Let's update our picks from Friday.
Even though we were stopped out on XILINX on Thursday, it did end up hitting the first downside target on Friday. I noticed that a lot of stocks did a big "thud" last week, even though investors and the media didn't seem to notice.
Last week, we stalked NEWMONT MINING on the short side and then showed you why it was also a long scalp on a swing trade basis. It's a pullback in an uptrend on the daily chart, and the upside target for the buyers is a test of the December 2 swing high of $50.28 where we know sellers came out before. Now, on this test of top, we will also see if they can take it past overhead resistance or not, and if they can't short sellers will be waiting below Friday's low, ready to sell it in case a much bigger retracement pattern such as the two-swing classic bull flag or an ABC Correction to the 20-day EMA below develops.
Alot of the pharmaceutical stocks have been selling off for what seems to be ages, and some of them might offer a surprise to the upside, if only on shortcovering. For example, MERCK has bounced to the 20-day EMA overhead and sellers are trying to push it down again. If they cannot, then we should be able to get a one or two-day shortcovering rally, and we can participate in that with a buy alert placed at Friday's high of $43.55. The usual plan is to wait a few minutes after it hits the alert price, and then go in and buy a small size position of DECEMBER 42.50 CALLS with an initial stop loss at $42.71.
We're basically looking for a one-day short covering blast similar to that seen on MEDIMMUNE.
In the "in case of upside surprise" department, we can position at Friday's high on ORACLE in case it can reverse and move up above the $12.90 level, but I think I'd scalp this on a 15-minute intraday basis.
That's it for today.
03.12.08 09:06 #