Saturday, July 28, 2007

Weekly Trading Calls -- July 30-Aug.3

On the market:

The market ignored some very positive Q2 reports and obsessed with the credit-crunch woes last week and suffered a mini-meltdown. The huge losses across the board have significantly damaged the fundamental technicals underlying the multi-month uptrend. The extent and speed of the decline, especially the failed stabilization/rebound attempt on last Friday, clearly suggest that the jittery and crisis may lie deeper than most people expected. On the other hand, it is still premature to say that the uptrend is now convincingly reversed. As all major indices now oversold and sit just above their key support levels, I fully expect a technical rebound next week with a likely retest of their MA50 levels:

NASDAQ: strong support around 2530. Key resistance: EMA50=2618, around 2630
SP500: strong support around 1450. Key resistance: EMA50=1514, also around 1490.
DOW: strong support around 12845. Key resistance: EMA50=13529, also around 13700.

The overall trading strategy for August should be: short on top when the major indices and stocks rebound back to the key resistance levels. For very short-time frame trading, long at the bottoms as long as the indices stay above the aforementioned key support levels. However, for any long trades, be careful with the position sizes and be ready to take quick profits.

The bottom line: for the first time in months, there are solid signals pointing to a start of a bearish reversal of the uptrend. As always the case during the early stage of a trend reversal, one should start to establish short swing positions, but do so with patience and fully expecting of some dramatic rebounds.

L1: strong buy, untrend plays, may hold. L2: rebound-buy, only for a quick profit.

1. AEO: speculative L2, entry around 24 or as low as possible, IT=27, make sure you have a risk/reward ratio of 1:6 or better.

2. AMD: L2 on bottom, entry zone=13-13.71, stop just below 13, IT=15.5

3. ANN: L2 on bottom, entry zone=32.25-33, IT=34, stop just below 32, make sure you have a risk/reward ratio of 1:6 or better.

4. BIDU: L1, entry zone 200-204, stop just below 200, IT=215.

5. BRCM: L1, entry zone=32-32.3, stop just below 32, IT=34.5

6. COH: report Q2 on July 31, consider long near 42 if it spikes down initially, IT=48.5.

7. COST: L1, entry zone=57.25-58.5, stop just below 57, IT=61.

8. CTRP: L1, entry zone=72-74, IT=82

9. DVN: S1 on top if it spikes towards 78, stop just above 78.5, IT=71

10. FNM: S1 on top if it spikes towards 63, stop just above, IT=55.

11. HD: L2, entry zone 35.3-36.4, stop just below 35, IT=39.

12. ILMN: L1, entry zone=42.5-45, stop just below 42.

13. LRCX: L1, entry zone 55-56.1, stop just below 55, IT=60

14. MRVL: L1 if it spikes towards 18, stop just below 18, IT=20.

15. RACK: L1, entry zone=11.25-12, closing stop<11.25, intra-day stop just below 11, IT=14.

16. SBUX: L1, entry zone=25-25.61, stop just below 25.75, IT=28.5

17. SINA: L1, entry zone40-41.1, stop just below 40, IT=46. (Q2 on Aug. 7)

18. SNDA: speculative L2 if it spikes towards 27 with a stop just below, IT=30.

19. STP: L1 if it spikes towards 37, stop just below 36.5, IT=42.

20. X: S1 on top if it rebounds to EMA50 around 109, stop just above 110, IT=92

Saturday, July 21, 2007

Swing calls -- July 22, 2007

On the market:

Last week turned out to be one of the most dramatic week in recent months, after notching new highs, all major indices registered a losing week. The overall reactions to the first week of peak Q2 reports are mildly negative. Earning reports will continue to pour in next week, feathering key companies in the oil sector, housing sector and tech titans such as TXN and AAPL. If market continues to react negatively, the major indices may be set to test key supports such as MA50. However, until the major indices broke their MA50, the trend is still up. One sector that demands particular attention is the banking sector, whose index just produced a death cross (see Trade Mike's chart and comments). All companies in this sector are now perfect short-on-top candidates. If the financial heavy weights continue their rapid descend, the possibility of new market highs will be significantly diminished.

1. AAPL: will report Q2 in Wed AH, also, Tuesday's AT&T Q2 report may also reveal iPhone sale situation and therefore impact AAPL price. Keep eye on key supports around 115, EMA50=122.7 and 127.5 if it drops following the report. Look at GOOG for possible AH play on the long side.

2. BIDU: S2 on top only if it spikes towards key resistance near 200 and 210 use very tight stop, don't go long unless it spikes towards EMA50 currently near 163.5.

3. BRCM: L1 on bottom whenever it spikes towards EMA10.

4. COST: L1 on bottom if it spikes towards EMA50 currently around 58.3.

5. ELN: L1 on bottom if it spikes towards 19.4, stop just below 18.9, IT=22.

6. HD: L1 on bottom if it spikes towards 38, stop just below 37.8, IT=40.5

7. ILMN: will report Q2 on Wed. Keep eye on key supports around 35.5,37, EMA50=38.4, and prepare to trade from the long side if it drops quick in AH, however, if it breaks solidly above 42.3, consider buying the break-out!

8. LRCX: L1 if it drops to 55-56 due to market correction, stop just below 55.

9. MRVL: L1 if it spikes down towards 18/18.5, with CS<18.5, IDS around 17.8, IT=21.

10. PFCB: currently long at 35.21, will report earning around Wed noon. Consider exit half position if it spikes towards 36 on Monday and close all position if it spikes towards 37. intra-day stop just below 34.7 and closing stop just below 35.15.

11. RACK: reports on Thursday AH, long if it breaks 14.2, and watch for key support around 11.2.

12. SBUX: L1 if it spikes towards 26.8, IDS just below 25.8 and CS just below 25.5.

13. X: reports Q2 on Tuesday, it is poised to break down based on the chart, S1 if it spikes towards 116 with a tight stop?

14. AMZN: will report on Tues AH. watch for key supports around 60, 63.7, and 67.5 (EMA50). Long at 60 or 63.7 may be considered if it spikes down in the first few minutes following the report,but tight stop, small position size and quick profit-booking are needed.

15. DHI: will report on Thursday, it is approaching a historic support around 18.5. It made new 1-yr low last week, I suspect that the Q2 report will turn it around.

The following banking/brokers are poised to fall further, however, they are all not far away from key support levels (often strong long term supports), therefore, for swing trading, the best is to wait for them to bounce back towards EMA50, which will offer setups with good risk/reward ratios. On the other hand, they can be day-traded from the short side based on 10 day 30 min charts.

1. BAC: S2, entry zone=49.1-50.25, stop just above 51, IT around 47.

2. BSC: S1, entry zone=139-145.2 (EMA50), stop just above 146, IT around 127.

3. GS: S2 if it spikes towards it EMA50 (currently 220.6) stop just above 221, IT around 198.

4. LEH: S2 if it spikes towards its EMA50 (currently at 74.4) with a stop just above 75.

6. MER: S2, entry zone=83.8(EMA10)-86.9(EMA50), stop just above 87, IT=78.

7. MS: S2 if it spikes towards 70 or 73.5 use tight stops, IT around 65.

Saturday, July 14, 2007

Swing trade calls -- July 15, 2007

On the market:

The persistent advance of NASDAQ finally drove both DOW and SP500 to the new highs last week. On any charts from any angles, the break-out is solid, though could be more convincing had the overall volumes been higher. Speak of the volumes, I have a gut feeling that the short-covering played a significant part in the dramatic bull run on last Thursday and follow-through on Friday. The relatively light volumes tell me:

1. Big boys are not adding to their long positions at this level, nor taking profits right now. They are probably waiting until they see a clear signal of Q2 report/Q3 outlook.

2. The shorts are yet to capitulate, which means that the market may have more room to run up.

All major indices and a lot of stocks are in extremely overbought region, which means swing-long at the current levels may not be very profitable. Buy-the-dip remains the best strategy.

The coming week is likely to set the tone for the earning season, if the market reacts very positively, I think there will be at least another 3-6 weeks of bull run (into mid or late August). Technically speaking, it is hard to conceive that the overall trend would reverse even if the Q reports from many key companies come in lower than expected.

Short plays should be avoided as a general rule.

1. AMD: L2, entry zone=14.81-15.2, stop just below 14.4, IT=16.

2. ANF: S1 if it spikes towards 79, stop just above 79.5, IT=71.

3. BBY: L2, entry zone=45-46.7, IT=50, clear bullish divergence on the weekly chart.

4. BIDU: L1 if it spikes towards 195 or 200 use very tight stops.

5. BRCM: L1 if it spikes towards 31.1, stop just below 31, IT=33.5.

6. GOOG: Consider L1 around 515 if it pulls back on earning in AH, stop below 500.

7. LRCX: watch for the 55 resistance, a close above 55 with volume could drive it to a new high.

8. MRVL: L1, entry zone 17.75-18.1, stop just below 17.7, IT around 19.5

9. NUE: S1 if it spikes towards 67 with a stop just above it, IT=60.

10. RIMM: L1 if it spikes towards 217, stop just below 215.

11. SHLD: S1 if it spikes towards 162, stop just above 162.5, IT=153.

12. SONS: S1, entry zone8.4-8.68, stop just above 8.7, IT=8

13. URBN: S1 if it spikes towards 23, CS>23, IT=20?

14. DRIV: S1 if it spikes towards 50, stop just above, IT around 46.

Sunday, July 08, 2007

Swing trade calls -- July 8, 2007

On the market:

The NASDAQ had a low volume break-out week while both SP500 and DOW are approach their early June high for the 3rd time. Bears would be in a new round of despair if SP and DOW join NASDAQ to break to the new high in the coming days, and that may be determined by the early tone of the Q2 report season. If the market reverses right now, bears may be looking at a triple top formation, however, unless the major indices do break their early-June low, bulls can continue enjoy their party.

On the overall trading strategy:

The safest is buy-the-dip, shorts may only apply to those whose Q reports greeted by negative reactions AND have subsequently been rebounding as the rising water lifting all the ships.

1. ADBE: S2 on top, entry zone=42.4-43, stop just above 43.3, IT=39.

2. ADI: speculative S3 on top if it spikes towards 40, stop just above 41.1, IT=36.5.

3. BBY: S1 on top, entry zone=49.4-50, stop just above 50, IT=47.

4. ILMN: L1 if it breaks 42, CS<42 with a bearish candle,IDS
5. LRCX: S1 if it breaks and closes below 50.6, stop around 52, IT=47.5.

6. NUE: S1 on top if it spikes towards 64 with a stop just above, IT=59/60.

7. WLT: CTT watch as it approaches 32.5.

Sunday, July 01, 2007

Swing trade calls -- July 1, 2007

On the market:

There are plenty of signals that the bulls are losing strength, however, the major indices need to break its June low before bears can claim any upper hands. I still feel that the kick-off of Q2 report season will have a decisive impact on the intermediate term trend of major indices. Until that happens, play counter-trend trading near key S/R levels will have the best RSK/RWD ratio.

1. AAPL: Monday's market reaction to its iPhone IPO weekend may signal its near-term trend, go long if it breaks 126/127.61 with a stop just below 124/125, and consider short it it breaks/closes below 119/115, with IT around 104. MA50=113.4.

2. ADBE: S1, entry zone=41-42(MA50), stop just above 42, IT=37.5.

3. BBY: S1, entry zone=47.3-47.8, stop just above 48, or 48.4-48.9(EMA200), stop just above 49., IT=45.5.

4. BOBJ: S2, entry zone=39.7-40.8, stop just above 41, TI=EMA200=37,

5. COH: S1, entry zone=48.7-50, stop just above 50, or if it breaks/closes below 46, IT=42.

6. LRCX: S1 when it breaks/closes below 50.6 with a bearish candle, stop just above 51, IT=EMA200=49.3, may consider S1 on top if it spikes towards 55, with a stop just above 55.

7. MRVL: L1, entry zone=17.2-18, stop just below 17, IT=19.5.

8. NUE: S1, entry zone=60-62, stop just above 62, IT=53.

9. SNDA: L1, entry zone=28.6-30.1, stop just below 27.5,

10. X: S3 (possibly in early trend reversal stage, patient and scaled entry), entry zone=113-117.5, stop just above 118, IT=100