Strong Move

Posted by downtowntrader | 7/19/2006 09:12:00 PM | 0 comments »

Very strong move today coming from a combination of things. The indices have been oversold and any time there is a mention of stopping the rate hikes, the shorts scramble to cover. I believe if the fed does pause it will ignite a decent rally, but it won't hold up because the underlying reason for stopping hikes would be due to a slowing economy. This will eventually show up in corporate earnings. Keep in mind the past three 100+ point days got the indices nowhere. Todays rally as impressive as it was, really only took the indices to some declining sma's. That being said, this rally should last a few more days. I mentioned earlier this week and last week that I would be focusing on longs and there have been some good moves on stocks I've mentioned (such as BIDU,CSH,IBCA,MED,VOL,etc.). Now is the time to start locking some profits in as there are no gaurantees that any of these moves will last.

Here are a few charts that look promising.

ANDE may try and clear resistance here. They made a higher low and if they can clear the downtrendline, they should make the higher pivot high.
CRDN is bouncing off the 200sma.
JCOM looks to be stabilizing at the 50sma and trendline.
I have a bit of a quandary with HAL. They have broken down here and present a nice shorting opportunity anywhere near 35, but they report earnings on Friday. I hate holding stocks over earnings, but this looks like a nice chart.
The following are some utilities which should remain one of the stronger sectors for the near future.

FE cleared a nice base today. I would look to any retest of the breakout for an entry.
TXU looks like they are accelerating their uptrend here.
AES may be clearing a bull flag here although it may be a little early.
AVA chart looks similar to TXU with an accelerating move higher. I would probably wait on this one as it is moving higher above the 9ema.

Tomorrow should be interesting to see if the markets get any sort of follow through. Apple was trading 10% higher after hours so keep an eye on sympathy plays such as MRVL. Also, EBAY and MOT were looking good. QCOM and CTXS were getting hammered when I last checked.

One additional thing to mention. Keep in mind that options will expire on Friday and some of the games will begin or have already begun. Also, keep an eye on earnings releases for any stock you may play.

Good Luck,