Sunday, February 28, 2010

Weekend watchlist

Let's start with the airline stocks first - a sector that the regular readers of this blog know that I have been really bullish on the last few weeks. LCC has probably been my most traded stock this year, and I have also had positions in AMR and UAUA during this time period. In fact, heading into tomorrow, I hold a position in LCC. Airline stocks, generally speaking, broke out on Friday and are looking good to run some more.

Leading the way on Friday was UAUA. I had put up this set up last week too calling it a buy if it crosses 16. I somehow missed the move but I hope some of you readers were able to profit from it! It did breakout after 16 and the volume was good too. Clear skies up ahead! Sorry, couldn't help it :)

LCC was another stock that I had kept posting about. 7.20 was the watch point for this point and I did enter it on Friday at this point. It did break through this resistance and is at a 52 week high. I would like to see some more volume come in though in the next couple of days. It had a very bullish volume pattern throughout the month of February. Keep your eye on this one. 7.20 should act as support now.

AMR - Broke through the 9.15 resistance on good volume. Also on 52 week highs and expect it run from here.

CAL - Nice bounce off MA(50). Lagging behind the rest of the airline stocks a bit. Could breakout if it manages to cross 21.

DLTR - Like the pullback on low volume and how the support held. A buy if it manages to break 56.50.

For my thoughts and strategy on the overall market for the week ahead, please see here.

Take care and good luck next week!

Saturday, February 27, 2010

The week ahead

It promises to be an interesting week ahead. MA(50) is the overhead resistance in all the market indices. I don't expect the bears to give up that easily whereas the bulls were impressive last week even in the wake of some negative news. No matter who wins, I expect it to be a tough fight and hopefully we will have a clear winner by the end of next week. The more we go on churning below MA(50), the better I suspect it is for the bulls. I saw a lot of impressive long setups or breakouts on Friday, which is making me lean bullish going into next week. I will be back with these setups and a list of some other stocks to watch out for next week tomorrow.

S&P - I am bullish until 1085 breaks.

QQQQ - Very similar to S&P except for the bearish volume pattern.

DJI - Similar to the above two charts. Again, watch out for MA(50).

XLF - I have a feeling that if we are to go ahead, it will be financials that will have to lead the way. It would be nice to see some volume come in though.

USO - Impressive last week but an important resistance lies ahead. Watch out for it!

GLD - Nice bounce off MA(50) but again, an important resistance level lies straight ahead.

To wrap it up, its MA(50) levels on individual indices that everybody would be concentrating on next week and so should you! I will remain bullish and keep on going long until the plays stop working. Why fight the markets? And even if you are leaning bearish, why try calling the top? Better to wait for a break of an important support level if you wanna  go short. As I had written a little while back - Trade what you see, not what you think.

Take care and enjoy the weekend!

Feb 22- Feb 26 completed trades

3 profits, 4 losses - +3.77%
Average Profit - 3.22%
Average Loss - -1.47%

Total account up 8.30% YTD (after commissions)

Open Positions: NEP, LCC, WFMI, NR, DLTR

The numbers above don't look too bad, actually I am surprised by how decent they are as I had thought I had done much worse than this, but I am very disappointed with the way I traded this week. In a nutshell, I overtraded. As simple as that. Granted this week was very tough to trade, but that is all the more reason to stay on the sidelines. This impatience and looking to making a fast buck is what I must correct the coming week. 

I will be back later this evening and tomorrow with the market review and what to expect next week and also a list of some potential breakout set ups for next week.

Take care and enjoy the weekend!


1) The table shows only completed trades of the week. The positions that are still open will be accounted for in the week that I close them.
2) The YTD calculation includes the open positions. I just take my account value at end of Friday and calculate it. So, it also includes commissions which do matter a lot to a small account like mine.

Which other blog reports results after commissions? :)

Friday, February 26, 2010

A busy day indeed

Since I am going to do a comprehensive market review sometime this weekend, like I usually do, let me get straight to how my day went. It was an interesting day indeed though the markets were determined not to make a move in either direction.

I started today by taking a very small position in DLTR, a chart I pointed out yesterday. It is a very small position as I had planned to add on new highs, which didn't happen. I still really like the chart though. Check it out if you haven't done so already.

Then I sold my PMI position at 2.88 for an overall gain of 2.6% before the housing numbers came out. This turned out to be a smart move as the housing numbers were quite horrible. So far, so good.

Then I tried to make a quick buck in MTG, but instead had to settle for a loss of 0.65%. I know what you are thinking. These quick scalps never work for me but still I seem to be making the same mistake again and again. Its been a very disappointing week in this regard and I have really overtraded. Luckily, my tight stops have meant I haven't got much hurt by these misadventures. Long story short, I am determined to correct this wrong in my trading next week. This quick trade meant I was done with my day trades for the week.

Then I saw NR down a little too much and decided to jump in at 5.16. A decent sized position. Basically, it had fallen over 3.5% on a day when oil was doing really well. It closed at 5.17, so no damage done. I admit calling bottoms is really not my speciality.

I thought I was done for the week here. But then I realized that LCC was having a serious crack at 7.20. I had been waiting patiently for this the entire week. I have posted this chart very regularly in this blog, and in fact, posted it even last night. So, I took a decent sized position in it despite the fact that I was going on margin now. But I was very confident about this play.  It certainly broke out after that and closed at 7.35. I hope some of you readers were able to take advantage of this move up too!

By now I was around 135% long, a situation I knew wouldn't be comfortable with sometime during the weekend. So, I decided to take some profits in WFMI at 35.50, selling 1/3rd of my position and now I am 112% long heading into the weekend. This is the first time I have been on margin this year and am surprisingly, quite comfortable.

I will be back this weekend with the weekly trades review, the market update and some setups for next week. Have a great weekend!

Thursday, February 25, 2010

Some stocks for your watchlist

Am extremely tired as its been a long day, so am not writing my comments above the charts as I usually do. However, I do think the graphs are well marked making the entry and stop points obvious. Notice the high volume in all the setups except LCC.

For the daily review and some more stocks that I like, please see Bulls win on a red day.

Good Night!

Bulls win on a red day

Yup, that's how I see it my dear readers. It was a red day, but I see it as bullish. Why, you might ask? Well, here is my rationale. The bears had an excellent opportunity today to take control of the markets but they didn't do anything with it. They had everything going for them in the morning:

(a) Fear - Speculation about Greece
(b) News - Bad jobs report
(c) Markets were close to overbought entering today
(d) TA - It would have been a perfect fall down from 50 day MA.

The bears were in complete control in the early hours yet the market closed close to its highs and only 50 points down. And that is why I see today as bullish. So, we are back to watching the 50 day MA tomorrow.

Personally speaking, I didn't get much time to see the markets today, which is good considering the way I have been trading this week. In the first few seconds of the day, I sold 1/3rd of my PMI position at 2.71 for a small loss. I was not comfortable with the size of the rest of my position and could give it room to run. And that's what happened as it did recover to close well. I added to my WFMI position later in the day which acted well throughout the day. I like how this stock is acting. It is at important levels but I would like to see some more volume come in tomorrow.

Another stock I like here is RDN. A break of yesterday's highs and it has no real resistance till 12.

I have a feeling that tomorrow is going to be an important day when we make a definitive move.

Take care and Good Luck!!

Wednesday, February 24, 2010

Confessions of a frustrated trader

I am going to keep the daily review short today as I would rather go talk more about my personal experiences in the market today. The S&P is close to MA(50), so tomorrow has the potential to be a crucial day. A good job number should probably do the trick. 1108.91 - that is your magic number for tomorrow.

Now on to my day. I will try and write my thoughts in the order that things transpired.

NEP - Well, I knew it was gonna sink today. They came out with a statement in after hours yesterday saying the SEC was forcing them to make changes to their financial statements of the last two years. I am sure all you readers know what news like this can do to a stock. So, I entered today prepared to see a brutal sell-off in this position.

AMR- Started the morning nicely. I had a sell target of 8.99, right below the resistance level of 9. Looked solid in the premarket and I was pretty confident it would have a shot at 9. It had a high of 8.97 and I got stopped out at 8.79 for a very little profit. It turned immediately from there and spend the rest of the day in 8.80s.

Seeing it turn made me a little frustrated. Normally, I am quite OK with something like this but I guess the 10% losses in NEP position as soon as the day started were affecting me a little.

I sensed the markets were going to turn and going further up at this point in time. So, I took a fairly large position in WFMI, a chart I pointed out yesterday. I still really like this play but while the rest of the market kept on going higher, as I had thought, this stock decided to consolidate. Nothing wrong with a stock doing that after a decent run up! But the fact that all other stocks on my screen kept were doing much better just added to my frustrations.

CSE - Another overnight position. I got out of it at 5.30. And what happened right afterwards? Yes, you guessed it right dear readers. It immediately turned and went to 5.38. More frustrated....

So, as you readers might have gathered by now, I wasn't exactly in my happy place at this point in time. If I were calm and composed at this time, I would have just accepted that today just wasn't my  day at the markets and called it quits for the day. Like I normally do.

But no, my mental condition at that time meant that I did just the opposite! I took a large short position in MTG at 5.62. It went down initially and then turned. I got stepped out at 5.66. And you know what happened next!! Well, the only saving grace from this stupid play was that I at least got away with only a small loss.

I took a position in PMI in the last 5 seconds of the day to complete my well, frustrating day.

Now, that I am calm and composed and I sit here writing my thoughts, I realize I didn't do too bad initially. Here is my rationale for saying this:

NEP - It started too low for me to do anything with it. I didn't want to sell it along with the panic sellers. As it transpired, it closed in 8.60s and did better than I had expected.

AMR - No way was I going to see a position I had decent profit in turn into a losing position! So, my stop was placed at 8.79, so I could get out with a small profit. Faced with the same circumstances, I would make the same decision all over again.

CSE - I sold it as it reports tomorrow and I saw it had trouble breaking 5.35. No was I was going to hold a financial stock going into earnings.

So, you see all my early decisions were actually well-rationalized. But at that time, by allowing myself to get frustrated, I wasn't thinking in this manner. All I was thinking about was the P/L of my account and the missed opportunities. The next time something like this  happens, I hope I will have the sense to just walk away. Actually, that's what I usually do. 

Trading is weird that way. In life, ever since we are kids, we are told not to give up and fight harder in times of adversity. But in trading, its best to admit defeat, bow to the market Gods and simply walk away. After all, tomorrow is always another day....a day full of exciting, endless opportunities.

Tuesday, February 23, 2010

Some stocks for the watchlist

GMCR - A buy at the important support level. Be patient!

RDN - Very weak close. A break of today's low and chances are it fills the gap.

LCC - Still hanging in there even the last couple of down days. Love the volume pattern.

UUP - What happened to the volume? Negative MACD divergence building.

WFMI - 52 week highs. Great bullish flag got played out! What's not to like?? Chart of the day!

Take care and good luck tomorrow!

Still leaning bullish

I guess the title says it on. The S&P got rejected right at the 50 day MA. But no need to panic, at least not yet. As I had been saying since the end of last week, the  markets were clearly overbought and a pullback was certainly overdue. Though we are not overbought according to the Mcclellan Oscillator anymore, we are still at pretty high levels and need another day like today to reach neutral levels. GS behaved surprisingly well on a 100 point down day, down only 0.1%. This combined with the strength the market showed in face of negative news last week has me leaning bullish. Till when will I continue leaning bullish? Till 1080 holds.

I didn't trade much today as I got pretty much no time at all to follow the markets today. One of those days at work! I knew I wouldn't be able to see the markets till noon, so I placed a sell limit order for AMR at 8.99. It wasn't behaving well in the pre-market and I wasn't comfortable being so much long overall. I took a ~1% loss on this one. When I got a chance to see the markets again, it was 8.84. A quick look at the charts made me think the bottom was going to be around 8.76, so I placed a buy limit at that point and left. As I see now, the bottom was indeed 8.76 and my order did get filled. So, at the end of the day, I am still long AMR, CSE, NEP.

Talking about NEP, they came out with horrible news afterhours. Basically, they have been forced to make changes to their last few years financial statements by the SEC. I have held this stock for over two years in my buy and hold account as I have had complete faith in the stock, even when it dropped to 1.50s. Basically, I feel kinda let down and maybe even betrayed by the management. I don't know if I will ever buy a stock for long term ever again. But more on that another day. It has already fallen a lot after hours, as expected with news like that. Tomorrow is certainly going to be interesting, to say the least. But I am surprised how calm I am at prospect of facing a big loss. That's the thing about trading.....It teaches you a lot about yourself as a person.

That's it from me for now. Wish me luck for tomorrow!

Monday, February 22, 2010

A bullish day indeed

Not much to say today. It was a slow choppy day and there was one clear winner in the end - bulls. I had written in my review yesterday that I was leaning bullish and was expecting the markets to get rid of the overbought conditions in a choppy manner. And that's exactly what happened today. Another couple of days like this and we are good to go higher. I must add here that the financials acted extremely well today and look good to lead the market forward.

Personally speaking, I had my worst day of the month. No, it wasn't the money. It was the stupidity. I got out of my overnight LCC position at 7.20, early in the trading hours, for a gain of ~6.5%. It turns out that was the best decision I made the entire day. Seeing the airline sector holding on well, I entered AMR at 9.09. Seeing the strength in the financial sector, also took a position in CES at 5.50. AMR closed just above 9 and CES at 5.44. So, no regrets here. But late in the day, I took a very large position in MTG at 7.60 and got stopped out at 7.55. If you are thinking that's hardly a loss (less than 1%), you are right though it was a little larger than it seems due to the large position I took. But it's not about the money. Its about the reason I entered the trade.

I entered the trade because I was bored and a little frustrated by the action of the markets. So, I decided to go for a quick scalp. That's why the large position. I know these plays usually don't work for me , primarily because I give them pretty much no room to run, but still I entered it. Stupid! Stupid! Stupid!

If you can't tell, I am pretty pissed with myself :). So, am just going to wrap it up here tonight. Most of the stocks in the watchlist I posted yesterday did rather well today and are still in play, so I won't be posting a new watchlist tonight.

Take care and good luck tomorrow!

Sunday, February 21, 2010

Some charts for next week

For what to expect and my suggestions on how to play next week, please see here.

LCC - Bullish volume pattern. Watch out for a break of 7. At 52 week highs, so room to run.

MTG - Long term resistance of 7.50 just ahead. A buy above that. Bullish volume pattern.

SAPE - Breakout on high volume on Friday. Not too thrilled about the close though. A buy only if it manages to hold 9.

CSE - Nice breakout on high volume. Coming off a double bottom.

LPX - Volume starting to come in. Look out for a potential breakout if it manages to cross 8.

CLF - Watch out for a break of 55. Nice volume the last couple of days.

BEBE - Consolidating pretty well after a breakout. A clean break of 8.50 and we are back in business.

I see Palladium futures have made a great start to the week. And so has gold. It might be worth your time to keep an eye on SWC tomorrow. Volume has been relatively low recently, so look out for signs of volume coming in. Could run after 12. Keep an eye on PAL too, another Palladium play.

That's it from me for now. If I find any more set ups I like, I will put them up on twitter. If you are not following me already, you can do so over here.

Take care and good luck tomorrow!

An interesting week lies ahead in front of us

It's Sunday afternoon and I hope you readers have been enjoying the weekend so far. It's time to analyze where the market stands as of now and try and figure out what to expect in the coming week. From what I am seeing, it looks like we have in front of us for a very interesting and crucial week for the markets. Why, you might ask. Well, have a look for yourselves....

The S&P index closed right at the MA(50). In spite of the rate hike late Thursday, the markets had a positive day on Friday. Now, anytime you can close in the green in spite of negative news such as this, that's bullish indeed. Volume has been missing throughout this two-week old rally. Is that a cause for concern? Not really. Remember, most of the late 2009 rally took place on low volume. Support for the bulls is at 1085 and 1100 and as long as we dont fall below 1085, it's bulls all the way. But I do expect the bears to fight for MA(50). The Nasdaq chart looks very similar, so I am just putting it up here without any separate commentary.

A word of caution here. The markets are overbought here and have been so for the last couple of days. So, be careful while taking large long positions or in holding too many ovenight long positions. Personally speaking, heading into tomorrow, I am around 40% long and 60% in cash and I like it that way.

What would I like to see here? Like I said before, the markets are overbought right now. This situation can change in two ways - a  sharp pullback or sideways movement. While sideways, choppy markets are no fun for trading, that is what I expect to see next week unless some unexpected news comes out. In fact, a little rest or pullback on low volume is good news for the bulls.

I will be back later tonight with some charts for the watchlist. To wrap it up, don't let your perception of the market come in the way of making most of the opportunities that come your way. Trade what you see, not what you think.

Take care and good luck next week!

Saturday, February 20, 2010

Feb 16 - Feb 19 completed trades

4 profits, 1 loss - +18.24%
Average Profit - +4.95%
Average Loss - -1.56%

Total account up 9.91% YTD (after commissions)

Open Positions: NEP, LCC

I didn't trade much this holiday-shortened week but the Stock Gods were still magnanimous enough to bestow me with large gains in what frankly speaking, was a difficult week to trade. More than the gains, I am pleased with the patience I have shown in the last two weeks in waiting for the right setups to appear. Hopefully, I will be able to continue this good run which started two weeks ago. I will be back tomorrow with my thoughts on where we go from here and also some charts for your watchlist.

Take care and enjoy the weekend!


1) The table shows only completed trades of the week. The positions that are still open will be accounted for in the week that I close them.
2) The YTD calculation includes the open positions. I just take my account value at end of Friday and calculate it. So, it also includes commissions which do matter a lot to a small account like mine.

Which other blog reports results after commissions? :)

Friday, February 19, 2010

Trade what you see, not what you think

As short term traders, it is important that we trade what the market gives us, rather than what we expect the markets to give us. The bottom line is that no matter what we think, the market is always right. This philosophy becomes especially important in these choppy markets, where frankly speaking, most of us have very little clue on what the market is going to do next. As I am sure you readers know, the last couple of weeks or so have been especially hard for trading. Most traders had been expecting markets to touch MA(200) and here we are, overbought for at least the last two days, and trying to regain MA(50). To give my own example, as you regular readers know from the daily reviews, I have been leaning bearish for the past couple of weeks, but as of now, I am up over 30% on the trades made during this time period. And here is the punchline - all by going long.

The point is as retail investors, who are we to fight the markets. What influence do we have on the markets? Zero. Nada. Zilch. Yet, many of us think that something is wrong when the markets are not doing what we expect them to do. Like I said before, the market is always right. You might be the greatest chart reader in the world but if you are a prisoner of your opinions and refuse to bow to the markets, either you will end up blowing up your trading account or sitting on the sidelines watching other lesser traders make money. How did that happen? The others perhaps traded what the markets gave them. They kept an open mind. Chart reading is highly subjective. For the large majority of the charts, a person who is long a stock can paint you a bullish picture and a person who is short the same stock can paint you a bearish picture, all by looking at the same chart with the same indicators. That is why it is so important that you have the stop loss point firmly decided before you enter a position - the time when you are going to be most objective while reading a chart. Once we enter a position, the emotions involved with holding a stock, namely fear and greed, begin to play their parts in us interpreting the charts.
Don't get me wrong. I am not bashing chart reading or technical analysis. No way! Just the opposite in fact. The same charts and chart reading skills that had me leaning bearish the last couple of weeks made me go long the individual stocks and make decent profits in the last two weeks. It is just that my overall opinion of the markets was just a basic guideline for me whereas, as a short term trader, what was more important and took precedence was the individual chart setups and how the market was behaving the instant I took position in a stock. Both view points helped me make money. The short term view point - individual chart setups - made me decide when to enter a stock and the fact that I should go long. The larger view point - overall market opinion - made me take my profits early and take smaller positions which prevented me from getting stopped out of trades during these choppy markets, a very distinct posibility.

That's pretty much what I want to say here - Don't trade with blinkers on. Don't become a victim of your own viewpoints. Trade what the markets give you. It is nice, actually important, to always keep the bigger picture in mind but don't let that get in the way of taking and making  the most of the opportunities that the markets are offering you.

Take care and good luck trading!

Thursday, February 18, 2010

Thoughts on tomorrow

When the trading day ended, I had a usual daily report planned with charts, support level, resistance levels etc. But the Fed decision after hours to increase the discount rates makes any such post an exercise in futility. Add to it the fact that I am not feeling well at all means that this will be a really short post and I do apologize for the same dear readers. I was thinking of not doing a post at all this evening but the fact that the daily reviews have become a daily feature of this blog made me feel that I should just share my thoughts briefly with you regular readers. So, here is what I am thinking right now.....

  1. The markets are now way overbought here. Now, that doesn't mean we can't go higher but just that the odds were in favor of a pullback anyway even before the Fed decision.
  2. I kinda like the way the futures are acting. I expected them to have fallen a decent bit more.
  3. Gold, obviously, shot down after the Fed decision but rebounded off 1100. I am interested in seeing if this 1100 level holds tonight. Both (2) and (3) might change before the market opens  tomorrow, so keep an eye on them.
  4. The next points are my strategy for tomorrow. I expect the markets to overreact in the first few minutes after the open. Keep an eye out on the level from which the first bounce occurs to see if its an important support point.
  5. I will not trade gold stocks or any other commodity plays tomorrow as I expect them to be too volatile.
  6. Don't try and be a hero and try calling a bottom every time the market bounces a little.
  7. The markets are already overbought and now the Fed news. So, ask yourself this - how comfortable would you be heading into the weekend with overnight long positions? A lot of the traders would ask themselves the same question in the last half an hour, so it doesn't hurt to try and think two steps ahead.
  8. Am going to try and be really patient here and try and avoid any momentum stocks unless they are strictly for a daytrade. I am in around 75% cash heading into tomorrow and in no mood to give back to the markets any of my ~10% profits (YTD ) that the Market Gods have so kindly bestowed upon me.
Take care and good luck tomorrow. And remember, sometime not making any move is the best trading move you can make. After all, that was what got me my confidence back two weeks ago when I was in my worst trading slump in over a year.

Wednesday, February 17, 2010

Are the markets overbought?

Well dear readers, it was a pretty slow and boring day at the markets least from where I was looking. Personally speaking, this was a little disappointing as after what feels like many days, I actually had a lot of time to follow the markets today. The S&P index closed at 1099 odd, slightly below the 1100 resistance level I had pointed out in the post yesterday. As nothing much has changed as far as the chart has concerned, I won't be posting the SPX chart today but instead try and figure out if the markets are actually overbought here. My general thoughts on the market haven't changed since yesterday and I still believe that the bulls don't have control until we cross MA(50).

Let's see if the markets are overbought now. First, the NYSE McClellan Oscillator. I have marked what I feel is the overbought zone by the dashed lines. As you can see, we have just entered the overbought zone. We certainly room to go a little higher from here, but the odds are in favor of a pullback here. I would recommend lightening up your longs here and being very careful in starting new overnight long positions.

The Nasdaq McClellan Oscillator is even "more overbought" here compared to NYSE McClellan Oscillator. Like I stated earlier, I think a pullback is imminent in the short term.

Personally speaking, I got out of MTG position early in the day for around 1.5% gain. I later also sold my LCC position at 6.90, a gain of 6%. I later entered NOA at 9.60. It seemed to be consolidating well around 9.60, but a sudden downward spike saw me getting stopped out at 6.45. My stop loss was actually set at 9.49, but I got a bad fill. It turned after that to close at 9.59. No regrets though. That's just the way it goes sometimes. It was a good trade and a loss doesn't change that.

So going into tomorrow, I just have my NEP position open now and am in over 75% cash. I must admit I like being mostly in cash at this point.

That's it from me for today. The bottom line is I do expect a pullback in the short term. How severe that pullback will be, we will come to know by its initial volume.

Take care and good luck tomorrow!

Tuesday, February 16, 2010

Some interesting plays

Well dear readers, as you know, I posted an extensive watchlist yesterday. So, I thought I would just see how those stocks performed today and point out the plays I still really like out of those. I wont be posting these charts again because (a) I just posted them yesterday (b) I am amazingly tired! For a look at the important S&P levels and where I see this market going, please see this post from earlier today.

Though all the stocks in the watchlist performed well today, here are my top picks:

AMR - up 3.9%
CVVT - up 6.23%
FLIR (short play) - up 0.08% Doji formed today. Could get interesting tomorrow.
NOA - up 7.03%
LF - up 8.09%

So, from the above you can see what I meant when I said in the last post that I am kinda disappointed I didn't get a chance to follow the markets earlier in the day today. NOA and LF had very clear buy points which I had pointed out in the post yesterday, so I missed out some nice potential profits there. Hopefully, you readers were able to take advantage of these picks!

Couple of picks I would like to add to this watchlist. As you regular readers know, I took a position in RDN Friday late afternoon and exited it at 7.84 in the first few minutes of the trading day today. I got out of it as I was afraid it would fall heavily today as a stock in the same sector - PMI - reported pretty poor numbers in the pre-market today. Plus I had over 10% gains in the stock and was glad to take my money off the table anyway. The stock, rather to my surprise, held up rather well and so did MTG, another stock in the same sector. I took a position in MTG later in the day.

MTG - At crucial levels here. Could run if it crosses 7. Volume seems to be showing signs of coming to life.

RDN - The close above 8 was pretty important. Nice volume in the last couple of days.

That's it from me for today! Take care and good luck!

Are the bulls back in charge?

Well readers, we had a big up day in the markets today and it seems like the bulls are back in charge. Let's have a look at the S&P chart to make sure.

We went right through the 1085 resistance level today, now marked as support. Well, the bears certainly lost control yet. Coming first is the resistance at 1100 followed by the big one - MA(50) at 11.08. Until the MA(50) is overcome by the bulls, I would still put the bears in charge. What is the one thing that is conspicuous by its absence ever since the present rally started last week? Yes, you guessed it right - Volume! So, I would recommend keeping an eye on the volume. It would be tough to overcome MA(50) on this weak volume. Also, the markets are not overbought as of now but another day like today, and they probably would be. I will keep an eye out for that and update you readers if or when it happens.

Personally speaking, apart from the first five minutes after the market open, I didn't get a chance to see the markets until noon. And it was pretty frustrating when I finally did see the markets! Why?? Well, most of the stocks in the extensive watchlist I posted yesterday, which can be seen here, were up 5-6% by noon. Making use of my newly acquired patience skills, I decided against chasing any of these stocks here. I am yet to have a look at how these stocks closed and will come be back with an updated watchlist sometime later tonight. 

I did make some trades though. I got out of my RDN position at 7.84 in the first five minutes of the day, for a profit of 10.4%. Not bad for a position I opened late on Friday. I was afraid it would fall heavily today as a stock in the same industry, PMI, reported horrible numbers in the premarket. RDN did go down till 7.50 in the pre-market, so I was glad to sell it at 7.84 early in the day. It turns out it held up rather well and closed at north of 8. No regrets though. I made the best decision I could have with the information I had at that time.

I also started a position in MTG at 6.70, and later doubled the position at 6.86. It seems to be close to a breakout here and I will post its chart in the update later tonight. I am also still long NEP and LCC.

Hope all you readers had a profitable day today and were able to make money off the watchlist. See you folks later tonight!

Monday, February 15, 2010

Some stocks for this week

Monday Update: More charts added below

Let's start with some airline stocks. This sector looks rather good to me here and, as all you regular readers know, treated me rather well last week.

AMR - Finally broke 8.50 on Friday. Nice volume pattern. I entered this at 8.56 on Friday but got stopped out at 8.49, only to see it then run up without me. But not to despair considerate readers as....

LCC - then I entered LCC at 6.50 and am still holding it. Love the volume pattern on this one! At new 52-week highs, so no resistance up ahead. This stock treated me rather well the last week. For a complete list of last week's trades and results, please click here.

UAUA - Started the day weak on Friday as it got downgraded. But it tested 15 and then marched straight ahead to new highs. A very encouraging sign if a stock behaves likes this on bad news. 

CAL - Nice bounce on decent volume off MA(50). In a nutshell, the entire airline sector looks good to fly! Sorry, couldn't resist saying that.

CAKE - Watch out for it breaking important resistance here. The volume pattern looks really good.

CMG - Nice breakout on heavy volume from the trading range.  Has room to run. Stop Loss below 100 should do the trick.

CVVT - Heading towards an important trendline. One of the very few charts with a bullish volume pattern for this entire year.

FLIR - Landed right on MA(200). Could work either as a long or a short depending on if the MA(200) holds.

NOA - Looking really good here. Watch out for a break of 9.25 with volume.

LF - Really like how it held support right at the gap and then closed at the upper end of the trading range. A buy above 4.80

PRAA - Broke out of its trading range on very high volume. A buy at new highs, or around 50.50 in case of a pullback, with a stop just below 50 should do the trick.

RE - A short. Weak pullback stopped right at MA(200).

RIMM - At an important level here. Right at the gap resistance, so could go either way.

Take care and good luck tomorrow!