Weekly Trading Calls -- Feb 24, 2008

Overall Trading Strategy for Next Week

As I mentioned in my “Weekend Notes on the Market”, with the big boys continue to stay put, the negative and spreading macro-economic headlines and the solid signs of buyers around both Mid-Jan and early Feb lows determine that the market may remain range-bound for the near future. CTT will continue to be the best overall strategy until the market breaks out of the range on heavy volumes.

1. AAPL
Weekly: went down another notch with new low but managed to close above the previous low; continues to under-perform NASDAQ with its 3rd straight losing week but volumes continue to shrink; negative momentum high and un-abating; both stochastic and RSI in deep oversold conditions but no concrete signs of rebounding yet;
Daily: clear bearish volume and candle patterns; most indicators favor more downside movement; momentum still in the positive territory
** SW/DT-S2, entry zone 122-MA10, IDS just above 126, CS just above MA10
** SW/DT-S1, if it spikes towards 130/131, IDS just above 132, CS just above 130, IT=126
** SW/DT-L3 if it spikes towards 110, stop just below, IT=116.

2. AMZN
Weekly: 8 straight losing weeks but volumes declining for the past 4 weeks; extended stay in deep oversold conditions; negative momentum high but stalled for the 3rd week
Daily: momentum positive but diminishing; candle formations has bearish bias.
** CTT between 64/65 and MA200/MA50 (converging around 81) with tight stops, don’t trade the mid-range.

3. BSC
Weekly: momentum flipped to the positive side last week and now rising; long and rising candle tails highlighting the presence of buyers at those levels; stochastic just crossed down;
Daily: solid signs of continuation of oversold rebound; closed around MA50; candle formation has bullish bias; momentum just flipped to the positive side
** SW-L2, entry zone=78-83.6, IT=92.

4. DRYS
Weekly: another up week on decent volume continuing the oversold rally started just below $50; a winning week on light volume; negative momentum nearly dissipated; most indicators bullish for the near future
Daily: positive momentum stalled as it rallied back towards the post ER-high; lingering in the overbought region for the past 2 weeks; moving average in solid up trend formation.
** CTT-SW between MA50/MA200 (converging around 71) and 94.8-100; stops just below 70 or above 100, don’t trade the mid range.

5. FSLR
Weekly: a week with modest decline on modest volume; negative momentum retreating; indicators mostly favor upside for the near future.
Daily: the down drift following the big post-ER run-up progressing on declining volumes; most indicators mildly bullish
** SW/DT-L3 if it spikes towards 200, stop just below, IT=MA50
** SW/DT-L2 if it spikes towards 180, stop just below, IT=196

6. GOOG
Weekly: negative momentum remained high but stalled for 3rd straight week; candle formation favors continuation of the down trend; in oversold
Daily: candle formation clearly bearish; positive momentum dissipated; buyers abundant around 500
** SW/DT-S2, entry zone 524-534, IDS just above 540; CS just above 535, IT=500/480

7. NUE
Weekly: 5 straight winning week that started below 48; positive momentum rising; both stochastic/RSI in over bought; indicators favor more near-term gains.
Daily: positive momentum stalled; lingering in overbought condition for last 3 weeks; indicators mostly favor most upside
** DT-L2 if it spikes down towards 62/MA10, stop just below 62, IT=65
** Speculative SW-S1, entry zone 68-72; IDS just above 72, CS just above 70 on bullish daily candle; IT=60.

8. RIMM
Weekly: a big up week on average volume; signs of well-progressing oversold rebound; negative momentum retreating; candle formation favor more near-term upside
Daily: rising positive momentum; approaching overbought;
** DT/SW-L2, entry zone=100-105, stop just below MA50; IT=118

Snap Calls

9. AIG
SW-S1, entry zone=51.9-56, IDS just above 56, CS above MA50 when the candle is bullish (at 54.3 now).

10. BIDU
CTT between 215/223 and MA200/280, don’t trade the mid-range.

11. CTRP
Speculative SW-S2, entry zone=55.88-59, stop just above 60, IT=46, hold over the ER on Feb. 27; I suspect while the Q4 maybe fine, the guidance of Q1 would be bad during the national wide lasting wintry conditions during the peak holiday season. Prepare to reverse to the long side from 40-42 to play for the summer Olympic season.

12. GS
CTT between 157/166 and MA50, bearish bias, don’t trade the mid range.

13. ISRG
CTT between 270 and 298/308, don’t trade the mid range.

14. MON
Speculative SW-S3, entry zone 119-129, stop just above 130, IT=110/100

15. RIG
SW/DT-L2 if it spikes towards 131, stop just below 130, IT=140

16. TBSI
SW-S2, entry zone 41.8-44.8, stop just above 45, IT=35