Monday, October 09, 2006

Daily Calls, Oct. 10, 2006

There were probably a lot of experienced traders faded the opening gap this morning, and they were rightly so in such a bullish market. I expect the market to drift, maybe with a bit up bias, until the earning season kicks in later this week. I doubt that it will be another stellar Q report season, and I will start to look for short-on-top setups with very small initial position (100 shares).

1. AMD: S1 on rebound as it approaches 24, use MA50=24.7 as stop reference, IT=22.

2. CHAP: S2 on top if it does not exceed today’s Hi=39.1, 52 wk high=39.59.

3. CVS: S1 on top as it approaches MA200=30.8, CS=31, IDS=32.

4. ESRX: CTT between 65.5 and 72.5 use tight stops. The short-on-top entry zone is 70 --71.5.

5. OS: S3 on top when it approaches today’s HI=50.3, CS=50.3, IDS=52

6. QCOM: S1 on top, entry zone 36.4-37.5, CS=37.5, watch key support zone 35.75-36.

7. SNDK: S3 on top, entry zone 59.3-59.8, stop just above 60, IT=55

8. VRTX: closed above 37 today, may test 40 soon.

9. X: S2 on top if not break today’s HI=65.19, or wait more patiently around 66.5

10. PMTC: Earning play. Raised outlook for Q4 and Q12007, traded mostly between 19.2 and 20.1 in AH. Key levels: 18, 18.24 (today close and 52 wk high), 19.5 (AH support, 20.1 (AH high and resistance). Short interests reached 52 wk high accounting nearly 8%.

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