Wednesday, January 17, 2007

Daily Calls -- Thur Jan. 18, 2007

Today's AH actions were overall bearish for the big tech names. I start to see a pattern: the market cares little about if a report beats estimates for the reporting Q, rather it is the outlook that really matters. Both AAPL and LRCX have a blow-out Q, they soft outlook hurt the share price in AH. It seems to me that at the current price levels, good Q reports are priced for many tech companies, unless they raise their outlook above the expectation, the risk after the Q report is likely on the downside. Let's see what happens to a few more tech leaders (IBM etc) in the coming days.

Focus List:

1. AAPL: reported a blow-out Q1 in AH, but outlook comes below estimated. Traded between 93.3 and 99.5, with solid distribution around 99, 97 and 95.8, and closed AH around 94.2. Watch the BM opening tomorrow to determine the direction of trading. As of now, consider L2 at bottom if it spikes towards key support 89-90, 93, and S2 on top if it spikes towards resistance around 95 and 97-98. If it breaks 93, it has a good chance to test the support zone between 89-90 (consider well over 300 million shares traded above 93); on the other hand, if it can stay above 95, it may easily test the recent high around 97.8. MA50=86.4.

2. LRCX: reported a blow-out Q4 in AH, initially spiked to just above 55, but then went down hard all the way to 49.75 before closed around 50.25. Consider CTT between 48.5 and 52.5 (300 share, 0.5 stop). Key levels: 46.7 (MA200), around 48.5, around 50.3, 51.5 (MA50), around 52.5, 54.5.

3. CEPH: L2 on pullback (300 share) if it spikes down towards 71.5 use MA50=70.7 as stop reference.

The rest:

1. BIDU: L3 at bottom if it spikes towards 119, 121.5, 100 share, $1 stop.

2. CHINA: L1 on pullback(500 share, 0.3 stop), entry zone 9.71-10.21 stop just below 9.7.

3. DVN: CTT between MA200=64.4 and MA50=67.6 (300 share, 0.4 stop), don't trade the mid range.

4. MRVL: speculative L3 at the bottom (3o0 share) if it spikes towards 19.1 stop just below 19.

5. RACK: speculative L3 at the bottom (3o0 shar) if it spikes towards 18.6 with a stop just below 18.5, IT=21.

6. RIMM: Speculative L3 on bottom if it spikes towards 124 with a stop just below 123.5 (100 share, $1 stop), IT=129.

7. SONS: L1 on pullback (2000 share) if it spikes towards 7.1 with stop just below 7.

8. SNDK: speculative SW-L2 at bottom (200 share, $0.5 stop), entry zone 42-42.51, stop just below 42, IT=46.

9. VRTX: speculative SW-S3 on top (100 share initial entry, $0.5 stop, 200 share FP), entry zone 38.5-39, stop just above 39, IT=33,

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