The markets continued their march today. Bears are frustrated, and there is no doubt that short covering is fueling a big chunk of this rally. Here are a few more charts I've added to my watchlist.
Corrections Corp. of America (Public, NYSE:CXW)
CXW looks like it is starting to make the turn higher.
RELM Wireless Corporation (Public, AMEX:RWC)
RWC pulled further back from the last time I recommended them, now looking to find support on the bollinger band.
Nice Systems Ltd. (ADR) (Public, NASDAQ:NICE)
Nice is pulling back off the breakout in a nice pennant.
Hologic, Inc. (Public, NASDAQ:HOLX)
HOLX may be getting ready to make a run at clearing resistance.
Technitrol, Inc. (Public, NYSE:TNL)
TNL is trading in a small triangle pattern that is usually a continuation pattern.
On a lighter note. I was happy about my 50 seconds in the moronland box game, until I saw ugly mention he got 80 seconds. Looks like I will have to skip trading tomorrow and try and get 80 seconds. At least I have evidence of my 50 seconds though ;)
Good Luck,
DT
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.
Rediff.com 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,
DT
Tomorrow is Fed Day and I will probably hold off on initiating any positions until Thursday. Although tomorrow shouldn't have any changes to rates, the wording will be excrutiatingly examined. With the markets overbought, this could be the catalyst for profit taking, so I will stand aside and manage my open positions. With that in mind, here are a few links to check out:
- Kirk may of found the perfect contrarian indicator. I noticed something similar this morning as I heard an ad on bloomberg radio stating, "the market is at all time highs, and people are getting rich. With only a few hours a week, blah, blah, blah". This is the type of advertising that was promoting getting rich on oil a few months ago, and on real estate before that.
- I'm a little late with this link, but Market Speculator on Part time trading is an interesting topic.
- Ike Iossif is expecting a decline late this week.
- I love these narratives from Highchartpatterns. I think beginning traders can learn a lot from reading these types of posts as to how advanced traders tackle the markets.
- Here is part 1
- Here is part 2
- and part 3
- On that subject Traderjamie tackle how he trades gaps. Part 2 coming soon.
- And Tradermike had a classic post on how he trades a while ago, but it is a great post for those trying to improve on their routines.
- Traderfeed had a nice post with very good advice for beginning trader. I'm not sure how Brett has time for all the detailed analysis, book writing, trading, and blogging, but man he keeps pumping out quality stuff every day.
DT
The Dow had a strong move today pushing to fresh all time highs. The SP500 and Nasdaq had decent moves although Big Caps were stronger. One interesting thing to note was how weak the Russell was. Although it closed green, it didn't even clear Fridays high. Keep an eye on that divergence as it could show declining optimism in the rally.
Hansen Natural Corp. (Public, NASDAQ:HANS)
HANS is up against the downtrendline and formed a hammer today near support. Watch tomorrow to see if it attempts a breakout or if it fails.
Orbital Sciences Corp. (Public, NYSE:ORB)
ORB bounced off the rising trendline today and may be headed up to test for a triangle breakout.
Charming Shoppes, Inc. (Public, NASDAQ:CHRS)
CHRS is trading a very tight range and is just pennies from a 52 week high.
Diodes Incorporated (Public, NASDAQ:DIOD)
DIOD is holding near a trendline and if semiconductors catch a bid, then they may clear this broadening wedge type consolidation.
Infosys Technologies Limited (ADR) (Public, NASDAQ:INFY)
INFY has had quite a little trend here and may be bouncing off the 20sma. This is one of those "trend is your friend" trades.
Philadelphia Consolidated Holding Corp. (Public, NASDAQ:PHLY)
Another "trend is your friend" trades here with PHLY. PHLY may find support here at the 20sma visiting it for the first time since 8/28. It may end up finding it's way to the rising trendline over the next couple of weeks, but it may still provide a nice quick trade.
Ruth's Chris Steak House, Inc. (Public, NASDAQ:RUTH)
I opened a small position in RUTH today, but decided to post it tonight as it still looks decent for an entry, particularly if it can clear the neckline of the reverse head and shoulders base.
Good Luck,
DT
I am feeling a little under the weather tonight so I will finish this post up tomorrow morning. I went ahead and published it anyways so that at least the charts would be up. In short, I'm mixed on the overall markets, but OIH looks like it may pull back here and retail was looking good. Both are correlated so it would make sense. I will add commentary by 10:00am tomorrow.
**Updated 10/23/2006**
Oil Service HOLDRs (ETF) (Public, AMEX:OIH)
The OIH ETF which tracks the oil services sector looks like it may pullback here at resistance. It has retraced up to the neckline of a head and shoulders top and may now be reversing.
Corrections Corp. of America (Public, NYSE:CXW)
CXW had a high volume hammer on Friday. Some of this volume may be options related, however, it's bullish that they closed well above the $60 strike which had the most open interest.
Ruth's Chris Steak House, Inc. (Public, NASDAQ:RUTH)
RUTH is close to breaking out of a reverse head and shoulders bottom. The right shoulder is a little H&S of its own.
Sprint Nextel Corporation (Public, NYSE:S)
S looks like it wants to challenge the downtrend line and possibly overcome it this time.
Starbucks Corporation (Public, NASDAQ:SBUX)
SBUX is tracing out a bull flag after breaking out a few sessions ago.
Costco Wholesale Corporation (Public, NASDAQ:COST)
COST cleared a reverse head and shoulders and is now in the process of retracing to support.
WellCare Health Plans, Inc. (Public, NYSE:WCG)
WCG may be ready to turn up and test the top of this little rectangle.
Varian Semiconductor (Public, NASDAQ:VSEA)
VSEA is at the bottom of this uptrend channel and may be turning here.
LifeCell Corporation (Public, NASDAQ:LIFC)
LIFC has managed to withstand a few bouts of selling as is near support again.
IntercontinentalExchange, Inc. (Public, NYSE:ICE)
ICE retraced to the breakout area and has been forming some narrow range candles. Watch it to see on which side of the candles it decides to go.
International Assets Holding Corporation (Public, NASDAQ:IAAC)
IAAC is forming a pretty steep triangle and should be close to some sort of strong move.
Carpenter Technology Corporation (Public, NYSE:CRS)
CRS cleared the downtrend and has already made a higher pivot high and low. It looks like it is close to making another push higher.
Most of these picks are assuming a bounce in the indices in the coming days. It is a little early to be thinking shorts, however, if the indices bounce higher and sell off on high volume again, then the chance of a topping pattern is higher.
Good Luck,
DT
