Sunday, August 14, 2011

Stocks showing relative strength

In the spirit of being prepared for any eventuality in these news dominated markets, I ran a scan looking for stocks that have shown relative strength in the last one month. Following are setups that I like from those that showed up in the above-mentioned scan.

Here is a post on resistance levels on the S&P to keep an eye on next week. 

I will be back with more setups later in the day.

Take care and good luck!

Resistance levels

I haven't been able to update the blog for quite a while and my apologies to you readers for the same. But a change of jobs during the course of the last couple of weeks accompanied by computer troubles have meant that I haven't had much time for trading lately. I understand that I have missed out on quite a bit of excitement during this time period :-).

Before moving on to the charts, let's get one thing clear. Despite some late relief late in the week, the bears are very much in control. Also, these are still news dominated markets, so be prepared for volatility and position yourself accordingly. 
Here are the upcoming resistance levels considering various time frames. 
15 minute chart - Resistance at 1188 and 1212.

Daily chart - Resistance at 1200.

Weekly chart - Resistance at 1220.

I will be back later in the day with both long and short setups to watch out for next week.

Take care and good luck!

Monday, August 8, 2011

Blood on the street

What a day! Just when one thought that the worst was over, on came today.

Following is the weekly chart of S&P 500. In three week's time, we have given away approximately a year's gains.

And finally here is a chart of the Nasdaq McClellan Oscillator showing how oversold the markets are. Its lower than it was anytime in the past three time.

1. Am I looking to go short here?

No, the markets are way too oversold for me to be comfortable holding any short positions here.

2. Am I looking to go long here?

No, the momentum behind this down move has just been too great for me to be comfortable playing any bounces here. Chances are that it will be shortlived.

3. I am just going to stay away from the markets and try not to be a hero here.When will be the right time to step in again?

When the fear is out of the picture. These are markets ruled by fear, not by technicals or fundamentals. And when the technicals dont matter, I pretty much have no edge in trading. And trading without an edge is akin to gambling.

4. How will I know that fear is out of the picture?

When the market stops going down on bad news. In fact, when it starts going up inspite of bad news.

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