The beginning of the week is likely to be tough to play the market in any direction. With the likelihood of a top having been formed and the market probably in a type of panic selling there will not be many stocks to remain unscathed. Nonetheless it is also going to be difficult to find stocks to sell as it is also probable that the market will find a bottom to this correction sometime this week and a bounce occur.

At some point in time money will flow back into the market. It will probably be in smaller stocks or those with strong charts or positive fundamentals.

I have taken great care this week in choosing mentions that have a very small risk factor and a higher degree of probability than usual. With the indexes under such pressure extra care must be taken.

INTV Purchase (Friday Close at 7.76)

INTV is a stock that seems to have strong fundamentals. It was also announced on Wednesday that the company had secured a multi-million dollar contract with a large East African wireless service provider for its award-winning Media Exchange enhanced services platform.

INTV is a stock that has been as high at 38.25 back in the year 2000 and a low of $.88 cents in the year 2002 but has generally traded over the years in a range between 7.25 and 18.00. The 7.25 area has shown itself to be a very strong pivot point as well as major support.

After INTV broke down to .88 cents in 2002 it then rallied and broke above the $7.25 level in 2003 and generated a rally all the way up to $18. After reaching that level it got back into a downtrend that took the stock below the $7.25 support and as low as 5.58 last year. After re-testing that area on several occasions and building a strong support base INTV broke above 7.25 once again in May of this year and rallied up to the 20-month MA at 9.00.

During this drop in the indexes INTV has gone back down to re-test the breakout level as well as the 50-month MA which is currently right at 7.25.

In looking at the weekly charts INTV dropped down to the 20-week MA on Friday with the print of 7.59. That same 7.57-7.59 level has been shown to be a support level several times over the past year.

If the indexes show a lot of weakness on Monday it is possible that INTV will drop as low as 7.25 (major support) but this whole area between 7.25 and 7.56 must be considered a buying opportunity. It is a tough call whether INTV will or will not drop to the major support as the weekly and daily charts show that the 7.57-7.59 is also a good support level.

Purchases of INTV at Friday's closing price of 7.76 and down to 7.25 should be made and a stop loss order placed at 7.15. Minimum objective of 9.00-9.60 should be expected. There is a very large congestion area between 9.00 and 9.60 that should hold the stock for awhile but if able to get above that level the next resistance is at 12.42, then strong at 14.59 and major at 18.00.

Risk/reward ratio depending on the entry point can vary from 3-1 to 5-1 when using the first objective. Much higher if it breaks the resistance at 9.60. My rating on the trade is an 8.5 (on a scale of 1-10 with the strongest probability rating being 10).

IMAX Purchase (Friday close at 4.82)

After a drop last August from 10.80 down to 3.32, probably due to a negative report, IMAX has been in an upward trend which was confirmed a week ago with a breakout above both the 20 and 50-week MA.

There is presently strong support at 4.42 from a major previous low as well as from the 20-week MA so drops to that level, if seen, should be strongly purchased. In addition the 4.00-4.05 level in IMAX has shown itself to be a major support level for the past 4 years.

The recent high at 5.62 cannot be considered major resistance as there have been no previous important highs at that price. The reason IMAX stopped at that price this last time around was because it was the 50-week MA at the time. Resistance will begin at 6.07 (minor) and then at 7.06-7.50 (strong), and after that major at 10.00.

The daily chart shows strong support at Friday's low of 4.77 as well as a possible flag formation that, if broken (a rally above 5.21), would give a 5.50 objective. Nonetheless the breakout above the 20 and 50 week MA's seems to suggest that IMAX may be on a strong weekly up-trend suggesting that the 7.00 level will be the target over the next few weeks.

A purchase of IMAX at 4.78 and placing a stop loss order at 4.34 and an objective of 7.00 would give a 5-1 risk/reward ratio. The stop loss at 4.34 is considered a sensitive stop loss. The chart does look very strong if that 4.40 level holds but will not look weak unless the 4.00 level breaks. Stops at 3.94 can also be considered as giving extra room to the trade.

My rating on the trade is a 7 (on a scale of 1-10 with the strongest probability rating being 10).

SNDA Short (Friday closing price 28.76)

SNDA is a wide ranging stock that has been in a bullish up-trend but seems to have lost much steam. After having reached a recent high of 33.62 and an area of great congestion on the weekly charts the stock dropped straight down last Monday, breaking both the 20 and 50 day MA's and reaching its major support at 27.75. A rally from support occurred this past week back up to test the 50-day MA at 29.70 but even though it was able to get above it on two occasions (high of 30.11) it failed to close above and confirm a false breakdown.

The recent drop from the highs has created an inverted flag formation on the daily charts that if broken (a break below 27.75) would project a drop down to the 22.00 level. There is a gap between 25.00 and 25.88 that would most definitely be an immediate objective should SNDA break support.

There are two ways to play this short position. Rallies back up to the 50-day MA at 29.70 should be sold and a stop placed above Friday's high of 30.11. Though this approach would not have as high a probability of success as shorting a break of 27.75 it would be the best scenario from a risk/reward basis. The flag formation does look bearish and selling the stock right below a strong psychological level ($30) as well as having the 50-day MA in your favor would likely make this a good trade.

The second way to short SNDA is on a break of 27.75. This does give you a strongly increased probability of success but the risk/reward ratio would be difficult to protect. Should the break of support at 27.75 occur a drop down to fill the gap at 25.00 would be highly probable. In addition a break of 27.75 would also be a break of the 20-week MA, the inverted flag formation, and the 50-week MA. A break of 27.75 would project a drop to 22.39. If going this route the stop could not be placed any lower than 28.87 on an intra-day basis or 28.00 on a stop close only basis.

In either case the risk/reward ratio is at least 5-1.

Based on the action Friday I seriously doubt that SNDA will be able to rally back up to the 30.00 level. With the indexes under heavy pressure I will be looking to sell SNDA at the best price I can get and play it close to the chest while waiting for 27.75 to break.

My rating on the trade is a 5.5 if sold above 27.75 and a 7.5 (on a scale of 1-10 with the strongest probability rating being 10) if you wait for 27.75 to break.

SIL (Purchase) (Friday closing price 16.23)

SIL is a stock that in May received major news in the form of a much higher than expected earnings report. SIL rallied from the 15.50 level all the way up to 22.35. It did reach a strong level of previous resistance at $22 and has now fallen back to re-test the breakout area and previous support level.

On Thursday SIL tested the breakout level with a drop down to 15.60. It found support at that price and closed that day at 16.59. Friday, with the indexes breaking, SIL still managed to remain above the low made on Wednesday and at no time attempted to get back down to the 15.60 level. It closed at 16.23.

SIL is a silver mining stock and therefore not likely to be as affected by the drop in the indexes as other companies might be. Even though on Thursday SIL broke below the 50-day MA it failed to close below it thus negating the break. Having tested the breakout level at 15.50 as well as holding the 50-day MA it seems that SIL is a purchase at this price.

There is almost no resistance in the chart until the 19.58 level is reached and even then this is not considered major resistance. There is some short-term resistance at 17.50 that might be bothersome while the indexes are under pressure but should not offer major resistance otherwise.

Purchases of SIL at Friday's closing price of 16.23 and placing a stop loss order at 15.40 and an objective of 19.57 would give a risk/reward ratio of 5-1. My rating on the trade is a 7 (on a scale of 1-10 with the strongest probability rating being 10).