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.

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