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.

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

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


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

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.

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.

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


Yuriy said...

What is the plan with you POT and MON positions?

flyingwabbit said...

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.