Wednesday, May 21, 2008

Got patience? need direction?

Bulls were probably a bit shaken up by the end of the second big sell-off session, after all, it was pretty much smooth sailing since the the March bottom over 2 month ago.

Technically, the multi-week rally is still intact as long as the major indices close above their May lows or MA50s (SP500 around 1380 with MA50 near 1370; NASDAQ around 2410 with MA50 near 2380). Unfortunately, DOW has just broken both May low around 12700 and MA50 around 12600, following two failed attempt at reclaiming MA200, and that could be ominous for the other indices. A solid break down at these key levels could lead the market to retest the March bottom eventually, but it is premature to consider that at this stage.

Some random thoughts and ideas

1. On AAPL: I got in it (June 185 call at $6.05) primarily because of the pending release of new 3G phones in about 2 weeks. The way it is going now, there is a real possibility that it might test 170 in next few sessions. So to PCAGUY: I might consider stop out the current position if it breaks 176 tomorrow, and may take partial profits if it spikes towards 181 in the early going tomorrow and let the remaining run. I definitely look for more long position with ez=168-172, stop just below 168.

2. On DRYS: Razor is one the best trader I have seen in last several years who give a lot of focus on one stock, cumulatively, I think he has made well over 70 points on DRYS in the last 6 months or so, just some razor sharp executions. I will keep an eye on DRYS with ez=88-95. In the meantime, razor, could you kindly share your strategy on DRYS for the next several days?

3. On agriculture/fertilizers: I kicked myself for not taking short positions yesterday on AGU, POT, MON. PCAGUY: I will not go long on them until they are close to their MA50.

4. On oil/natural gas stocks: I spit on myself for not acting on APA and DVN today despite of the action plan! I will continue to look for initial short positions in this sector. Personally, look at the way the oil and many oil-related stocks have been shooting straight up lately, I feel energy/oil is approaching a mini-crash.

5. On the airline stocks: speaking of possible sizable pullback of oil, I start to look at the airline sectors, especially AMR, UAUA, CAL, for some long plays. But I have not figured out what is the best strategy here, right now I am seriously considering writing puts. Say, any folks here who can recommend the best airline stock for the bottom fishing play based on FA? Thanks!


RazoR said...

My strategy for days? I thought you dealt with hours! :D
Anyway I still have half position at 98 in drys, two scenarios, 1. Drys will retest 115 and possibly break to 130 2. It will fill the gaps down to 70 where I will load the boat.
Bought some aapl at 178 but the gap at 155 is the ideal entry. The rumor of the g3 is some kind of basterdized two way video, aka picture phone, boy the kids will love that.
Doesn't oil usually drop after labor day? thats it for now...

RazoR said...

One more observation, aapl's 50 just crossed its 200 which is bullish, and has formed a bottom channel, unless its broken, the top channel projection if you connect the dots is 250!
Drys 50 is heading up towards the 200 also and they are virtually printing money...its all up to how nasty mr big wants to get cheers...