Sunday, February 03, 2008

Weekly Trading Calls – Feb. 3, 2008

Overall Trading Strategy for Next Week

For the reasons discussed in my Weekend Notes on the Market, I feel that the market is poised to further extend the rally in the coming days. However, the market is approaching overbought, and as long as the macro-economic environment remains dire, the rally will be bumpy and volatile, therefore, instead of chasing the bulls, one should consider scale-in approach and use key S/R levels as entry and stop references.

Weekly: 1st up week on average volume following 4 straight high volume losing week; negative momentum still rising, approaching oversold, a bullish Harami candle this week and a Tweezers bottom formation point to the possibility of short-term bottom near 126;
Daily: diminishing negative momentum, up vol notably lighter than down vol, weak rebound from prolonged and deep oversold conditions
** DT/SW-L2 if it spikes toward 130 with a stop just below, IT=135, r/r=1:5
** SW-L1 if it spikes towards 127 with a stop around 126, IT=132, r/r=1:5
** DT-S3 if it spikes towards 140, stop just above 141, IT=136, r/r=1:4
** SW-S2, entry zone 145-150, IDS just above 150, CS just above MA200 (near 146 now), IT=140,

2. ANF
Weekly: well defined trading range since Oct’06 with slightly overall bullish bias, bullish candles and indicators point to further near-term gain,
Daily: positive momentum on the rise, in overbought, vol and candle formations highlighted bullish tones.
** SW-S1, entry zone 84-86, stop just above 86, IT=72, r/r=2:12. No matter how strong this retailer is (it is one of the strongest), like Razor said, this NOT an environment for a consumer-driven company like ANF to break out the long held trading range. ER due Feb. 14 AH.

Weekly: negative momentum continues to rise; indicators mildly bearish, not in oversold yet
Daily: negative momentum dissipating, solid support seen near MA200,
** CTT between MA200 (stop just below 249) and key R at 300 (stop just above), don’t trade mid range.

Weekly: a big up week with rising vol and extending bullish candle, negative momentum starts to recede, solid signs of oversold rebound on the way
Daily: overall bullish candle formation and vol actions in the past 3 weeks, closed above MA50, approaching overbought.
** SW-L2, entry zone 65-68.1, stop just below 64.5, IT=74
** SW-S2, entry zone 80-83, stop just above 85, IT=75

Weekly: 1st up week on relatively light vol follow 5 straight down weeks, negative momentum still on the rise,
Daily: negative momentum dissipating, volatility dropping, indicators slightly bearish overall
** SW-S1 if it spikes towards 220, stop just above MA50, IT=200
** DT-S3 if it spikes towards 200, stop just above, IT=192
** SW-L3, entry zone 160-167, stop just below 160, IT=179.

My last week’s analysis was pretty much on the money.
Weekly: the disappoint ER extended the losing streak to 5 week with vol and negative momentum continue rising; bearish candle formation also favors more near-term loss, in oversold but may not matter as it trends down.
Daily: the high vol decline continues, negative momentum wanes a bit, in oversold.
** SW-S2, entry zone 528-550, stop just above 560 or MA10, IT=480

Weekly: 2nd straight up week on relatively light vol, negative momentum stalled, solid oversold rebound on the way
Daily: Momentum flipped to the position side, move averages in firm down-trend formation.
** SW-S2 if it spikes towards 80, stop just above 80, IT=71
** SW-S1 if it spikes towards 85, stop just above MA200/50 (projected to be around 88), IT=75

8. GS
Weekly: negative momentum abating, solid oversold rebound on the way
Daily: rising positive momentum, approaching overbought, vol decreasing as it moving up in the last 3 sessions, closes above MA50
** SW-L1, entry zone 199-203, stop just below MA10, IT=210

Its latest ER is a perfect example why some analysts on the Wall Street are either incompetent or have sinister hidden agendas.
Weekly: extreme volatile week ended on a high notes because of a stellar ER, solid oversold rebound on the way
Daily: momentum flipped to the positive side, indicators favor more upside movement; but this post-ER day has the lowest vol among others,
** Speculative SW-S2 if it spikes towards 340, stop just above, IT=300
** SW-L1 if it spikes down towards 280, stop just below, IT=300

10. SPF
This company seems so destined to file bankruptcy that nearly 70% of float is short, as it has just started to rally with the rest of homebuilders, its upcoming ER on Tuesday will kill either bulls or bears.
Weekly: 3rd straight winning week on rising volume and positive momentum; bullish candles with body continues expanding, oversold rebound in full force
Daily: classic case of the base breaking out pattern, positive momentum on the rise, in overbought,
** Speculative SW-L3, entry zone 4-5, IT=8, stop just below 4, r/r=1:3

Stalking list
The following are the stocks I will closely monitor as they approach crucial levels.

11. CROX (SW-S1)
It has built a decent bottom at 27/30 and now breaking out, but I expect the rally to be stalled in the key R zone from 39-42, MA50 around 36.5, MA200 around 46.4. IT=31

12. TIF (SW-S2)
Another retailer on the rebound. Key R zone=44-48, MA50 around 43.3, MA200 around 48.8. IT=40

13. UA (SW-S1)
Yet another retailer. Key R zone=45-50, MA50 around 43.5, MA200 around 51.8. IT=37

14. SHLD (SW-S2)
Key R zone 120-130, MA50 around 104, MA200 around 140, IT=MA50

15. TBSI (SW-S1)
Key R zone=36-44, MA50 around 31.9, MA200 around 35.6, IT=30

16. YHOO (speculative SW-S1)
I really doubt that the deal with go through, without which YHOO is probably worth low 20's. With the offer price around 31, it seems that a short between 29-31 has a pretty decent r/r. Bidding war? That might be even better.


Yuriy said...

Thanks for the write up. No RIMM though?

Anonymous said...

in GS@200.01

Anonymous said...

Thanks for sharing!


Yuriy said...

oh boy, you must be hurting now...

razor said...

Is it good if my monitor is bleeding? Amazing "they" didn't pull down the market on Friday, but "they" are in such collusion "they" decide how to get their money out and pull the trigger...stocks on sale again!
If we do crash further, patience and timing will be a big time profit...

Yuriy said...

So what are your comments on timing?What do you see happening?

razor said...

When you see prices at multiyear lows, intc@18, altr@15 aapl@105 total capitulation, a real big down day etc...the market could slowly move down to 11k by mid year that would be time to move all in, probably won't happen, but I won't invest my 401k out of idle until mid year...will be interesting to see if they sell into the close today...

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