on pullback if it spikes down towards 60, stop just below 60; DT-S2 on top, entry zone 66.8-67.3, stop just above 67.5.
15. LRCX: DT-CTT between 46.5 (MA50) and 50.75/51.4.
16. UNH: DT-L3 on bottom, entry zone 46.61-47.2, stop just below 46.5, IT=MA50=49.4, MA200=50.3
17. VRTX: SW-L1 on bottom, entry zone 36.5-38.1, IDS=36.3,CS=36.75 , IT=41.
18. X: SW-S1 on top, entry zone 67.5-70, stop just above 70, IT=60. B.
Earning Plays:
1. CTRP: will report Q3 on Weds. Nov. 8, AMC. Key levels: 40, 42, 43, 44.3 (MA200), 47.8 (MA50), 50, 51, 52.9, 56.5.
2. SONS: Will report Q3 on Mon Nov. 6, AMC. Key levels: 4.2, 4.5, 4.8 (MA200), 5.2, 5.3, 5.5, 5.7, 5.75, 6.
3. URBN: Will report Q3 on Thurs Nov.9, BMO, Key levels: 13.65, 15, 16, 17, 17.7 (MA50), 19.7 (MA200), 22
Thursday, November 02, 2006
Daily Calls -- Friday, Nov. 3, 2006
Both bears and bulls hesitated to commit before tomorrow's important Oct. employment report. As of now, the weekly candles for all major indices are poised to become a bearish engulfing formation, and if tomorrow's job report triggers further slide, I would expect more pullback on the downside for the coming weeks, so keep that in mind when any position is opened.
1. AEOS: may consider S2 on top, entry zone: 46-46.8, stop just above 47.25, IT=44.
2. AMZN: L1 on bottom if it spikes down toward 36 with stop just below 36.
3. ANF: S1 on top, entry zone=73.5-74.8, stop just above 75, IT=71.
4. BIDU: DT-L1 on bottom, entry zone=84.5-85.5, stop just below MA50=84.6.
5. COST: DT-L1 on bottom, entry zone 51.5-52.1, stop just bleow 51.5.
6. CRM: S1 on top if it spikes towards 40, use 40.31 as stop.
7. DVN: L1 on bottom, entry zone 65-66, stop just below MA50=64.7, IT=68.5
8. LRCX: DT-L1 on bottom if it spikes down towards 47, stop around MA50=46.4,
9. MRVL: SW-L2 on bottom if it spikes down toward 17.8, stop just below 17.6.
10. NTRI: DT-L2 on bottom if it spikes down toward 58, stop around 57.5.
11. SONS: L1 on bottom if it spikes down towards 4.75, entry zone 4.76-4.81, stop just below 4.7.
12. VRTX: L1 on bottom if it spikes down towards 37, stop just below 37, IT=40.5
13. WFMI: reported Q3 i n AH, missed rev and lowered outlook, it lost nearly 5% in the regular session, but lost another 14% in AH, traded as low as 50.6 before closed around 51.6, AH resistance around 52.5. Key levels: 46.91 (previous 52 wk low), 50, 50.6 (AH low), 51.6 (AH close) 52.5, 55, around 56.2,
14. ERTS: reported Q3 in AH, beat the estimates and raised the guidance, traded mostly between 55.9 and 57.5. Key levels: 55-55.4, 56.5-57 (AH support), 57.5 (AH resistance), around 57.8 (mutiple tested top), 57.74 (recent 52 wk high), 60, 61.04 (52 wk high).
Wednesday, November 01, 2006
Daily Calls, Thursday, Nov. 2, 2006
The bulls got the their Halloween tricks today, the rapid sliding into the close probably shaked some bulls. Judging from the charts, everything seems to have formed a top-reversal pattern. For the next several days, the trading bias is definitely on the short side, but try to short the bounces instead of chasing the bulls down to minimize the risks.
1. AAPL: S1 on rebound, entry zone 79.3-80.2, stop at 80.5, IT=77.
2. AKAM: DT-CTT between 42 and 47.8 use tight stops.
3. AMZN: L2 on bottom if it spikes down towards 36 use 35.98 as stop.
4. ANF: L2 on bottom if it spikes down towards 71/69 use tight stops. MA50=71.1.
5. BIDU: L3 on bottom if it spikes down towards 82/79, use tight stops.
6. COST: L2 on bottom if it spikes down towards 51.5 use tight stop.
7. DVN: L2 on bottom if it spikes down towards MA50=64.6, stop just below 64.
8. GOOG: L2 on bottom if it spikes down towards 455, stop just below 453/450.
9. LRCX: CTT between 50 and 46.2 use tight stops. MA50=46.4.
10. MEDX: S1 on any rebound, entry zone=12.3-12.7, stop just above 13, IT=11.6 (MA50).
11. SONS: L2 if it spikes down towards MA200=4.8, stop just below 4.8.
12. WFMI: consider DT-L2 on bottom if it spikes down towards 61 with a stop just below 61. MA200=61.5, MA50=61. Q3 report in AH tomorrow.
13. AEOS: reported OCT. sales in AH (below estimates and raised Q3 guidance, dropped as low as 43.75. Long when it stays above 43.8 use a tight stop, or on bottom if it spikes down towards 42.
Tuesday, October 31, 2006
Daily Calls: Weds, Nov.1, 2006
Well, it played out as expected, and now the month is behind us, what to expect tomorrow?
1. AKAM: S1 on top, entry zone 47.5-49, stop just above 50.
2. BRCM: Day-trading-CTT between MA50=28.9 and MA200=31.3 use tight stop.
3. COST: day-trading-CTT between 54.3 and 51.5 use tight stop.
4. CRM: S1 on top, entry zone 39.4-40, stop just above 40.3, IT=37.
5. DVN: L2 on pullback, entry zone 65-66, stop just below MA50=64.5, IT=68.5
6. LRCX: S1 on top, entry zone 50.2-51, stop just above 51.3.
7. MRVL: L1 on pullback, entry zone=17.7-18.1, IT=18.8
8. X: S1 on top, entry zone=67.9-68.9, stop just above 69.1, OR be more patient and wait till it approaches 70.
9. YHOO: S1 on top, entry zone 26.5-27, stop just above 27.51, It=24.5.
10. BIDU: reported Q3 in AH, beat estimates but traded as low as 78, mostly between 82 and 86. Key levels: 76, 77.8 (MA200), 78 (AH low), 79, 80, 82, 84.5 (MA50), 87.8 (close), 90, 92, 96.
Monday, October 30, 2006
Daily Calls: Oct 31, 2006
As expected, the bulls are far from being scared. Today's action puts everything in a delicate balance, and I see at least another day like this tomorrow as the fiscal year for many large funds comes to the end.
Same calls as the weekly ones for: COST, SONS, TXN, AAPL, ENER,
1. AKAM: CTT between 42 and 48. it closed just below MA50 for first time since August, if market goes down, it could easily test 42/44. Be patient with any bottom fishing.
2. BRCM: consider S2 on top when it approaches MA200=31.3, entry zone 31.1-31.7, stop just above 31.8, IT=29.5.
3. LRCX: S2 on top, entry zone 50.3-51.2, stop just above 51.51
4. AMZN: DT-L1 when it breaks 38.5, ST=38.2, IT=40. DT-L1-on bottom, entry zone 37.7-38.1, stop just below 37.6.
5. RACK: reported Q3 in AH., beat estimates, traded mostly between 29.4-31.6. Key levels: 28.6 (MA50), 29.5 (MA200), 31.6 (AH resistance), 32, 34.2. short interests just hit 52 wk high (over 21%).
Saturday, October 28, 2006
Weekly Calls Oct. 30-Nov.3, 2006
On Last week's calls and execution
Overall, my trading calls for the past week were better than previous averages. Notably, there is not a single F grade call both my daily and weekly calls. My execution, on the other hand, continues to lag big time. I have becoming more and more sensitive to the trading risks in the past few weeks that I often hesitate to pull the trigger when a setup developed as expected. One reason for such hesitation is that I have doubts on my slightly-bearish-biased calls in this bullish macro-environment, the other reason is the old fear of loss. Since my trading calls have so far proved to be excellent, I should be decisive and forceful next week whenever a setup is triggered.
On the Market
Another up week for all major indices, but the sizeable decline on the Friday may concern the bulls. On weekly charts, most tech indicators for all major indices show diminishing bullishness. On daily charts, most indicators actually suggest an imminent bearish reversal for all indices. Considering the strength of ongoing bullish trend, however, I don't expect that this past Friday's action will trigger immediate top-reversal right away, instead, the market will be choppy and range-bound until more news to either confirm or dispute the possible hard-landing scenario as hinted by the sharp GDP drop reported on the Friday. And that piece of news may come on next Friday as the date of Oct. Employment is released.
The most important thing to watch is NASDAQ, it did break the April high on Thursday, but the Friday's sharp drop pretty much negated that bullish move and once again buoyant the idea of possible triple tops, but such possibility won't become significant unless NASDAQ drops below 2330 level.
The Q3 earning season so far is better than expected, and it probably will remain so throughout next 2 weeks.
On overall trading approaches for next week
At this stage, day-trading or very short swing is better in this choppy and volatile market. Any swing long setup should be on the pullback rather than break-out, and patience is still required for any short-the-top setup. In any case, risks must be clearly defined and set for any trades.
abbreviations: DT=day trading, SWT=swing trading.
A. Weekly Calls:
1. AAPL: DT-S2-on-top, entry zone=81-82.4, stop at 82.7; OR when it breaks 80, stop at 80.61. SWT-L2, entry points near 76/78 use no more than 0.5 stop, IT=80.
2. AEOS: DT-S3-on-top, entry zone 46.5-47.1, stop at 47.3. SWT-L1, entry zone 42-MA50=42.8, stop at 41.8.
3. AKAM: DT-S2-on-top, entry zone=48-49, stop just above 50; SWT-L1, entry points near 40/45 with tight stops. MA50=45.8.
4. BOBJ: DT-S3-on-top, entry just below 39/40, stop just above 39/40, IT=36.5.
5. COST: DT-S2-on-top, entry zone=53.5-54.2, stop above 54.5; SWT-L2-on-bottom, entry zone just above MA50=51.3 and MA200=51.4, IDS just below 51. Consider go along the trend it closes below the MA50 MA200.
6. CVS: DT-SWT-S2-on-top, entry zone 31.8-32.2, stop just above 32.3, IT=30.
7. EBAY: DT-CTT between 31 and 35 use tight stops, MA200=31.7.
8. ENER: CTT between 35 and 38 use tight stop, DT on the upper boundary, SWT on the lower one.
9. LRCX: CTT between MA50=46 and 51.75 use tight stops.
10. NTRI: DT-S2-on-top near 66, stop just above 66; SWT-L3, entry zone 58.5-60.3, stop just below 58, IT=66.
11. SONS: SWT-L2-on-bottom, entry zone 4.8 (MA200) to 4.96, stop just below 4.8. Be patient, consider scaled entry, IT=5.3 before earning on Nov. 6.
12. TXN: SWT-S1-on-top, entry zone 30.98-31.7, stop at 32, IT=28.5. MA50=31.6, MA200=31.2.
13. VRTX: SWT-L1 on pullback, entry zone 37-39.5, stop just below 37. IT=44.
B. Earning Watch:
1. BIDU: will report Q3 on Tuesday Oct. 31 AMC. Key levels: 77.7 (MA200), 79, 80, 82, 83.9 (MA50), 92, 96.67.
2. CEPH: will report Q3 on Thursday Nov. 1 AMC. Key levels: MA200=61.1, MA50=64.2, 67, 71.2, 76.
3. WFMI: will report Q2 on Thursday Nov. 2, AMC, key levels 60.6 (MA50), 61.4 (MA200), 63.6, 65.5, 67.8, 72.5
4. X: will report Q3 Oct. 31, BMO, key levels: 60.7, 62.8 (MA50), 65, 68, 70.38, 20.66, 77.77,
