Weekly Trading Calls -- March 16, 2008

Overall Trading Strategy for Next Week

As I mentioned in my “Weekend Notes on the Market”, the market’s direction in the coming weeks will be decided by the battle between the FEAR factor and the Fed factor. Barring a massive failure of the market, with the rising fear and extreme bearish sentiment on both the Wall Street and the Main Street, coupled with the ever determined and desperate Fed, I suspect that any precipitous sell-off in the next few days may offer more profitable opportunities from the long side than the short side. However, when trading from the long side, one must be patient with the setups, disciplined with the stops, and quick with the profits-taking. Even though most of my calls are for SW trading, one should focus more on the stop-loss and IT, as the spiking volatility could easily make the IT of the SW setups reachable within DT or overnight trading time frame.

1. AAPL
Weekly: an up week on relatively light volume as it outperformed the NASDAQ for the third straight week; negative momentum abating for the 5th straight week; in oversold with nascent signs of rebounding;
Daily: stayed above the MA10 for most of the week; momentum remained on the positive side; short-term MAs turning flat; volume pattern for the last 3 weeks overall bullish
** DT/SW-CTT between 119 and 130/132, bias neutral
** DT/SW-L1 if it closes above 130 on bullish candle, IDS just below 128.5, CS just below 130, IT=MA50
** DT/SW-L2 if it spikes down towards 115/117, IDS just below 115, CS below 118 on bearish candle, IT=123.

2. AMZN
Weekly: first up-week snapped a 10-week losing streak; out-performs the market for the 2nd week; negative momentum started to diminish for the first time in weeks; a near morning star candle formation; in oversold with nascent signs of oversold-rebound;
Daily: momentum flipped to the positive side and risking; oversold rebound well on the way; bullish momentum divergence; other indicators bullish for the near future
** DT/ST-L1, ez=64-65.2, IDS just below 63, CS around 64 on bearish candle, IT=74/MA50

3. APOL
Weekly: 1st winning week following 5 straight losing weeks; bullish-engulfing candle formation; negative momentum stalled; in oversold with nascent signs of rebounding;
Daily: momentum just turned positive; solid signs of oversold rebound; indicators mixed.
** DT/SW-L2, ez=54-56.2, IDS just below 53.5, CS just below 56 on bearish candle; IT=62/64.

4. BIDU
Weekly: outperformed the NASDAQ with an winning week; negative momentum diminishing for 4th straight week; in oversold with solid signs of rebounding; volume pattern for the last several weeks bullish;
Daily: broke out the 4 week triangle formation on rising positive momentum; MA50 is poised to cross down MA200 as they converge around 270.
** DT/SW-L2, ez=250-263, IDS just below 247, CS below 260 on bearish candle, IT=280
** DT/SW-L1 if it breaks 285 or closes above 280 on a bullish candle, IT=300

5. DRYS
Weekly: 3rd straight losing week as the negative momentum on the rise again; stochastic crossed down and headed down; three black crows candle formation; other indicators mostly bearish
Daily: down-hill ever since closing below MA50 and the cross-down of MA50 over MA200; MAs bearish bow-tie formation; momentum negative but stalled; lingering in oversold but no signs of rebounding yet.
** DT-L3 if it spikes towards 50, IDS around 48, CS around 50 on bearish candle, IT=56
** SW-S2, ez=69.8-73, IDS just above MA200, CS just above 70 or MA50 with bullish candle; IT=65/60.

6. GS
Weekly: 6th straight losing week as the volume spiked to just shy of multi-year high; negative momentum rising for 7th straight week; in oversold with no signs of rebounding;
Daily: broke and closed below the Aug’07 bottom; MA formation in full-blown bearish posture; bullish divergence in momentum; not oversold;
** DT/SW-L3, ez=140-151.2, IDS just below 138, CS just below 150 on bearish candle, IT=165
** DT-S2 if it spikes towards 170, IDS just above 172, IT=165.

7. ILMN
Weekly: 2nd losing week in a roll on rising volumes; momentum just turned negative; stochastic crossed and headed down out of the over-bought area; still a clear up-trender
Daily: dropped and closed below MA50 on high but retreating negative momentum; oversold rebounding on the way; MA bearish bow-tie formation in process;
** DT/SW-S2, ez=68.8-72, IDS just above 72, CS just above 70 on bullish candle, IT=62.

8. ISRG
Weekly: a winning week snapped the 3-week losing streak as the volume rose; bullish-engulfing candle; negative momentum started retreating; other indicators mixed;
Daily: momentum poised to turn positive; reclaimed MA50; indicators overall mildly bullish.
** DT/SW-L3, ez=260-266, IDS just below 255, CS just below 270 on bearish candle; IT=300

9. MON
Weekly: an up week on high volume following 2 straight losing week; negative momentum rising for the 4th week; stochastic crossed and headed down; spinning candle showing hesitation on both bulls/bears sides.
Daily: stayed below MA50 entire week which was the first in a long time; negative momentum receding; nascent bearish bow-tie formation for MAs; ongoing oversold rebound;
** SW-CTT between 90/MA200 and 120/124
** DT-S2 if it approaches key R around 115, 120 unless it closes above MA50 on bullish candle.

Snap Calls

10. CME
** DT/SW-CTT between 420/440 and 520/540, don’t trade the mid range, weekly oversold, daily with bullish divergence in momentum.

11. CMED
** SW-S2, ez=42.8-47, IDS just above 48 or MA50, CS just above 45 on bullish candle, IT=38/MA200.

12. CROX
** SW-L2, ez=18.1-19.2, IDS just below 18, CS just below 18.6 on bearish candle, IT=24/25.

13. FSLR
** DT/SW-CTT between 174/176 and 215/216, don’t trade the mid-range, bias mildly bullish.

14. FXI
** SW-S1, ez=132.5-140, IDS just above 143, CS just above MA10 on bullish candle, IT=110.

15. RIMM
** DT-L2 if it spikes towards MA200 or 90, IDS just below 90, CS below MA200 on bearish candle, IT=97 or MA50.