Featured setups from Wednesday May 11, 2005 closing data symbol scan
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Notes for the Day
Several hundred charts later…
- Market Direction notes from yesterday are most pertinent here.
- In a positive market environment, a number of Wednesday’s featured charts will be fair game for Thursday including WFC (banks), TUP (consumer non cyclical), DIA of course, SMH (or AMAT and INTC if market is very strong), CMCSA (cable) and HON (defense).
- Speculative name from yesterday’s list – COVD, made a very tiny narrow range 7 bar – certainly is worth the time and effort to stalk a long there in the right market environment
- Wednesday’s defensive names such as AEP, GIS and KFT which did move up need to be watched carefully for the dreaded one up bar wonder – move to tight stops at the earliest opportunity.
- Again a lack of shorts is more an indication that this retracement remains “buyable” – we need to see a weak up day before a great number of short opportunities will show up. Hopefully a market rally will turn up on our doorsteps and we’ll be happy we aren’t short in a big way; but if oil or other factors do weigh in on the market, rather than wishing for short exposure on the broad market (which is getting hard to get with QQQQ and other ETF shorting restrictions), grabbing long exposure in energy may be a better solution.
Above all, remember that our goal is to position ourselves where price ought not to go without a real attempt at heading in our preferred direction of trade. We can consider ourselves successful even if none of our setups reach the trigger, as the primary objective is to avoid taking positions unless price is at least able to prove to us its able to head in our direction.
Long Setups
General common strategy: Unless noted otherwise, buy stop just above the “high” value, with an initial protective stop at the low value of the bar, not below the bar.
Test of Bottom – Reversal
AA – aluminum, 2B test of bottom. Both AA Alcoa and and AL Alcan have really been sold off lately; given the part industrial, part consumer bent to these stocks its reason enough to wonder about the state of the economy or timing within the current economic expansion cycle. Certainly the big sell off makes me fret a little. But here’s a 2B test of bottom and valuations are lower than the’ve been in some time. I will probably opt for a trade in AL myself.
Retracement or Pause in Up Swing / Up Trend
ENERGY – COAL
FDG / FDG.U:C – energy, coal – talk about a pause in an uptrend, a triangle is the ultimate in pauses. Eventually this market will be one we want to be in as “alternative energy” for the Bush administration means Coal, Natural Gas, future Liquified Natural Gas terminals (if they can get past the NIMBY issues), and Nuclear plans. New “clean” coal ads were all the rage last year and if one took the hint, one was rewarded richly. Is it too late to cash in? Might be, but this break out from a triangle is an opportunity that I must pursue with a trade opposite (long) lurking above…
MEE – energy, coal, this one with a US focus and we can see price has already broken out of the downtrend and this is the first pause since.
ENERGY – OIL AND GAS
UTS:C – Canadian oil major PetroCanada bought a 60% share in UTS’s tar sands project, some speculative value in stalking this one. Higher risk for buy and holders.
APA – pulled back to 50% fib retracement and still holding for now.
ECA – does one better than APA and is tradling well above its 50% retracement
VLO, refiner – continued pressure on gasoline supply gives us reason to stalk but lets keep in mind the potential for a H&S top here…
TECHNOLOGY
QQQQ – Nasdaq 100 ETF, we’ve been patient on reloading longs in QQQQ, its time to get ready if resistance breaks just above…
ATYT / ATY:C (TSX) – shaken out of this one intraday, I wonder why I let myself react as such. Darn thing will probably go up tomorrrow to teach me a lesson.
CLS / CLS.SV:C – may get a delayed positive boost to this sector thanks to CSCO report the other day. SLR, JBL should be considered as well.
NSM – national semi; don’t for get SMH
FINANCIALS
SLF:C – insurance, diversified – a name for Canuks following this page.
GOLD
ELD / EGO; already long in ABX off the intraday low, I will look to add exposure via ELD if currency markets make gold work on Thursday. I’ve low expectations unless yuan speculation comes back to the forefront overnight. Regardless of whether it triggers or gold works at all tomorrow, this one goes in the file folder for future use – when I come across names and charts that appeal to me I file them away to reuse at the next opportune time. Note that PDG – a former favorite turned dog – has probably sold off enough to be interesting if / when a bottoming envrionment shows up in Gold.
Short Setups
General common strategy: Unless noted otherwise, place a sell alert at or just below the low of the setup bar, and look for the first failed intraday bounce after the low has been broken. What we are looking for is price to push down, bounce a little, and fail again – this is where we want to get short.
Retracement or Pause in Down Swing / Down Trend
PFE – drugs – Pfizer may well break out to the upside and turn this rising wedge into a running triangle with a first major target of 30 – 30.50; but for the time being the rise on declining voluem feels a little creepy and I am watching for an opportunity to short it. Note the daily chart – we know where it must hold above here:
PFE – daily
Special Situations
Today’s low priced speculative pick – LU. Nortel might also be stalked for a trade; LU might even be worth holding.
05.05.11 22:56 #