Monday, February 18, 2008

Weekly Trading Calls -- Feb. 18, 2008

Overall Trading Strategy for Next Week

As I mentioned in my “Weekend Notes on the Market”, the market has been range-bound in the past 3 weeks, and with continuously declining volumes, such pattern is likely to persist until some kind of catalysts drive the market out of this range. While I feel that there is a bit of up-side bias for next week, CTT using the key S/R near the boundaries of the 3-week trading range as entry/stop references is like the strategy with the best r/r ratios for the time being. However, one must be ready to take directional/momentum positions should the major indices break out the current range on heavy volumes.


1. AAPL
Weekly: negative momentum stalled for the 3rd week; deeply oversold; still under-performing NASDAQ but volume and candle body indicating abating selling pressure.
Daily: momentum flipped to the positive side, volumes dropped to near average with candle bodies contracting;
** SW-L3, 118-124.11, stop just below 117, IT=130
** SW-L1 if it spikes towards 110, stop just below, IT=122
** DT-S2 if it spikes towards 130/132, stop just above 132, IT=128
** DT-S1 if it spikes towards 135/136, stop just above 173, IT=132

2. AIG
Weekly: a big down week on the all-time high volume as the write-down news came out; negative momentum on the rise; significant buying seen just above its multi-year low; not oversold yet
Daily: negative momentum stalled; signs of oversold rebound,
** SW-S2, 49-54, stop just above MA50 (55.3 now), IT=40

3. AMZN
Weekly: negative momentum stalled; oversold;
Daily: momentum on the positive side; indicators mixed for the near term direction
** CTT between 67/68 and MA200 (at 80 now) with stop just across the boundaries, don’t trade the mid range

4. BIDU

Weekly: a winning weekly with volume near all time high; negative momentum stalled; near oversold; indicators mildly bearish overall,
Daily: momentum flipped to the positive side for the first time in 2008; other indicators mixed; closed just above the key MA200.
** CTT-SW between 238/240 and 280/285, don’t trade the mid-range.
** DT-L3, 255-258, stop just below 255, IT=273

5. CMG
Weekly: A losing week on heavy vol as the result of underwhelming ER; negative momentum on the rise for 7th week; not oversold yet; long tails of the candles seen for 2nd straight week indicating strong buying in the key support zone
Daily: The post ER sell-off ended with a very bullish candle formation; momentum still negative but with bullish divergence; overall technical picture still bearish
** SW-S2, entry zone =114-120, stop just above 120, IT=105

6. DHI
Weekly: mild declining on much lighter volume; positive momentum stalled; indicators slightly bearish;
Daily: the inching down declining came on much lighter volumes; negative momentum still rising, entering oversold conditions; presence of candle tails indicative of buyers; first testing of MA50 successful;
** SW-L2, entry zone=12-13.1, stop just below 12, IT=15

7. DRYS
Weekly: pre-ER run was enough for an up week on good volume; negative momentum diminishing; indicators mostly favor more near-term upside
Daily: the post-ER reaction was a big bearish Marubozu candle, which engulfed the doji candle of the previous day and together strongly suggesting the top of a 4-week running up; positive momentum stalled with signs of overbought pullback,
** SW-S2, entry zone=84.8-87, stop just above 88.5, IT=70
** DT-L2 if it spikes towards 70, stop just below 69, IT=75.

8. FSLR
Weekly: A good ER drove up a big winning week on all-time high volume; negative momentum receding; indicators mostly favor more near term gains.
Daily: momentum turned positive and rising; post-ER gap above key R around 200; closed near MA50,
** SW-L2: entry=213-220, IT=240, stop just below 213
** SW-L1 if it spikes towards 200, stop just below, IT=220.

9. GOOG
Weekly: 2nd up week on much lighter volume; negative momentum stalled, signs of oversold rebound;
Daily: momentum flipped to the positive side; indicators mostly favor more near-term gain
** SW-L3: entry=519-530, stop just below, IT=560
** SW-S2, entry=560-MA200(at 573.6 now), IDS just above 580, CS just above MA200, IT=540.

10. GS
Weekly: negative momentum on the rise; indicators mostly favor near-term downside
Daily: unabating negative momentum; in oversold with signs of rebound; clear down-trending
** CTT-SW between 168 and MA50 (at 200.2 now), don’t trade the mid range

11. RIMM
Weekly: negative momentum receding; signs of oversold rebounding
Daily: momentum stayed in the positive territory lately; seems like a short-term 2-bottom formation; indicators mostly favor upside gain; a close above MA50(near 99) may prompt a test of 110
** SW-L2, entry zone=90-95, stop just below 90; IT=110
** SW-L3, entry zone=82-85, stop just below 82, IT=MA50

12. BSC
Weekly: momentum flipped to the positive side for the first time since last November; volume pattern bullish for the past several weeks;
Daily: Friday’s high-volume rise shapes up a nice base-breaking out form; solid oversold rebound signs; momentum poised to turn positive
** SW-L2, entry zone=78-81, stop just below 77, IT=93,

Snap Calls

13. CME
** SW-S2, entry zone 579-MA200 (589 now), stop just above; IT=550.

14. SPWR
** SW-L2, entry zone=70-72, stop just below 70, IT=90

15. WFR
** SW-L2, entry zone=68-72, stop just below 68; IT=82

16. YGE
** CTT between 18 and 26 with tight stops, don’t trade the mid-range

2 comments:

Yuriy said...

Thanks,
What is the plan with you POT and MON positions?

flyingwabbit said...

Yuriy:
Though there are some bearish signs for both POT and MON, they are actually still quite bullish overall. I might stop out at even if they behave strongly tomorrow, and re-enter when the bearishness becomes more concrete.