Saturday, January 05, 2008

Trading Calls for the next week or two -- Jan. 5, 2008

Please refer to the previous post for the overall strategy consideration for the coming weeks.

A. Buy-at-bottom or CTT setup

Weekly: clear uptrend, some mild bearish divergences, huge bearish engulfing candle could spell more loss before rebounding.
Daily: Friday's action validated some bearish divergences and then some more, more downside is likely, but the expectations of next weeks MacWorld event may stir bullish sentiment.
60 min: extreme bearishness and weakness and oversold point to an imminent technical rebound.
** L2, entry zone=170-175.22, CS just below 170, IDS just below 169, IT=189
** L1: entry zone=158-162.22, CS just below 160, IDS just below 158, IT=180

Weekly: still in uptrend but upside momentum dissipating
Daily: more downside before any technical rebound
60 min: in oversold
** L2 if it spikes towards 320, stop just below 320. IT=380
** L1 if it spikes towards 300, CS just below 300, IDS below 298, IT=340.

3. CF
Bullish all around.
** L1, entry zone 100-105.5, IDS just below 100, CS below EMA10, IT=119.

4. CME

Weekly: still clear uptrend, but more decline is ahead before rebounding
Daily: 2 consecutive big down days put bulls in defensive standing with key support zone 600-610, oversold but very bearish candles point to further downside
60 min: oversold,
** L1 if it spikes towards 585, CS just below MA200, IDS just below 580, IT=640.

5. CMG
Weekly: big loss with a huge bearish engulfing candle, but uptrend still intact
Daily: Friday's big drop did a lot of technical damage to the bullish case, more downside likely before rebounding
60 min: in oversold for a while now
**L3 if it spikes towards 115 with a tight stop, IT=135
**L2 if it spikes towards 102, IDS just below 100, CS below MA200, IT=130.

6. CRM
Weekly: strong up trend
Daily: in pullback mode, more down side likely
** L1 if it spikes towards 56 or 50 use tight stops, IT=60

7. CTRP:
one of the most consistent base for buy-on-dip-then-hold play
** L1 if it spikes towards 48 or 50 use tight stops, IT=60.

8. DHI:
Weekly: still a clear down trend, but signs of bottoming out
Daily: testing the previous bottom, in oversold
** speculative L2 if it spikes towards 10, stop just below 10, IT=13.

Weekly: still a clear case of strong up trender, but last 3 weeks' candles formed the evening star, indicators point to more pullback.
Daily: overall still bullish, but negative momentum is on the rise.
60 min: in oversold.
** L1 if it spikes towards 220, IDS just below 215, CS just below MA50, IT=250

10. GRMN
Weekly: trend-reversal process developing, more downside.
Daily: short and intermediate trends all down, watch its testing MA200 around 85.6 in oversold conditions.
** L2 if it spikes towards MA200, CS just below MA200, IDS just below 85, IT=92.
** L1 if it spikes towards 80, stop just below 80, IT=89.

11. ICE
Weekly: still a clear up trender, but big bearish engulfing candle suggests more decline in the near future.
Daily: the Three Black Crow candle formation strongly signals near-term trend reversal, this coupled with increasing negative momentum does not bode well for bulls.
** L2 if it spikes toward 160/155 zone, CS just below MA200, IDS just below 150, IT=179.

12. ISRG:
Weekly: still a clear strong up trender, up volumes dwarf down volumes, but up momentum has dissipated.
Daily: looks like a head-and-shoulders formation near completion, more short-term downside likely
** CTT between 264 and 330 use tight stops, don't trade the mid range.

13. JCG
Weekly: big down week came in on light volumes, indicators point to more pullback
Daily: 6 straight down sessions on increasing negative momentum, the post-earning gap is in the test, in oversold
** L1 if it spikes towards 38 with CS just below 38, IDS just below 36, IT=MA50.

14. RIMM
Weekly: up trend flattening, more downside in the cards
Daily: gapped down and closed below MA50, candle formations suggest persistent distribution following the earning report fueled gap up. Even if it breaks 96, the downside may not be much given the latest Q report.
** L1 if it spikes towards 85 use MA200 as stop references. IT=100.

15. STP
Weekly: clear and strong uptrend despite of the abundance of sellers whenever it hits new highs.
Daily: clear up trend but some bearish divergences, momentum on the downside
** L1 if it spikes towards key support zone of 74/76, or MA50 use tight stops, IT=88.

16. WLT

** L1 if it spikes key support zone of 30/32, use MA200 as CS, IDS just below 29., IT=37

17. YGE
Weekly: still a clear up trender, but the Evening star candle formation may spell more near term decline
Daily: downside momentum on the rise, the volatility continues
** L2 if it spikes towards 30 with a stop just below, IT=38
** L1, entry zone 24-28, stop just below 24, IT=MA50

B. Short setups

Weekly: looks like a boom turn bust play, in oversold but negative momentum on the rise.
Daily: short and intermediate trend down,
** S1 if it breaks 69.5 or closes below 70, IT=MA200=64, stop just above 71

2. EXM

another crashing shipper like DRYS, similar technical picture but even weaker as it closed below MA200 for the first time in over 15 months!
** S1 if it breaks/closes below 37, IT=30, CS just above MA200, IDS just above 40.
** S1 on top if it spikes towards 40, IDS just above 41.5, CS just above 40, IT=32.

Weekly: while the uptrend still appears intact, MACD histrogram offers the first sign of the possible reversal of the inter-mediate trend, other indicators point to the downside.
Daily: sliced through MA50 with negative momentum on the rise
** S2 if it spikes towards 680, CS/IDS just above MA50, IT=620.
** S1, entry zone 699-715, stop just above 720, IT=640.

4. SU
along with other energy sector names such as XOM, SLB and DVN, last Friday's action could well be the start of an inter-mediate double top formation. Short setups on these names have a very attractive risk/reward ratio!
** speculative S1 either when it breaks 109 or spikes towards 113, stop just above 113.5, IT around 97.


Anonymous said...

wow, a lot of a amazing calls, I acted on ICE and AAPL, not sure if I should take the profits or wait for more, how long do you actually hold? or do you always wait until the IT is reached?


Gary said...

Brave call on AAPL. The stock broke the uptrend on strong volume and is now having trouble regaining the 50 DMA. I rarely trade individual stocks but if I did I'd be scared of that one. Tech has a history of topping out in late Dec. or early Jan. It certainly looks like it's following that pattern so far. Amazing how many talking heads are advocating tech right now as the market looks to be rolling over. Wasn't this the same scenario in 2000?

flyingwabbit said...


Thanks for stopping by! I hear what you were saying here, and with the back of your excellent analysis on COT, I agree with your overall view on the market.

As for the call on AAPL, just like all other long calls, it is only for catching a QUICK rebound or two, and should not be held for more than 3-5 days. While I am unsure that the tech sector is setting up for a fall like 2000, I do think that it is the right time to start building short positions when the market rallies sharply.

good luck!

flyingwabbit said...

anon 3:20 pm

I am glad that you caught some greens out of my calls. Since the bulls have been weaker in the past two days that I expected, you don't want to be too greedy on the long side here, at least raising your stops to make sure that you will have some profits in the end.