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My bad for not blogging lately, as my shrink I’m certain feels it keeps me sane, however I began working on a new venture called StockBuz and well…………..it’s taking up all of my time. I continue to like the financials, energy, materials, tech and anything in XLI here. NE is also setting up for a breakout if it trades above 45.20 with increased volume. My only risk aversion play at this juncture is long GILD. I believe the time to buy risk aversion will come in a few months. Until then, don’t forget me and check back her periodically for information on StockBuz. A community of stock traders in LIVE chatrooms.
A quick link from Ashraf Laidi outlining what he feels is going on with the USD and crude pricing. Also touches on interest rates and the ADP report tomorrow. Good stuff. (CLICK HERE) 8min.
I could so get long Gilead Sciences [GILD] here as its been forming a huge symmetrical triangle since 2008 and while not broken out yet, I like an entry here @ $43.30 with a stop below $42.50 [risking less than a buck]. This would be more of a safe haven play for 2010 and could run the entire year, but for a $20/share return while risking $1, I think I can handle the timeframe.
A possible play for 2010 with mounting worries of terrorism since the Christmas bombing attempt could be Emergent Biosolutions [EBS]. This anthrax vaccine manufacturer has long been forming a long symmetrical triangle [a continuation pattern]. While the pattern itself has not broken, it has been under distribution since September and MACD is now showing positive divergence; a good sign. Today it appeared to be breaking out of this down channel but I didn’t take the bait because volume was a little on the low side. Being the first trading day of the year, a breakout is still possible but personally I’d like to see it come back and re-test that breakout area before jumping in. Yes, it could bounce off of triangle resistance but I’d be prepared for that.
If todays breakout does not hold, I’d expect it to come back to $11.80-$12 and that would pose a good entry point at a swing with a stop below triangle support. Just an idea going into 2010…………
You can find a trade in the darndest places, like a high Put/Call ratio in PETM. With a put/call of 20.8 on Thursday, I had to see why. No earnings. No bad news; its more technical than that. Not only does the MACD Histogram have negative divergence [smaller with each attempt as price went higher] but its formed a fat rising wedge and if you look closely at the Bollinger Bands, they became smaller with each expansion. All signs of impending failure. Given the thin holiday trading, anything is possible but I like the risk here to short at the open or premarket risking only .50 cents with a target of $24 for over 10% gain
KSU lead the pack with a breakout last week but here are four more either just broke out or near one. Based on pattern size I’m not expecting much but have been proven wrong before. At the very least, they’ll hopefully suffice for a Santa Claus rally trade.
[Footnote] Throw a Bollinger Band on CSX [right] and take a look at the top band………..
In an earlier post I highlighed Delta Airlines [DAL] for a swing trade with airlines benefiting from lower crude oil pricing. Delta seems to be leading the pack however here are a few others for your consideration with their 50d now trading above the 200d; a better sign of 
health imho. When in doubt, check the airline index XAL [left] which would indicate to buy the next pullback. Pundits also believe this is one of the areas we’ll see M&A activity going forward so adding one to your portfolio with lower crude prices wouldn’t be a bad decision.
Now I realize I just posted that above stating lower crude prices but there’s something just plain sexy about XOM and how broke out, formed a rising wedge, dropped, achieved its target from the wedge and is now sitting at its prior breakout point – testing that support. Kizmet. Its price target was just lowered to $79 and where is it now? $68. Hmmmmmmmm One week left in the year, right?
Just a quick note that although I had posted long ideas in airlines recently, you may wish to take some off the table or exit the positions altogether with the terrorist news on Christmas Day. We’re talking tighter security restrictions and all around a not fun time flying going forward. If going short, look for setups and keep stop losses in place. Be careful-
With the market closing early tomorrow, I thought I’d throw out a few last minute trade ideas and wish you and yours a very, merry holiday season :)
Standard Pacific [SPF] broke out of its triangle and more importantly, broke above August trendline resistance. This is an easy run to $4 for over 10% profit but then leave 1k or more on the table. Breaking that trendline may mean its got more legs on it than we know.
China game PWRD has been correcting and is not forming a falling wedge; a bullish reversal pattern. You could take the trade here if you like as I believe this is a strong support area or wait until the stock breaks above the falling wedge and jump in at that point. Definitely the safer play.
Gold itself via GC_F is forming a bullish falling wedge on the 60min chart. When demand overtakes selling pressures, you could buy on the breakout. I can almost guarantee that this will come back and backtest its breakout support area and then I’d recommend adding to your position on that pullback.
With the Nasdaq the clear leader of the index pack, here’s another tech play in LWSN which broke out of a falling wedge. A couple thousand shares of this with a stop below todays LoD [low of day] and you’ve got a price target of $7.75ish for over a 20% gain in the next two weeks or so. Ka’ching
If you have the ability to trade futures, here’s a swing trade in Soybean Oil futures ZL_F. It broke out of its triangle and has now backtested that support; which held. Great entry point now with a stop below that support for a 2-4 week swing trade with an ultimate target of $44-45 Just be certain to exit your position before the contract expires……or be prepared to cough up some soybeans *lol*
Lastly a biotech play with BIIB which broke out of a huge trading range. Stop at about $50 with targets between $55-61 over the next 3-6 weeks.
For the bulls out there: Healthcare in focus this week makes this healthcare REIT [OHI] very interesting. Its forming an ascending triangle, very common to cup w/handle formations. Note the increase in volume during the last rise [a sign of accumulation] as well as Fridays double volume spike. Set an alert for $19-19.10 and watch for volume. Triangle target is $20.90ish and cup w/handle target is near $23.50. Stop below $18.50
VMW caught my eye as its been trading along its 21k EMA since July which is exactly where it was held last week amid a shaky Nasdaq market. One could buy here with a stop below Fridays low or wait for a breakout of the triangle. Whatever floats your boat. Triangle breakout could run as much as $7-8 higher from the b/o point over 2-3 weeks.
I love it when a company reports earnings and the stock sells off. Wait a few weeks and you see volume increase and a trendline break. Then you buy. Northern Trust [NTRS] broke its trendline Friday which makes for a good entry with a stop below Fridays low. Target of $54-55 near gap resistance.
