Thursday, October 14, 2010

Wednesday Morning

Markets rallied again in healthy volume as a myriad of sectors performed well. Transports, commodities were robust. Indexes certainly didnt get any help for earning reports from JPM INTC, both of which finished lower. CSX delivered a powerful performance via earnings. For all three of my readers I apologize for the misunderstanding regarding earnings reports from IBM VMW AAPL. I misspoke and take full responsibility. They report next Monday. The market itself feels extended but its been running strong since September. Play the trend. Remember the Keynes quote, "markets can remain irrational longer than you and I can remain solvent". To me it feels like a real bull market. It has the feeling of not giving you a chance to get in. Very bullish behavior indeed. Let the volume and price action dictate your trading as always. Not your own personal opinions.

Stocks showing specific buy points include: ADSK @33.70 VALE @32.94 (both cup with handles). QSFT @25.29 (3 weeks tight pattern). TCK @47.02 in a cup without handle, however it may from one in the near future. RADS @19.42 (square box pattern).

MT can be purchased thru 36.25 (200 day), RIG thru 68 its 200 day as well. RIG has traded beautifully as we flagged it holding its 50 day MA @50 in early August on an earnings beat and then a retest of that 50 day MA later in August. Could the news this week of Obamas lifting of the offshore drilling moratorium be priced in? Again let the price action in the stock guide you. XOM chart in this sector looks like AA SGY. Both recently plowing thru their respective 200 day MAs. They are laggards though. Will they play catch up? Again who knows. Let the chart tell you.

ORCL posted a very bullish upside reversal intraday breaking out from a tight consolidation pattern. WYNN can be bought near par. That break thru 100 looks significant.

Techs getting closer to their 50 day MA for a test still include the software names. VMW @82, CRM @111. AKAM found resistance at its 50 day Wednesday. So did CRUS. CREE is there now. Lets see how they perform there.

We bought some SMG @52.66 as it emerged from a 3 weeks tight pattern on big volume. Got stopped on PSA for a small loss at it broke above its 50 day. WFMI is on a tight leash here.

Good luck.

The author owns EXXI APA WLL SMG. Short AVGO PSA.

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