Markets Pullback

There are no charts tonight, as I feel it's probably time to step back and wait to see what the markets will do. I posted some more commentary on downtowntrader.com for those interested.

Good Trading,


Joey

Stock Chart LEH

Stock Chart Analysis LEH

Lehman Brothers Holdings Inc. (Public, NYSE:LEH)

Financial Stocks have been under performing throughout the recent rally, and should lead the way lower on the next downturn. LEH's chart is interesting as resistance is clearly defined, yet the lower boundaries of support are still open to much interpretation. It looks like the $49-50 is the clear ceiling until proven otherwise. It looks to me like it may probe for support in the coming sessions as supply seems to be overwhelming demand. I don't know how much lower it will go before buyers step in, but LEH could easily drop 5-7 points from here and still be confined to a trading range. That is over a 10% move from current levels and the stop is manageable as well.



Good Trading,


Joey

for more analysis, check out downtowntrader.com

Stock Chart PFCB

Stock Chart Analysis PFCB

P.F. Chang's China Bistro (Public, NASDAQ:PFCB)

I'm not sure when or if gas prices will start impacting the consumer, but the first place most will cut back is on eating out at the mid-tier restaurants. The clientele for high end restaurants are usually less impacted during economic downturns, and the cheaper restaurants could have a trickle down effect from consumers looking to curb their spending rather then staying home. I'm not sure how business is doing for PF Changs, or their prospects moving forward, but the chart is showing some possible weakness. It just broke down through a rising wedge which is a bearish pattern. It's bollinger bands have contracted to it's narrowest range in several months and just began expanding again. This could be signaling the beginning of an increase in volatility and with PFCB falling out of a bearish pattern, it looks like the move will be lower. It's also at a point where the stop loss is clear and risk is minimal compared to the possible reward. I would prefer an entry near the declining 20 day sma, but it may not give that chance. Of course, a lot depends on the markets the next few days.




Good Trading,


Joey

for more analysis, check out downtowntrader.com

Stock Chart GFA

Stock Chart Analysis GFA

Gafisa SA (ADR) (Public, NYSE:GFA)

While I can't predict how much longer this rally will last, I know that it's entirely possible that it can be much longer then everyone expects. As such, I continue to take the setups as they occur, and proper money management will get me out of the way when things finally reverse and head lower. GA looks like a classic buy at support candidate with limited downside. It broke out of a healthy base in early May, and is now coming back to retest the breakout area. I have no idea how long it will take to retest, but it looks like it has some more consolidation to go through. This should present some decent prices to get in and the breakout from the original base looks pretty healthy with a clean strong breakout on higher volume. The breakout was also to all time highs, although that's not saying much, since the stock has only been trading a little over a year. All in all though, it looks like a pretty good setup to monitor.



Good Trading,


Joey

for more analysis, check out downtowntrader.com

Stock Chart VMW

Stock Chart Analysis VMW

VMware, Inc. (Public, NYSE:VMW)

VMW was my number one pick for 2008 and unfortunately, I've gotten it very wrong as we reach the halfway mark. It has yet to fill the nasty gap down in February and remains down about 25% on the year. However, there is a chance it has bottomed, as it has had a fairly resilient rally off the lows. It set a higher pivot point, clearing the high in February, and could be attempting to set a higher low here. It cleared the recent down trend channel as well. While it may not be officially in an uptrend here, enough has happened to reclassify the trend to sideways or rangebound. If it does successfully set a higher low here, then it will challenge gap resistance near $78, which in of itself is a decent trade. However, there is a chance for longer term traders that VMW won't come near the IPO price ever again.


Good Trading,


Joey

for more analysis, check out downtowntrader.com