Saturday, November 03, 2007

Trading Calls-- Nov. 5-9, 2007

On the market:

The market got its rate cut wish and promptly rallied on Weds, but a steep and high volume sell-off pained a less bullish picture for the coming days. Significant divergences among major indices emerged last week as both DOW and SP500 losing over 1.5% while NASDAQ made slight gain. The divergence can be attributed by new concerns in financial sector and continuous strength in tech sector.

On the weekly charts, both DOW and SP500 show the bearish impact of the bearish-engulfing Marubozu candle of Oct. 14 week with signs of more follow-through; the NASDAQ is still very bullish with increasing momentum.

On the daily charts, the bearish-engulfing Marubozu candle resulting from the post rate-cut sell-off significantly dampened the hope that both DOW and SP500 would join NASDAQ in making new highs, furthermore, as DOW/SP500 closed below their EMA50, it seems that they are poised to make a lower low there after making the lower high this week. The rebound on the Friday clearly shows that key support is very much there for both DOW (around 13400) and SP500 (around 1490), and until these supports are broken through, with NASDAQ's strength, the major indices may attempt another rally for new highs.

With rate-cut done and earning reports slowing down, the market is probably going to focus on the financial sector and the health conditions of consumer spending in the coming weeks. Unless the NASDAQ start to come down and DOW/SP500 break the key support levels, the battle between bulls and bears will intensify in the coming days. With that in mind, the best trading strategy right now is probably to open to both long and short trades using key S/R as entry/stop references, and be nimble to take profits, and try to shorten the holding time.

Trading calls

1. AKAM: weekly and daily bullish, 30/60 min neutrual
** DT/SW L1, entry zone=34.5-35.5, CS just below 35, IDS just below 34, IT=40.

2. AKS: weekly posted first real bearish engulfing candle in over a year period, with many indicators point to further downside; daily all bearish; 30/60 min all bearish but with signs of stablization.
** DT/SW S2 on rebound, entry zone=49.9-51.9, stop just above 52, IT=42

3. AMZN: weekly on the verge of confirming the reversal of the long up trend; also bearish in all other time frames.
** SW S1 on rebound, entry zone=89-92, stop just above 92, IT=83.5
** DT S1 if it breaks key support just above 83, IT=79/80.

4. CROX: the post-earning plunge marked the reversal of the fortune for this stock. Bearish all around, but near-term bottom around 44 seems tentative.
** DT S1 on rebound it it stays below 50
** DT L2 if it breaks 50, but be nimble at profit-taking
** SW S1, entry zone 53.8-55, stop just above 56, IT=47.

5. DRYS (focus stock, currently shorted near 113 during the closing moment on Friday):
weekly still bullish but many indicators show developing bearish divergences; daily has several high volume sell-off caused extreme bearish candles seem to confirm the short-term top around 130, downside momentum on the rise and was the first since it Sept break-out; 30/60 min bearish but in over-sold position. Technically, the stock is at a crucial point here, a break of 110 level will almost guaranteed a test of recent lows between 103.46 and 107.75. However, I tend to believe that its first test of EMA50 (currently at 98.6) will be successful.
** for the holding position, CS just above 117, IDS just above 119.5. But I will consider exit the position early during the Monday session if it fails to at least break the 112.5 low for the last two sessions. Will take partial profit if it breaks 110 and spikes down towards 108, and may completely exit if it spikes towards 103, and possible reverse the position near EMA50 with a small initial entry and tight stop.
** DT S2 on rebound, entry zone=117-119, stop just above 120; IT=113
** SW S2 on rebound, entry zone=126-129 stop just above 131.5, IT=113

6. GRMN: the post-earning plunge may mark the reversal of the long up-trend. Weekly chart is confirming the trend reversal; daily also bearish with increasing negative momentum; 30/60 min point to rebound from the oversold area.
** DT/SW S1 on rebound if it spikes toward key resistances around 102/103, around 105, and around 109/110.
** DT S1 if it breaks the key support near 95, IT around 92?

7. SLB: weekly is confirming at least the temporary reversal of the up trend with increasing negative momentum; daily also bearish but shows firming of the short-term bottom near 95; 30/60 min mildly bullish but in overbought region.
** Speculative S3 if it spikes towards 102 or 107 with stops just above, IT=92.

8. SNDK: weekly bearish but negative momentum stalled and some indicators point to more rebound; daily suggests more rebound on the way; 30/60 min all suggest further rebound.
** DT/SW S1 if it spikes towards 47/48, with stop just above 48, IT around 42.

9. TIF: the bad news on the wall street translate into less lavish bonus fuled holiday buying binge at its main store in NYC? Weekly chart on the verge of confirming the trend reversal, bearish indicators point to further downside; daily more bearish with increasing negative momentum.
** DT/SW S1 on rebound, entry zone=51-53, IDS just above 53.5, CS just above 51 with a bullish candle., IT around 47.

10. UA: the post-earning rebound could not be sustained. Weekly show confirmed down trend with increasing negative momentum; daily also bearish, but 30/60 min in oversold region.
** DT/SW S1 on rebound, entry zone=58-61, CS above 61, IDS above 62, IT=53.

11. WLT: the post-earning rally propels it to new high and screaming bullishness.
** DT SW L1 if it spikes towards 32.5/33 use 32 as stop.

Eyes on the shipping sector:

1. TBSI: very much like DRYS; earning report on Nov9? A break-down through 58.5 may drive it to test 51.
** DT SW S2 on rebound, entry zone=62-63.5, IDS just above 64, CS just above 63, IT=58.

2. EXM: very much like both DRYS and TBSI; if it breaks down 63.1, it will test 60.

3. DSX: much stronger than other player in the sector...

Next Weekly earning plays:

1. CTRP: Nov 7, AMC, bullish everywhere and making new highs. It has always been a textbook buying on dip play, will this time be different?
KEY Support: around 45, 48, 51, 54,

2. SONS: Nov 8 AMC. Last Q was a disaster, but it has been on recovery, will this Q report support a perfect cup-n-handle formation?
Key S/R: 5.5, 6, 6.5, 7, 7.2-7.5, 8, 8.5

3. NVDA: Nov. 8. arguably the strongest in the dismal semi sector, it always delivers on the earnings, will this time be different?
KEY S/R: 30/31, around 32.5, around 33, around 36, 39.67 (high)


Anonymous said...

Hey Man,

All calls are excellent.


Anonymous said...

Anyone who has better experiences with different brokerage?