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Issue #165 
March 7, 2010 | Newsletter
The newsletter with chart analysis for stocks and stock indexes |
Stock Indexes Analysis/Evaluation
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| Pivotal Week Ahead! Upside Retest Objectives Reached!
DOW Friday closing price - 10566
The DOW continued its upward momentum in the process of retesting its previous 10730 17-month high. Most of the move up this past week was accomplished on Friday after a better than expected Unemployment report. Some of the elation about the report, though, has to be tempered as analysts were expecting more unemployment due to the winter conditions in Dec/Jan. That fact did not materialize and unemployment matched the previous month's number.
It must be mentioned that the rally on Friday was accomplished on very low volume. Low volume on a strong up day does not suggest higher prices will continue. In addition, it was expected, based on what happened in 2004, that the DOW would reach the mid 10500's level on the retest of the highs. As such, it is likely the bears simply allowed the index to rally on Friday, waiting for next week as the opportunity to attempt to push the index down.
On a weekly closing basis, resistance is strong at the 17-month high weekly close at 10618. On a daily closing basis, resistance is minor at 10584 and then again at 10664. Above that level, resistance is strong at the double top between 10711 and 10725. On a weekly closing basis, support is minor to decent at 10325/10329 and strong at 10012. On a daily closing basis, support is minor at 10380/10397 from the most recent low daily close as well as from the 50-day MA. Below that level, resistance is decent at 10282 from a previous low close as well as from the 100-day MA. Decent support at 10067 and strong support at the most recent strong daily close at 9908.
Having accomplished its upside objective for a retest of the highs, the DOW now faces a decision week where fundamental news of consequence will be limited and not even begun to be seen until Wednesday. Will the "slightly" better than expected Unemployment numbers generate enough buying to break through the highs? That is the question everyone will be asking this coming week. Nonetheless, it must be mentioned that in January 2004 Unemployment numbers peaked at 6.3%, and from that high, and the DOW trading at 10754, the index still corrected for a period of 6 months down to 9703. Can the bulls expect to pull off a miracle and rally the index with unemployment at 9.7%? I would have to say the probabilities do not favor such an event happening.
The DOW did close on Friday near the highs of the day and the week and under normal conditions it would be expected that some follow through to the upside would be seen on Monday. With the highest weekly close in the last 17 months being 10618, it certainly seems possible that a rally up to that level could be seen if the follow through occurs. Nonetheless, there have been many occasions in the past when the index closed on the highs of day and week on Friday, with the traders fearing to stay short over the weekend, and then on Monday the index came in lower and fell off from there.
It must also be mentioned that in 2004, the DOW saw the high of the first leg up of the 6-month correction on the 7th week after the top was established. This coming week is the 7th week since the January high at 10730 was established. As such, if history repeats itself, it would be expected that after an initial rally this coming week, that the index will close in the red next Friday. In 2004, the 7th week high was 79 points above the high of the 6th week. That would give a potential high of 10641 if the same thing happens this time around.
Anyway you add it up the probabilities of further upside seem to be very limited. It is very possible the index will open up lower on Monday and sell off from there. With no support of consequence until 10236/10264 is reached, if the DOW does open lower on Monday, the trading range could be something like 10554 to 10236. By the same token, if the index opens higher and does rally up to the 10618 level, the trading range could be something like 10618 to 10300. Either way, it is likely that next Friday the index will close in the red.
NASDAQ Friday closing price - 2326
Once again, the NASDAQ continued to outperform the rest of the indexes as it received the brunt of the buying this week taking the index up to its previous 17-month high at 2326 with a rally to 2327. It is certainly evident that blue chip and financial stocks have taken a back seat to the general market this past year. In essence, this is not a bullish statement for the market as on true bull years, the money normally flows to the big blue chip companies that offer the most security. The NASDAQ outperforming the other indexes generally means bargain hunting, rather than quality long term purchases.
The NASDAQ, prior to the high being made in January, did have a higher upside objective that it failed to achieve. Previous resistance, from 2006, was up between 2355 and 2375 and the stock failed to achieve those levels, stopping at 2326. With Friday's rally up to the previous high, it seems possible that further upside will be seen this week, and the original upside objectives targeted.
On a weekly closing basis, minor resistance is found at 2371 and at 24.18. Above that level, decent resistance is found at 2453 and major at 2523. On a daily closing basis, there is no resistance of consequence until decent to strong resistance is reached at 2454. On a weekly closing basis, support is minor at 2239 and decent at 2212 from a previous low close as well as from the 200-week MA. On a daily closing basis, support is minor at 2282 and minor again at the 50-day MA, currently at 2245. Below that level, resistance is decent at 2213 and decent again between 2200 and 2191 where the 100-day MA is currently located.
The NASDAQ accomplished a lot this past week having broken and closing above both the previous daily and weekly high closes at 2320 and 2317 respectively. As such, based on weekly closing charts, the index has open air above, for another 50-100 points, if the indexes continue higher. By the same token, having reached the previous intra-week high at 2326, any failure to follow through will results in a double top if the index trades below Friday's low at 2301. The same is true on the weekly chart if the index gets below last week's low of 2247, or closes in the red next Friday, below 2317.
One strong negative is that the NASDAQ is showing 3 open gaps (2185-2189, 2242-2247, and Friday's 2293-2301). This is not an index that generally leaves gaps open, especially without strong fundamental news. Nonetheless, even if it can be considered that the first 2 gaps are a breakaway and a runaway gap, the third gap has a high probability of being closed as 3rd gaps are not normally left open under any circumstance. Therefore having such a formation, is not conducive to maintaining the strength shown this past week.
Whatever does happen this week to the NASDAQ, it is still not the main index traders follow, and therefore any signals the index gives will need to be taken with a grain of salt.
SPX Friday closing price - 1138
The SPX is likely to be the index the traders follow closely this coming week. The index did break above a decent daily close resistance level down at 1114-1119 this past week and was able to generate that break in spike-type action, closing on the highs of the week. Follow through to the upside is expected to be seen with the very strong resistance up at 1150 as the objective.
Nonetheless, the probabilities do not favor the index getting up to that level as the resistance there was built over a period of 3 weeks and is considered strong. In addition, even if the bulls are able to continue the momentum this coming week and are successful in getting above that level, they still face major resistance up at 1163 and 1177 from 2004 and 2001 respectively. Facing 3 major resistance levels, all within 27 points of each other, is not something that will encourage strong buying coming in as each resistance level will have more and more selling. Such a scenario seems insurmountable with the present fundamental conditions seen.
On a weekly closing basis, resistance is strong at 1145. Above that level, from 2001 and 2004, resistance is strong again at 1157, 1163, and 1172. On a daily closing basis, resistance is very strong between 1147 and 1150. On a weekly closing basis, support is minor at 1102 and decent at 1066. On a daily closing basis, support is decent between 1091 and 1095, decent again at 1074 and strong at 1057.
The SPX has managed to close in the green on 7 of the last 8 trading days and the day it closed in the red, it was only by 1 point. As such, the index is now considered to be overbought and primed to fail as a lot of buying strength, without accomplishing a new high, has been expended over the past 2 weeks. In addition, the volume continues to be low but also lower than on the days the index has had a down day. Such action suggests that the buying is not strong. Without strong fundamental reasons to make new 17-month highs, the probabilities of the index failing prior to a new high being made have increased with each day up.
Nonetheless, it has to be mentioned that in 2004, the SPX was the last index to start its correction. In fact, the index continued to make new highs for the following 2 weeks even after the other two indexes had found their top. As such, it is possible to believe that the index will break above the 1150 level and scratch out a new 17-month high. Nonetheless, with even more strong resistance between 1157 and 1177, it is unlikely the index will be successful in establishing the up-trend.
It has to be mentioned, though, that the probabilities of the SPX showing the kind of strength it showed in 2004 are low. In 2004, the financial institutions were leading the way, and now it is the financial institutions that are dragging it down. As such, a repeat of 2004 is not likely to happen.
The rally seen this past week was not unexpected. It was likely that after a 10-month rally in the indexes that the highs had to be tested before a strong longer-term correction could begin. As such, the probabilities that this rally was such a retest are high.
Nonetheless, I do believe the most telling fundamental aspect to consider at this time is the fact that in 2004 (the year the indexes seem to be mimicking), the unemployment rate topped out at 6.3% in January. "In spite of that", the index still got into a 6 month correction that took them down over 10% in value. It seems impossible to believe that with unemployment "possibly" topping out at 10% (not an established fact yet), that the market would be successful in generating a further rally, when in 2004 with better fundamentals, it wasn't able to do so. With Friday's figures at 9.7%, unemployment is still 3.6% higher than the highest it was in 2004. How can the market exceed 2004 with those kind of numbers?
There are no economic reports due out until Wednesday. As such, the action on Monday will likely be all technical in nature. Any failure seen at the beginning of the week will likely be telling. Especially since the economic reports that are due out this week, are not overly important.
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Stock Analysis/Evaluation
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CHART Outlooks
I continue to believe that this move up has simply been a re-test of the highs. Having reached the upside objectives this past week, the market should sell off from here.
Nonetheless, rather than come up with new short positions, I do believe that some of the present ones should be increased. Mentions this week will include added short positions in three stocks presently owned as well as the one short mentioned last week that failed to reach the desired entry level, but could possibly see those levels reached this week.
All mentions will again be sales this week.
SALES
MSFT - Friday closing price 28.58
MSFT had a very negative classic reversal on Tuesday with higher highs, lower lows, and a close below the previous days low. Such a reversal was also very indicative as it occurred on the day the stock was breaking above the strong 100-day MA line at 29.00. With the subsequent sideways action seen the following 3 days, the stock now also shows an inverted flag formation that if broken (a move below 28.24) would give an objective of 27.62, as well as another probable test of the repeatedly retested 27.00 area where a big major gap exists. The inability of the stock to rally on a day the indexes were strong, suggests the stock has high probabilities of dropping this coming week. If the 27.00 level is broken next time around, drops down to close the gap at 26.72 will be likely. The 200-day MA is currently at 27.61 and would be a likely short-term objective on the downside. Any daily close above 28.63 would likely cause another retest of the 100-day MA at 29.00. Chart looks weak.
If the indexes do get into a corrective phase MSFT is likely to get back down to test the 200-week MA, currently at 26.65 or even down to the 100-week MA, currently at 24.45. With the failure seen this past week at the 100-day MA, it is unlikely the stock will get above that line, or above the previous intra-day resistance at 29.03. As such, that level will be considered strong resistance and used for the stop loss levels.
Sales of MSFT at Friday's closing price of 28.58 and up to 28.79 and using a stop loss at 29.13 and an objective of at least 26.65, will offer a risk/reward ratio of 4-1. The possibilities are high that a drop down to the 100-week MA at 24.45 will occur, and if that should happen, the risk/reward ratio will increase to 7-1.
My rating on the addition to the trade is a 3.5 (on a scale of 1-5 with 5 being the highest).
VALE - Friday closing price 30.66
VALE reached its upside objective at $30 this week, closing at 30.67. Nonetheless, the $30 level must be considered a major psychological resistance, especially since the stock had traded below that level 99% of the time since Aug08. The highest weekly closing during this period of time was seen in January at 31.48, after the 9 month rally from 8.80 topped out. The rally this past week must be considered a required re-test of the highs in order to stop the up-trend. Having closed near the highs of the week, it is expected the stock will see higher highs this coming week, with 31.31/31.41 as a possible objective. Nonetheless, if the indexes are topping out, the stock should follow suit and sell off thereafter. The stock gapped up this past week between 29.65 and 29.98. Even though that can be considered a valid gap as it was above the psychological resistance at $30, the gap has a high probability of being closed if the indexes start heading lower. Closure of the gap would be considered a bearish sign as it would mean the retest of the highs was successful.
Previous high at 31.96 has to be considered a strong resistance and not one that will get broken unless the indexes are able to renew their uptrend. Objective to the downside is the area where both the 100 and 200 week MA's which are currently at 22.55 and 22.15 respectively.
Sales of VALE between 30.74 and 31.31 and using a stop loss at 32.06 and having an objective of 22.50 will offer a risk/reward ratio of 6-1.
My rating on the addition to the trade is 3.50 (on a scale of 1-5 with 5 being the highest).
VCLK Friday Closing Price - 10.09
VCLK, with the help of a strong index market, was able to get back above the psychological resistance at $10 on Friday. Nonetheless, no previous resistance level of importance was broken doing so and therefore the stock still maintains its bearish outlook. On a weekly closing basis, the 10.38 level is considered strong resistance, and on a daily closing basis, it is 10.42. In addition, the 100-day MA is currently at 10.25, giving that entire area strong resistance strength. If the indexes are topping out, it is unlikely the stock will be able to get above this resistance and will sell off. A close below 10.00 would now be seen as a failure signal.
Having broken recently below the strong support at 9.08 and failing to follow through on the break has given an opportunity to the bulls to generate the rally back above $10. Nonetheless, the probabilities are high the stock will at least test the previous support level, if not go lower if the indexes correct strongly. As such, the 9.08 has to be considered a highly likely-to-be-reached objective.
Sales of VCLK at 10.23 or better and using a stop loss at 10.53 and having an objective of at least 9.08, will offer a risk/reward ratio of 4-1.
My rating on the addition to the trade is a 3.00 (on a scale of 1-5 with 5 being the highest).
OSK Friday Closing Price - 37.61
OSK has moved up close to 1000% over a period of 9 months from a low of 3.85 to the high seen the last week in November at 41.99. Since that time, though, the stock has been showing some topping out action and with the rally last week up to 40.20, it is possible a successful retest of that high has occurred.
In addition, OSK has been now been trading between $35 and $42 for the last 4 months without a resumption of the uptrend. Such action suggests that no further upside movement will occur without strong fundamental help.
On a weekly closing basis, resistance is minor at 38.67/38.80, decent to strong between 39.52 and 40.41, and strong at 41.62. On a daily closing basis, resistance is minor to decent between 39.06, and then again between 39.51 and 39.64. Above that level there is decent to strong between 40.25 and 40.38 and strong at 41.62. On a weekly closing basis, support is minor at 37.03 and decent to strong between 34.81 and 35.37. Below that level, support is minor at 31.26 and decent to strong at 28.68. On a daily closing basis, support is minor at 37.56, decent at 35.98 and decent to strong at 34.81. Below that level there is no support of consequence until 30.41 is reached.
OSK successfully tested the $40 psychological level 2 weeks ago, as well as the November high at 41.99, with a rally up to 40.20, followed by a spike down the previous week to 36.00, and an intra-day break of the 100-day MA, currently at 37.05. Since April of last year, OSK has been able to stay above the 100-day MA consistently. Nonetheless, over the past 3 months that line has been tested on 3 occasions and the last 2, the stock was able to pierce the line intra-week.
This past week was an inside week (lower highs, and higher lows) as the stock "treaded water" but with a negative bias. Nonetheless, the stock did trade down to 36.46 and had a successful retest of the support at 36.00. In addition, the stock did generate a rally on Thursday and Friday to close near the highs of the week, suggesting the stock will get above last week's high at 37.87 this coming week.
Resistance will be decent to strong up between 39.24 and 39.42. With the stock having closed near the highs of the week, it is possible that a rally up to that resistance could occur. Nonetheless, such a rally would likely be the last retest of the $40 resistance level and with a stop loss above the recent high, offers a great risk/reward ratio trade with a decent to high probability numbers.
OSK does show decent support, on a weekly closing basis, between 34.87 and 35.23, but if broken, there is no support of consequence until 30.15 is reached. Nonetheless, if the stock is heading lower, a minimum drop down to that level will likely be seen.
Sales of OSK between 39.23 and 39.41 and having a stop loss at 40.30 and an objective of 34.87 will offer a 4-1 risk/reward ratio. Good possibilities exist of a drop down to 30.15 and that would lift the risk/reward ratio to 9-1.
My rating on the trade is a 3.75 (on a scale of 1-5 with 5 being the highest).
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Updates
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| Updates on Held Stocks
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Closed Trades, Open Positions and Stop Loss Changes
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| NUAN got hit with a rumor on Friday that Google was interested in purchasing the company. Rumor was later dismissed as analysts don't believe that such a purchase would be of help to the Internet giant. Nonetheless, once the stock got above the $15 level, it was evident that stop loss buying occurred, which caused the stock to soar up to the $16, all in one day. From a chart perspective, closing above the $15 level on Friday was a mini breakout of sorts, considering that the stock had been acting negatively prior to the news. Nonetheless, just like with the indexes a retest of the highs, which had not yet occurred previously, was needed to be seen and therefore if the rumor is untrue, it is possible the stock will give up most of its gains in short fashion. It is possible that the stock will show some follow through on Monday with 16.31 as a possible objective. Nonetheless, unless there is some truth to the news, this seems like a good opportunity to sell or short the stock. ELON had a strong day in which it was able to get above a 9 month resistance level from Nov08 to Jul09 at 8.94. Nonetheless, if you stretch out that resistance level 3 months on each side, more resistance (but not as strong) is seen between 9.27 and 9.43. On a more recent note, though, there is minor to decent resistance at 9.11 that wasn't broken. A break of that level on Monday would likely generate enough buying to take the stock up to at least 9.43 but probably up to the 9.70-10.00 level where the 50-day, 50-week, and 100-week MA's are located. Nonetheless, if the stock does get up near $10, consideration should be given to profit taking, as it is likely the stock will drop back down to at least the 8.00-8.50 level if the $10 level is tested successfully. GIGM generated a daily and weekly buy signal on Friday closing above the previous weekly closing high at 3.01 and above the previous daily closing high at 3.06. Nonetheless, the stock is now facing a stronger resistance level up at 3.38 that may be a bit more difficult to break. It must be also mentioned that the 100-day MA is currently at 3.58, giving that area more importance. Nonetheless, the stock seems to have established that a bottom is in place and the 3.00 level should now act as strong support. Ultimately, with the bottom in place, rallies up to the gap area between 3.89 and 4.24 should be seen over the next 3-5 weeks. Closure of that gap could be a strong buy signal for further upside. WMT had a classic reversal day with lower lows, higher highs, and a close above the previous days high. Having tested successfully the 100-day MA, currently at 53.05, with the drop on Wednesday to 53.15, it now seems likely the stock will be moving up to test the resistance up at $55. Keeping in mind that this stock is often a contrary indicator to the indexes, the fact the indexes may be falling back this week, could be a positive sign for the stock. Stops can now be raised to 52.95 as a break of the recent lows at 53.15 and of the 100-day MA at 53.05, would be a negative sign. CAL now shows an ominous double top at 21.58/21.44 with Monday's rally and subsequent failure. In spite of the strength in the indexes on Friday, the stock closed in the lower half of its weekly trading range, suggesting the weeks low at 20.20 will be broken this coming week. Support is down between 19.18 and 19.37, and that will likely be the week's downside objective. Nonetheless, that support is not strong and if the stock does confirm the double top with a close below $20 next Friday, drops down to the 17.19-17.50 will then become the first target. Any close above 21.20 or a rally above 21.58 will now likely generate further upside with an objective of 23.42. This coming week is important for the stock. HON this past week was able to break above a previous intra-week resistance at 41.55, as such, only the recent 17-month high at 43.21 remains as resistance. Like with the indexes, the rally this week can be attributed to a needed retest of the highs. Nonetheless, the stock did spike up on Friday and closed near the highs and without any resistance until 43.21 is reached, the stock could flow upward this coming week. By the same token, any failure seen would be strongly indicative that the retest is successful. A drop below Friday's low at 41.23 would be a positive for the bears and would likely cause the stock to drop down to at least the $40 psychological support. This is an important week for the stock. MS was able to break and close above the 100-week MA, currently at 29.20. Nonetheless, the rally only took the stock up to the 200-day MA, currently at 29.80. The break above the 100-week MA could be indicative of higher prices but the stock will need to confirm the break with another close next Friday above that line. By the same token, the failure of the stock to break above the 200-day MA likely means the stock was "dragged up" by the indexes. If the indexes begin to fail, the stock will likely give back all of its gains in a fast manner. Any red close on Monday could be seen as a negative. Any red close below 28.90 (50-day MA) would likely bring in the bears again. The inverted flag formation on the weekly chart is still there but slightly diffused. A break below the recent low at 26.15 would still be a break of the flag, but the objective of such a flag has now changed, with 24.75 now being the objective. Any further upside, above Friday's high at 29.75 would begin the change the bearishness of the chart. RIMM attempted one more time to get above the very strong resistance and gap area at 72.00 with a Monday rally up to 71.79. Nonetheless, the stock failed and in spite of the strength in the indexes managed to close on its lows of the week and below the psychological support at $70. If the indexes do break this week, the possibility of a drop down to the $63 level will be high. Nonetheless, the repeated attempts to get above 72.00 with rallies up to 71.34-72.00 are now so numerous (6 out of the last 12 weeks), that the area will likely act as a magnet as such a "mesa-like" top is not usually left unbroken. The 67.89 level is likely to be important support this week, because if it is broken, there is little to stop the stock from dropping down to 63.36. The stock did close below the 200-day MA, currently at 70.00, and it is likely that will be an important pivot point for the week. Any rally above Friday's high at 70.44 or below Friday's low at 69.40, is likely to be indicative. DD was able to make a new 17-month weekly closing high on Friday, much like the NASDAQ did, but was unable to get above the 17-month intra-week high at 35.62. The $35 level continues to be strong psychological, as well as chart-wise, resistance. Having gotten up and slightly above the 35.00 level on 13 occasions over the past 5-month, but failing to generate any further upside of consequence, it is evident that the level is major resistance that won't likely be broken without a catalyst of importance. Nonetheless, like with the indexes, the stock has been on a 3-week rally and if the indexes continue higher, it is likely the stock will be dragged up as well. On the other side of the coin, if the indexes fail here, the stock is likely to fail as well. A break of Thursday's low at 34.03 could be a catalyst for a drop back down to the 200-day MA, currently at 31.55. A break above the 17-month high at 35.62 would be a strong positive. MSFT had a very negative classic reversal on Tuesday with higher highs, lower lows, and a close below the previous days low. Such a reversal was also very indicative as it occurred on the day the stock was breaking above the strong 100-day MA line at 29.00. With the subsequent sideways action seen the following 3 days, the stock now also shows an inverted flag formation that if broken (a move below 28.24) would give an objective of 27.62, as well as another probable test of the repeatedly retested 27.00 area where a big major gap exists. The inability of the stock to rally on a day the indexes were strong, suggests the stock has high probabilities of dropping this coming week. If the 27.00 level is broken next time around, drops down to close the gap at 26.72 will be likely. The 200-day MA is currently at 27.61 and would be a likely objective on the downside. Any daily close above 28.63 would likely cause another retest of the 100-day MA at 29.00. Chart looks weak. TRLG continued to rally after the very bullish earnings report seen the previous week. On a weekly closing basis, no resistance is found until 26.76 and even then, that resistance must be considered minor. Nonetheless, in the 57 months the stock has traded, only 8 of those months has the stock closed above $25, and the highest monthly close ever is 27.15. On the daily chart, the stock does have another minor resistance at 26.56 and it seems that level held up on Friday when the stock closed at 26.44. The stock has now had 8 days in a row with green closes and 15 out of the last 18 days as well. The stock is severely overbought after a 31% increase in price seen in the last 3 weeks. The Retail Sales number is due out on Thursday and that could have an effect, especially since it is expected to be lower than the previous month (2% vs. last month 5%) and the winter conditions seen in January/February could even make it come in lower than that. With all the margin call liquidation now over, the stock finds itself strongly overbought and likely to at least have a correction back down to the psychological $25 level as even on the 3 months the stock has been at its strongest (Aug & Sep 2008 and Oct 2009) the stock saw drops to 24.43, 25.00 and 23.87 respectively. In addition, if the indexes do start to drop this week, it will be difficult for the stock to maintain is upward momentum due to its overbought condition. VALE reached its upside objective at $30 this week, closing at 30.67. Nonetheless, the $30 level must be considered a major psychological resistance, especially since the stock had traded below that level 99% of the time since Aug08. The highest weekly closing during this period of time was seen in January at 31.48, after the 9 month rally from 8.80 topped out. The rally this past week must be considered a required re-test of the highs in order to stop the up-trend. Having closed near the highs of the week, it is expected the stock will see higher highs this coming week, with 31.31/31.41 as a possible objective. Nonetheless, if the indexes are topping out, the stock should follow suit and sell off thereafter. On a bullish note, the stock gapped up on Friday between 29.68 and 29.98 and that is a possible gap area due to the psychological importance of $30. As such, if the 31.31/31.41level gets taken out, it could be time to liquidate the short positions. Closure of the gap, though, would be considered a bearish sign as it would mean the retest of the highs was successful. VCLK, with the help of a strong index market, was able to get back above the psychological resistance at $10 on Friday. Nonetheless, no previous resistance level of importance was broken doing so and therefore the stock still maintains its bearish outlook. On a weekly closing basis, the 10.38 level is considered strong resistance, and on a daily closing basis, it is 10.42. In addition, the 100-day MA is currently at 10.25, giving that entire area strong resistance strength. If the indexes are topping out, it is unlikely the stock will be able to get above this resistance and will sell off. A close below 10.00 would now be seen as a failure signal. Stops should be raised up to 10.53.
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1) AMZN - Shorted at 126.90. Liquidated at 127.90. Loss on the trade of $100 per 100 shares plus commissions.
2) GIGM - Purchased at 2.87. Stop loss now raised to 2.93. Stock closed on Friday at 3.21.
3) RIMM - Shorted at 71.65. Covered short at 69.52. Profit on the trade of $213 per 100 shares minus commissions.
4) WMT - Averaged long at 53.325 (3 mentions). Stop loss raised to 52.95. Stock closed on Friday at 54.14.
5) ELON - Purchased at 8.31. Stop loss now at 7.65. Stock closed on Friday at 9.04.
6) VALE - Shorted at 30.30. Stop loss at 32.03. Stock closed on Friday at 30.67.
7) MS - Shorted at 28,55. Averaged short at 27.935. No stop loss at present. Stock closed on Friday at 29.41.
8) HON - Shorted at 41.55. Covered short at 41.85. Loss on the trade of $30 per 100 shares plus commissions.
9) AMZN - Covered short at 119.90. Shorted at 118.84. Loss on the trade of $106 per 100 shares plus commissions.
10) RIMM - Shorted at 69.11. Stop loss at 72.10. Stock closed on Friday at 69.50.
11) CAL - Shorted at 21.09. Averaged short at 20.29 (2 mentions). Stop loss is at 21.68. Stock closed on Friday at 20.69.
12) NYX - Covered short at 27.05. Shorted at 26.01. Loss on the trade of $104 per 100 shares plus commissions.
13) HON - Shorted at 40.02. No stop loss at present. Stock closed on Friday at 41.91.
14) VCLK - Shorted at 9.78. Stop loss at 10.53. Stock closed on Friday at 10.09.
15) MSFT - Shorted at 28.78. Stop loss at 29.13. Stock closed on Friday at 28.58.
16) TRLG - Shorted at 25.94. No stop loss at present. Stock closed on Friday at 26.44.
17) DD - Shorted at 33.83. Stop loss presently at 35.72. Stock closed on Friday at 34.97.
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Encyclopedia of Chart Patterns. A must have for chart aficionados! |
The opinions and commentaries by Mr. De Vito are not a recommendation to buy or sell, but rather
a charting guideline, based on his own knowledge and experience, regarding the stocks he is following or
that are brought to him by others. Mr. De Vito does not presently offer a track record of his trading experiences.
No inference of success and/or failure should be assumed. The
information enclosed above, regarding his background, length of trading, and experience, is correct
but is not meant to suggest, state, or infer any future success in trading, based on his opinions. The information herewith included should only be used by investors who are aware of the risk inherent in securities trading. Mr. De Vito accepts no liability whatsoever for any loss arising from any use of the information and/or comments he supplies. |
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