Weekly Trading Calls -- March 2, 2008

Overall Trading Strategy for Next Week

As I mentioned in my “Weekend Notes on the Market”, with failed tests of their MA50 or key resistances, the major indices are poised to end the multi-week counter trend rally and resume their primary trend (down). Until that is confirmed, CTT within the 2 month trading range along the direction of the primary trend will be the most prudent overall strategy.

1. AAPL
Weekly: an up week on good volume following 3 straight losing week; negative momentum retreating; signs of oversold rebounding; a near bullish-engulfing candle along with tweezers bottom formation; outperformed NASDAQ for the first time in a while
Daily: rising positive momentum; gapped above its MA10 on Thurs only followed by a bearish-engulfing candle on Friday; oversold rebounding on the way.
** SW/DT L2, EZ=123-125, IDS just below 121, CS just below MA10 (now near 123), IT=131
** DT-S2 if it spikes towards 140, stop just above, IT=136.

2. BIDU
Weekly: an up week on good volume; nascent oversold rebound signals; negative momentum stalled for the forth straight weeks;
Daily: positive momentum stalled; volume pattern bullish for the past few weeks; resistance of MA200 clear; indicators mostly bullish for the near future.
** DT-L3, EZ=248-252, stop just below 248, IT=260
** SW-L2, EZ=238-245, stop just below 238, IT=260.
** DT/SW-L2 if it breaks 265 or closes above MA200 with bullish candle, IT=285
** DT/SW-S2 if it spikes towards 300/MA50, stop just above 300, IT=285.

3. CF
Weekly: a losing week on good volume; near engulfing candle; long up candle shadows for 2 straight weeks; positive momentum stalled; in overbought; strong and clear up trender
Daily: second bearish-engulfing candles in the last several days; volume pattern turning bearish; dissipating positive momentum; clear signs of overbought pullback;
** SW-S2, EZ=122-128; IDS just above 132, CS just above 128.5, IT=MA50/112
** DT-S3 (for Monday) if it breaks 121.7, stop just above 123, IT=115.

4. DHI
Weekly: a losing week on heavy volume; positive momentum diminishing; most indicators mildly bearish; bearish candle pattern for Feb.
Daily: on the verge of forming a short-term double top; bearish divergences in MACD/Stochastic in recent weeks; momentum flipped back to the negative territory; stochastic sell signal; closed just above MA50.
** SW-S2 if it breaks 13.4 or closes below MA40/14 with a bearish candle, IDS just above 15; IT=11.5
** SW/DT-S1 if it spikes towards 15, stop just above, IT=12

5. DRYS
Weekly: the 5 week rally came to the end as a bearish-engulfing candle capped a losing week; momentum remains negative; other indicators mixed for the near future; closed at the low boundary of the 3 week trading range.
Daily: momentum just flipped to the negative side; solid short-term top around 88.5; indicators mostly favor near future decline.
** DT-L3 if it spikes towards 70, stop just below, IT=72
** SW-S3 if it closes below MA50/MA200 (currently converging around 71.5) with a bearish candle, IDS just above 75, CS just above 72, IT=65
** SW-S2 if it spikes towards 80, stop just above, IT=71
** SW-L2 if it spikes towards 65, stop just below, IT=MA50.

6. DVN
Weekly: 5th straight up week as the volume jumped to 5 month high; positive momentum rose sharply; both stochastic and RSI2 overbought but yet show signs of backing down; the up shadow gets longer for 4 straight week indicating motivated sellers as it moves higher;
Daily: steep rising continues; bearish divergences in the positive momentum stalled and RSI2; stochastic in overbought with nascent sign of pullback;
** SW-S2, EZ=112 -119, IDS just above 120, CS just above 115, IT=100

7. FSLR
Weekly: negative momentum retreated slightly; indicators neutral
Daily: momentum is poised to turn negative; most indicators short-term bearish;
** SW-S2, EZ=212-217, IDS just above 220, CS just above MA50 with a bullish candle; IT=201
** SW/DT-S2 if it breaks and closes below 200 with a bearish candle, stop just above 201, IT=185.

8. GOOG
Weekly: a “false” report sent the stock down a notch with volume spiked to 10 month high; negative momentum high and rising a bit; lingering in deep oversold conditions for the past 3-4 weeks;
Daily: a classical hammer candle with high volume on money may signify a near-term bottom; bullish divergence in momentum;
** SW-L2 if it spikes towards 450, stop just below 447, IT=480
** SW-L1, EZ=420-440, IT=460
** SW/DT-S3 if it spikes towards MA10/500, IDS just above 500, CS above MA10 with bullish candle, IT=470.

9. GS
Weekly: 4th straight losing week as it broke down the lower boundary of the 2-month trading range; negative momentum continues to rise slowly; in oversold but no signs of rebound;
Daily: a failed attempt to break out the tight 2 week trading range on the Thursday followed by an ominous breaking down out of the range on the Friday; momentum near neutral; indicators mostly bearish
** SW-S2, EZ=171-180, IDS just above 181.5, CS just above MA10 with a bullish candle; IT=160
** DT/SW-L3 if it spikes towards 160, stop just below 157, IT=168.

10. MA
Weekly: solidly broke its 3 week trading range as the negative momentum rising; most indicators favor more near-term decline
Daily: negative momentum on the rise; entering oversold;
** DT/SW-S2 if it spikes toward MA50 (around 199), IDS just above 202, CS just above 200 with a bullish candle; IT=170/MA200.

11. NUE
Weekly: the 5 week winning streak was snapped by a reversed hammer candle on good volume; signs of overbought pullback; positive momentum still rising
Daily: the big black candle on the Friday coupled with the 2 candles preceding it with sizable up shadow may signify a trading top; long running positive momentum is poised to flipped to the negative side; stochastic is crossing down from the overbought area.
** SW-S1, EZ=65.5-68, IDS just above 69, CS just above 66.5 with a bullish candle, IT=62

12. TBSI
Exactly the same story as DRYS
** SW-S1, EZ=35.8-37, ICS just above 40, CS just above MA200 on bullish candle, IT=MA50/30

13. WM
Weekly: 4th straight losing week as it solidly broke the 5 wk trading range; positive momentum retreating; stochastic crossed down; most indicators bearish for the near term
Daily: broke and closed below MA50 on Friday; negative momentum on the rise; approaching oversold
** SW-S1, EZ=14.8-15.8, IDS just above 16.7, CS just above MA50 with a bullish candle; IT=12.5

Snap Calls

14. AMZN
** SW-S1, EZ=67-73, stop just above 73.5, IT=60

15. BSC
** SW/DT-L3 if it spikes towards 77, stop just below 76, IT=83/MA50

16. COF
** DT/SW-S3 if it breaks 45 or closes below 46 with bearish candle or when it spikes towards 47; IDS just above 48.3, CS just above MA50, IT=40.

17. CRM
** SW-L2, EZ=56-58, stop just below 56/MA50, IT=62.

18. CTRP
** SW-L1, EZ=56.5/MA10-58.2, IT=70

19. ILMN
** SW-L1, EZ=65-66.6, IDS just below 65, CS just below MA50, IT=74

20. ISRG
** CTT between 290/300 and 255/264, don’t trade the mid range.

21. MON
** SW-S1, EZ=118-123, stop just above 124, IT=100

22. MOS
** SW-S3, EZ=113.8-116, IDS just above 120, CS just above 116 on bullish candle, IT=100

23. RIG
** SW-S2, EZ=141-144, stop just above 145, IT=MA50 (currently around 135.2).

24. RIMM
** DT/SW-L2, EZ=98-101, IDS just below 98, CS below MA50 (100.8) with a bearish candle, IT=110

25. SGR
** SW-S1, EZ=65.8-68, stop just above 69.3, IT=MA50 (59.1).

26. SOLF
** SW/DT-L3 if it spikes towards 10, stop just below, IT=14.

27. SPWR
** SW/DT-L3 if it spikes towards 60, stop just below, IT=65/70