Saturday, October 9, 2010

Weekend Warrior

Another bullish day with markets opening on their modest lows and closing near their highs for the day. Good action with poor news regarding the jobs picture, is another bullish signal. Volume rose on the indexes as market participants betted on QE2 materializing to inject liquidity into the system. Ag stocks had a banner day and energy as well as the Feds anticipated purchase of long term treasury debt (quantitative easing) will increase bond prices. In that scenario interest rates will decrease and therefor our currency as well. Falling dollar=stronger commodity prices. Enough said.

Stocks creating specific buy points are: 3 week tight patterns QSFT @25.29, SLW @27.41, ORLY @54.52, DISCA @44.49, DTV @42.71. Double bottom patterns: XEC @77.21, JWN @40.66, FAST @55.95. Double bottom with handle: A @34.38. Cup with handle patterns: NBL @77.73, SWC @17.52.

APC can be bought thru its 200 day MA @59 and MT thru its line as well @36.25. RADS can be bought thru 19.42.

Recent leaders we can try and catch on a low volume retreat to their 50 day MA this week are: CTSH @62, VIT @30, AAP @56, ARMH @17, ALTR @27, SWKS @19, AXTI @6.

Software and computer related names got hit this week after cloud computing worries. Stocks that can be shorted as they try and test their 50 day MAs are: VMW @82, CTXS @62, CNQR @48.25, CRM @110, AKAM @47, FFIV here. If you put a gun to my head and made me play from the long side I would play the ones that held above their 50 day MA during the carnage. Names like ROVI INFA RAX RVBD.

Stocks forming the right side of their bases are: PVH CAKE SOA CE. Lets look for VALE to form a handle this week. XOM peaked it eyes over its 200 day on Friday and it looks like WLT will be headed toward par in the near future.

Some retail performed well this week. WRC continues to perform well after a recent breakout @52.21. LULU blasted thru a 46.67 double bottom with handle pattern. On downside URBN looks like a broken chart.

INTU performing admirably since its 8/20 gap up. TIBX, which I regrettably got stopped on held its gap up almost to the penny.

Good luck.

The author owns EXXI APA WLL. Short AVGO PSA WFMI

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