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.

1 comment:

shortswings said...

Hi Man,

Thanks for your advice on CELL's stop. As for the broad market, I am definetely on your side. However, I think that it will keep going up for a while before heading down, because the up inertia is still there. Below is my comments on your calls.

1. AAPl. It is clearly in uptrend. There is no question about that. However, the daily MA(10) and Histogram showed an obvious divergence, which means that the up momentum is not good at least for now. Expect it to be traded in the range that you pointed out for a while. Long if oscilator(either Histogram or Stochastic)begins moving up from bottom and MA(10)begins heading up.

2.Adbe I have a different view on this one. Right now it is in critical stage. If it breaks down MA(50) and closes below it. The trend of stock clould be in down side. On the other hand, if it can break up 40.69 and close above it, the up trend resumes. I would buy long only in the case of latter. It may be a good candidate for day trade, but not for swing.

3. AEOS. Stock is still in up trend , although the weekly candle was bearish. I think there is a wonderful buy opportunity on monday. Long if it is above the high of previous session with a stop 44.80 and a target 49. I would short only if it approaches 49-50.

4. ERTS Yes, 53 is a strong support, however if it goes down to 53, then the down trend would be obvious. In fact, I think the reversal of trend is almost completed now. I would take chance to establish a short position around 57 with a tight stop and a target around 53.

5. FFIV. Clearly it is in uptrend. When you are going to long , please make sure that oscilator(Histogram or Stochastic)is ticking up from bottom.

6. TIF. From charts both weekly and daily, I dont see any weakness. My opinion on this one is totally opposite to yours.

Have a great trading week!

shortswings