Wednesday, September 8, 2010

Stock market analysis

It was a nice little day of consolidation for the bulls today with the Friday's highs still holding up very well. As far as the bulls are concerned, the action this week is just what the doctor ordered and the market still seems to be digesting the big gains from last week.

S&P - The next big resistance for the S&P should be in the form of MA(200) at 1115 while 1089 - Friday's highs - is the immediate support. Also, MA(50) seems to be starting to inch upwards to provide further support.

Nasdaq - A similar story for Nasdaq as MA(50) continues to provide support and MA(200) again looms ahead.

Personally speaking, the big story for me today was JASO. I had mentioned this stock in my post on solar stocks last week (which have run since and still look good here) and again posted about it on Twitter last evening. I hope some of you readers got in as it made a big move up today on huge volume. I followed it closely in the pre market and put in a limit order at 6.86 half a minute before market open. This turned out to be a pretty good buy as it made a low of 6.84 and finished the day at 7.24. But more than the prospective gains, I am pleased with how I entered this one. Two years ago when I was still a newbie, I would have been scared and never got into a stock which had gapped up so big. All that talk about gap fill etc. But it's important to know that no stock is either cheap enough or costly enough.

I decided to do some more selling today, selling my remaining half position of NR at 9.15 for an overall gain of 3.7% and SOLF at 11.80 for a gain of 2.16%. I have been long, most of the times at margin, ever since this rally started and I just wanted to lock in the profits. I won't hesitate to go back in NR if volume begins to show up.

I will be back later with Chart of the Day.

Take care and good luck!

P.S.: In case you are interested, here are a series of posts I had written on playing gap ups a little while ago.


Anonymous said...

I've been following your blog for a couple of months now and I really appreciate your analysis and take on the markets. I personally only trade the SPY right now, so I enjoy your individual stock picks. Nice work.

positiontrader said...

Thanks for the encouraging words Anon and also thanks for being a regular reader of the blog!