Friday, October 22, 2010

Friday Night Charting

Friday was a lackluster day that ended with little fanfare. Digging deeper some positive tones appeared. Leading stocks displayed constructive action. BIDU CMG AMZN RVBD all accelerated in healthy volume. Volume was quiet as earnings season proceeds in benign fashion. Next week more reports will be given and so far the market has responded well. The days big winning groups included semis and restaurant groups.

Stocks sporting specific buy points include: CMI @94.97, EMN @80.322, DD @47.60, FDO @46.53, KMX @30.20, NKE @83.50, IBN @53.23, SMTC @21.08, BMS @34.35, DVA @72.60, MRO @36.10, NBL @79.16, ORLY @54.52, COH @45.05, CIB @67.89. All those previously mentioned were 3 weeks tight patterns. Cup with handle patterns are: TCK @46.48, TKC @19.48, PVH @64.23. And finally ADSK @35.28 is a cup without handle. As always buy only on big volume (50% more than avg daily volume) and do not buy premature. Let the price and volume confirm the breakout. Keep an eye on A as it builds the right side of its base.

Stocks rebounding off their 50 day MA are ARUN APKT ARMH NVDA. These all are exhibiting bullish behavior. Equities that can be bought off that 50 day MA are RAX @22, AMT @49. AA can be bought @12.25 off its 200 day MA. A buy stop can be placed on AKAM it it bursts thru its 50 day MA @48.25. Look for big volume of course.

Gap ups are also very bullish habits. Stocks that showed this specific situations are SLB RVBD XXIA. Buy these on weakness as long as the gap up holds. An example of this is GPC. It has held its gap up now for more than a week. That can be purchased here near 47.

Stocks and sectors showing weakness include solar names. JKS TSL both losing their 50 day MA. Bearish moves. Natural gas names like APA EOG ECA are showing decay. Mining equipments makers BUCY JOYG are looking shaky. MT RIG still finding resistance at their 200 day MA. Stocks that can be shorted as they approach their 50 day MA and fail are: CTXS @62, CRM @111, OPEN @60.

Portfolio changes were selling FCX for no gain or loss and buying CAKE @28.44 from a cup with handle base.

Good luck.

The author owns ORCL RADS SMG APA WLL CAKE. Short AVGO.

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