Commodities Rally

Posted by downtowntrader | 10/25/2006 09:20:00 PM | 0 comments »

The Fed kept the status quo as expected but the indices responded in a volatile manner anyways. Tomorrow should be a pivotal day as the true direction reveals itself. The story today though, in my humble opinion was the strength in commodity stocks. If they have formed a bottom similar to stocks a few months ago and rally from here, then the Fed will be forced to act at some point. I suggested that gold and silver stocks may be bouncing exactly a month ago, and they have responded very nicely. Keep in mind that Gold, GLD, $HUI, etc. all remain under their 200sma's and will be running into resistance soon.

Blue Dolphin Energy Company (Public, NASDAQ:BDCO)
BDCO confirmed support again today and if oil keeps running then BDCO will take off.

China Medical Technologies, Inc. (ADR) (Public, NASDAQ:CMED)
CMED dipped to the 20sma and found pretty good support. Watch for a bull pennant breakout.

Hansen Natural Corp. (Public, NASDAQ:HANS)
HANS is trading a very tight range and if the indices have another run in them, they may breakout. India Limited (ADR) (Public, NASDAQ:REDF)
REDF is another stock trading in a pennant and possibly finding support at the 20sma.

Ansoft Corporation (Public, NASDAQ:ANST)
ANST is trading a much more loose pennant but is still above the previous breakout area. Watch it closely over the next few days to see if it can firm up.

Here is a update on some of the stocks on Sundays watchlist. Although I've been worried about the indices being overbought lately and preaching discipline, I have continued to play mostly to the long side. There is still no confirmation of a top although todays action wasn't confirmation that everything is fine and dandy either. The next day or two will be pivotal as the Nasdaq and Russell are not confirming the action in the Dow and SP500. The Nasdaq Composite is trading a nice little triangle, but it is in danger until it closes over 2368.11.

Good Luck,