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,

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