Weekly Trading Calls -- March 23, 2008

Overall Trading Strategy for Next Week

As I mentioned in my “Weekend Notes on the Market”, with the market now survived multiple tests of the Jan’08 bottom, a counter-trend rally might be developing. Considering there are little positive fundamental changes in the macro-economy environment, the best SW-long setups are still those that are based on key support and as closes to the bottoms as possible, rather than based on the breaking-out. On the other hand, patience is needed for any SW-short setups for the ideal conditions (overbought) and entry points (near key resistances).

1. AAPL
Weekly: 2nd winning week as the volume declining for 3rd week; negative momentum receding for 6th week; nascent over-sold rebound signs;
Daily: short-term MAs turning up as it approaching the top of the 6 week trading range and MA50; momentum remained positive but overall stalled for the past 2-3 weeks; stochastic entering overbought; mild bearish divergence between volume and price in last 2 weeks;
** SW-CTT between 126/129 and 145/MA200
** CTT-DT can be considered using the following key S/R as references: 126, 129, 130, 132, 136.6, 140.

2. AMZN
Weekly: 2nd winning week following the 11-week losing streak; volumes for the 2 winning weeks relative light; negative momentum receding for 3rd week; solid over-sold rebound signs; short-term MAs in bearish formation.
Daily: momentum positive and rising; short-term MAs turning up as it closes above MA50; approaching over-bought,
** SW-S2, ez=77.8-80, IDS just above 82.4, CS about 80/MA200 on bullish candle, IT=70/72.

3. BIDU
Weekly: a big losing week after it broke the 5 week triangle formation, which ironically following a head-fake break-out of the triangle formation to the upside, confirmed the continuation of the ongoing trend; negative momentum on the rise again following 3 weeks of decline; very bearish candle formation; lingering in oversold for the last few weeks;
Daily: momentum flipped to the negative side for the first time in 5 weeks; 6 straight losing days as it approaches oversold;
** SW-S1, ez=219-238, stop just above 240, IT=180.
** DT-L3, ez=180-186, stop just below 180, IT=195.

4. CME
Weekly: 5th straight losing week on rising volume; negative momentum high but stalled for 5th week; bearish MA bow-tie formation; hammer candle with very long down shadow; in oversold but little signs of rebound
Daily: bullish momentum divergence; MAs in solid down trend formation; indicators overall neutral for near-term future
** DT-L2 if it spikes towards 440 or 420 using tight stops
** SW-L3 if it spikes towards 400, with stop just below, IT=440
** DT/SW-S2, ez=508-535, IDS just above 540 or MA50, CS just above 520 on bullish candle, IT=480.

5. FCX
Weekly: negative momentum on the rise again; stochastic crossed and headed down; broke down the 3-week trading range; short-term MA bearish but long-term MA still bullish
Daily: negative momentum on the rise; bearish short-term MA bow-tie in process; MA50 crossed down MA200; volume pattern bearish;
** SW-S2, ez=92.8-99, IDS just above 100, CS about MA50 on bullish candle; IT=80

6. GS
Weekly: a big winning week following 6 straight losing week; negative momentum receding for the first time in 8 weeks; huge bullish engulfing candle coupled with multi-year high volume indicative a bottom; solid oversold rebound signs;
Daily: momentum positive and rising; short-term MA turning up; all indicators favor more near-term upside.
** DT/SW-L2, ez=165-172.2, IDS just below 165, CS below 172 on bearish candle, IT=190.
** DT/SW-S2, ez=196-200/MA200, IDS just above 200, CS just above 198 on bullish candle, IT=188.

7. MON
Weekly: a losing week as the price range moved down a notch; negative momentum rising for 5th straight week; short-term MA turning down; stochastic crossed and headed down;
Daily: negative momentum rising; bearish short-term MA bow tie formation; bearish candle and volume pattern for recent days
** SW-S1, ez=MA10-MA50, IDS just above 114, CS above MA50 on bullish candle, IT=MA200

8. MOS
Weekly: momentum turning negative for the first time since last September; short-term MA turning down/flat; stochastic crossed and headed down; long up shadows from the candles of the last several weeks indicative of selling pressures near the top.
Daily: negative momentum persisted in the past 2 weeks and on the rise again; short-term MA turning down; stochastic headed down; closed below MA50 3 times in recent days;
** SW-S1, ez=99.5-110, IDS just above 110, CS just above MA10 on bullish candle, IT=80.

9. SHLD
Weekly: 2nd up week in a roll as positive momentum rising; indicators favor more near-term upside
Daily: momentum flipped to the positive side and rising; closed above MA50 as short-term MAs turning up; other indicators favor more upside move.
** DT-L2 (for Monday) if it breaks 104.6, stop just below 103, IT=109
** SW-L2, ez=97-102.1, IDS around 95, CS just below 98 on bearish candle, IT=114.

Snap Calls

10. ABX
** CTT between 36/38.7 and 47.4/50. The precipitous drop might pause near 40/MA200 to back fill the gap.

11. AIG
** SW-S2, ez=49.5-55, IDS just above 55, CS above 52.5 on bullish candle, IT=42/45.

12. APOL
** SW-S1, ez=61.8-68, IDS just above 68, CS above 65/MA200 on bullish candle, IT=54.

13. DVN
** SW-L2, ez=84-88.5, IDS just below 84, CS below MA200 on bearish candle, IT=95

14. FXI
** SW-S1, ez=MA10/134.8—143, IDS just above 143/MA50, CS just above 138 on bullish candle, IT=126.

15. ILMN
** Speculative SW-S2 if it spikes towards 76, IDS just above 76.7, CS just above 74 on bullish candle; IT=70/MA50.

16. LEH
** DT/SW-S3 if it spikes towards 54, IDS just above 54, IT=50
** SW-S1, ez=56.8-MA200, IDS just above 63, CS just above MA200 on bullish candle, IT=48.

17. WLT
** SW-L1, ez=44-48.2, IDS just below 44, CS just below 47 on bearish candle, IT=55