ICE ICE Baby!

Okay guys so tomorrow is the big day and I'll work on getting some brief comments on where we should be looking at going after the GDP and the FED announcement. The only other big event this week is Friday's unemployment numbers...

With that said here's a chart to tide you over:

ICE:
Okay so that is the chart for ICE what needs to be mentioned is the teal trendline that was broken earlier this year. Furthermore it looks to me like a H&S top has formed with the correct volume pattern (decreasing). Now all that needs to happen is a break through the neckline at 110 and this chart is in business.

Other things in the chart the MACD has not violated it's downward trend and neither has the RSI as it has bounced right off the downward trendline.

As far as price targets and stops go:

Short at around 155
Stop at around 165.
Take partial profits at the neckline at 110.00 and take full profits at around 80 (although this pattern could go all the way down to 60!!!

That is all until tomorrow good night!

My database has been created and over the next day or 2 I'll start doing my analysis

The thing that I'm kind of waiting on is Wednesday because of the GDP report. This is going to set the tone as to which way that this market is going to move and pretty much everyone is waiting on this report to see which side of the fence to lie on.

So There probably won't be any charts until after tomorrow's report!!

Light Posting

Light posting will be happening for the next few days as I am building a data-base so that I can cover my stocks in less time.

Eventually I hope to be posting once a day about what is going on.

Beat the Street Picks:

Okay guys here are my BTS picks for this week. Keep in mind I picked extremely volatile stocks because to win this contest the gains for all 5 stocks have to be around 20%. With that said here are the picks:

HAL Short: Again Hal is at it's 52 week high. RSI is at 85% so there really cannot be that many more people to take the stock higher. Furthermore their earnings come out on Monday and SLB missed their earnings for this past quarter so I look for HAL to do the same and to give back these monster gains (and they are due for a pullback anyways).

BIDU Short: I feel that Bidu had a huge play off of Google's earnings and I feel that they will have a big fall off (10% on friday) plus nearing some gap resistance at 340.

Goog Long: After google's strong earnings on Friday I feel like they will continue to go up.

Citi Short: Citi up HUGE on Friday I don't see how with their huge write-off's..

CF Short: Again at 52 week high high RSI needing a pullback..

Let's see how I do..

The Dow for next week Technicals

Okay guys here's the chart for next week as promised..:
Okay so I know a bunch of lines are on this graph.. So let's take a look at them. The blue trendline is the long term trendline and as can be seen has not been violated as it is at about 12,000. Then there is the H&S top pattern that is shown in Purple and it looks to me like that pattern is very suspect so I think I'm just going to discard that pattern. Then there are the green lines. The green lines are support (12,750) and resistance (13,000). If the bulls don't take it above 13,000 this week I will guarantee that the support at 12,750 will not hold and we'll go back down. Finally there is the Orange trendline which is the short term downtrend that we are currently in which goes from the head to the shoulder and then touches this most recent top. We need to break out of this trendline if the market is going to be going higher.

Onto the other idicators: The MACD has just crossed and the MACD histogram has come into bullish territory. The ADX DI- has gone down and is getting closer to the DI+ but has not crossed over yet. Furthermore it looks as if the ADX trendline might be coming down which would be bad for the bears. Finally the RSI looks like it is about to bounce off of the trendline formed from the head.

All in all this next week will again depend on the earnings announcements but technically it still looks like we need to go lower, base for a bit, form a bottom and then break out. Close on the week above 13k is bullish and below 12.75 is bearish.

Looking back at the week

IBM:
Had very strong earnings and thus had a nice pop today past the 120 barrier up to about 123.72. Look for it to continue to push higher and then pull back to about 120 (support) and buy on this dip and then sell at where the last peak was...

Should make for a good few percent.. again have a stop below the support at 120.

AMX:
Like I said it was a busted inverted H&S that failed a bullish breakout... Here's the chart:
Now like I said before because it did close below the neckline the inverted H&S is suspect but let's look at everything else.

First: The ADX trendline has pretty much stayed flat throughout this course although the + DI has gone up from the crossover. The MACD histogram just passed over the 0 line (buy signal) and the RSI has shown a positive divergence.

Second: The volume though has been puny and this "breakout" again above the neckline might not hold (again).

A few more notes on this chart: The low of the previous day and this day pretty much sit at the neckline (bullish) although today's was almost a hanging man formation... (bearish). Furthermore since mid January AMX has formed a series of higher highs and lower lows (blue trendline) so even if it does fall it will either stop at the neckline or the trendline probably at 63. Finally the Parabolic SAR has moved below the price so that's also bullish.

All in all it looks like AMX will probably go higher for a bit, then re-test that neckline.

VPHM:
Had some horrible fundamental news come out (again ugh I can't help that guys). Basically one of their promising drugs (I think it was in stage 2 of trials) had to be pulled because of health concerns for it's patients (for hep C). Now FUNDAMENTALLY they aren't as good of a play since they lost one of their pipeline drugs but they still do have tons of cash on hand and could (and probably should) now purchase either a company or a pipeline drug to boost up their pipeline but we shall see. Again this is a technical blog so let's check things out:
So technically the stock hasn't really changed all that much and the nice thing is that the 50 week MA and the 10 week MA will eventually cross over and that will be a very good day for the bulls. Furthermore the really nice thing (see the circle) is that the low of the week has stopped right at the 10 week MA. Now then going to the day chart it looks like VPHM still has a bit of a downward slope to go through so I'd like to revise my buying to around the trendline mark at about 8.3.

HAL:
It finally looks like HAL might take a pullback very very soon. Here's the chart:
As can be seen the RSI is greatly into oversold territory and the MACD histogram looks like it has peaked and has started a negative divergence back to the baseline. So right now isn't the right time to buy but I'd say give Hal a day or 2 and we might be seeing a nice pullback to the neckline.

So again wait and see on this bad boy to make sure that the MACD is going down and that the RSI will start to also go negative (and ya know for Hal to actually *dare I say it* have a negative day!).

SLB:
Another Oil Services play. From the weeklies it looks like SLB could still be going up. The MACD just crossed into bullish territory, the LOD was right at the 50 week MA and the 10 week MA is about to cross the 50 week MA. RSI is going postive and the Parabolic SAR is below the price. Now onto the daily chart:

Now the interesting things about the chart is let's look back at the H&S pattern. To determine the move after the breakthrough and your "rough target" it is the height of the head from the neckline (in this case about 20 pts) taken down from the breakthrough point which is coincidentally enough right at 20 pts. Wow the magic of TA.

Anyways again the volume breaking through the neckline isn't that great so that is rather worrisome for the bulls but the ADX trendine is pointing up and their is a good spread between the +/- DI. Furthermore the MACD was showing a negative divergence but then stopped and picked up a bit and then leveled off. (which looks like it might continue to go negative). The Rising wedge pattern i pointed out from last time (left here for illustrations sake) was broken on the upside so that pattern is suspect. But from right here tomorrow I feel that SLB is going to have a down day for the next couple of days. Why you might ask with all of these "happy things" in TA land..

Well:

OIH set a new high today right at about 200 (a nice round number) and also formed a hammer on the daily graph. And a hammer is a very good sign of a top (at least for a few days and a nice pick for a little pullback). Now if you look at SLB you will notice an even more pronounced hammer. So IMO SLB will probably make a pullback for the next 2-3 days back into about the 85-90 range and would be a good place to pick up some cheap shares.

Indu:
I'm going to wait to form my analysis of the Industrial Average until tomorrow but IMO it looks like we could finally break that resistance at 12,750. because I really doubt that tomorrow is going to be a down day and it does look like the INDU has formed a series of higher low's. Who knows though maybe we'll just trade in this thousand point range for a while...

CF:
Now CF was something I didn't put a lot of thought into but I've noticed some trends and this is extremely speculative and this baby really hasn't shown any technical forms to show it's at a top but like I said I think it's running out of steam. The chart:

Okay so the first things to notice is the last move was about a 50 pt move and then a pullback to about the 38% fib level. Then another 50 pt move and now hopefully a pullback to the 38% fib level (i'd personally say to take profits at 132 (which about a good 12% no reason to get greedy and try to go down to the fib at about 120 especially in a stock in an uptrend like this one with higher highs and lower lows.) Now the positive things as to why this is going lower. If you look at the Histo it looks like it's formed a top and it started forming a negative divergence back to zero. Also the RSI is into over-sold territory and the Parabolic Sar (circle) looks to be catching up to the price and might get to it as early as tomorrow or maybe the day after. It will all depend on what tomorrow holds. If it's a nice big down day with a big red candle it should be all systems go back to the fib level. Then buy back at the 38% fib level and go long for another 50 pts!

That's about it for everything that I've mentioned recently. An update tomorrow on securities that look good for next week (hopefully CF, maybe CPST, maybe HAL, maybe CEPH, or even FSLR). Let's just see how the rest of the week unfolds.

Beat the Street

I am going to start playing beat the street. I'll be giving you my picks here every weekend and then following up with them throughout the week.

We'll see how things go! A post will be made about this week, an update on how the old stocks look, and hopefully a new post on some great plays for next week!

Remember guys you can be wrong. I was wrong on IBM fundamentals always trump technicals and their earnings bit me in the ass. But keep in mind that is why we have stop losses and mine was at 20.5 and I think it would have been exercised before the close.

Tuesday (A bit late)

It looks as if CF has finally run out of steam. RSI has made lower highs. The ADX is the thing that I just recently read about so I'm going to use it here. In a trending market/security the ADX should be above 40 but when it is about to stop it's trend it passes below 40 (as CF has done).

My guess is that they will push for 150 hit resistance and then fall back...

Almost bought a PUT on IBM today but didn't have my option account info filled out

I would have bought contracts for MAY 2008 puts strike price @ 120 with a price of $5.60. We'll see how I'll do... I'll keep you posted

Next Week Revisiting Some Old Plays:

AMX:

As I said before AMX looks like a good short (read the old post) and so far hasn't changed all too much from where I recommended it. The interesting thing is that the technicals have changed all too much but they have become more bearish so here's the new chart:


Obviously the broken H&S and it's neckline are still here. The intresting things that have changed since the last update is that the MACD has crossed into negative territory (as indicated by the dark green circle) (bearish sign) and so too have the ADX (Also bearish). Furthermore I feel that there is the dark green trendline underneath from the lows and another trendline near the top (which oddly enough forms a rising wedge). The RSI has continued to go negative and is at the midpoint. Obviously I still feel that this is a great short opportunity so:

Short above 62.5, cover at the orange line at about 56.2 and your stop loss should be at about 65.

But with this rising wedge I feel that it will break the bottom of the rising wedge this week and trade down to about 56.

VPHM:

Because of the huge movement down of the market on Friday obviously VPHM has been taken with it. Like I said I liked it to be bought around 9.20 where the 50 day MA is. The chart really hasn't changed all that much just like I said needed to test the support and then will hopefully come back up and finally break that resistance at 10.

HAL:

Has cooperated nicely and has broken that neckline and then blew by the resistance at 42. The MACD has went pretty high and most of the oscillators have pointed toward it being oversold but the trend is our friend. So:

Wait for a pullback and buy HAL at about 42.2

Buy:42.2
Stop Loss: 41.8
Profit take 43.9

We'll see if it keeps going up but I doubt it. HAL needs to pull back a bit and test that resistance IMO

Next Week some (NEW) Ideas

So again my view on the market hasn't changed but with all of the earnings etc coming out in the coming weeks the market could go either way but with that said I still think that we head lower and tests the lows from March. (11,750)

Here are the stocks I like coming out of the weekend for this week:

SLB:
here's the chart:

As can be seen from this chart SLB had a steady trendline heading upward since 2006 as indicated by the blue trendline. At the start of the new year though SLB broke that trendline on heavy volume (weeklies). The chart kind of looks like a H&S top as evidenced by this daily chart I annotated:

Now the interesting thing here is look at the neckline right at about 93.5 which is now resistance and SLB couldn't plow through it. So on the daily it looks as if we will be going lower because the MACD averages are coming together and have formed a top (to the right of the teal circle). So to me short term I'm thinking that we will be going back down to about the 85.00 region so here might be a smart short with a stop at about 93.1. It also looks to form a rising wedge pattern?

But on the weeklies I definitely form a different opinion long-term. It looks like we've formed a nice price channel (as evidenced by the purple trendlines). Furthermore the RSI, MACD are both making positive divergences from the lows with the histogram going positive for the first time as shown by the teal circle. Also the ADX has crossed (as evidenced by the teal circle) and the trendline has gone back to the "no-trend" position.

The very interesting thing here is this:

That the 50 week MA was crossed this past week and should now be a support level at 90.00.

So to break things down:
Closes about the neckline (Bullish) at about 93, buy, with Stop Loss at: 92.5 and profit taking at 100
Closes below support and the MA at 90.00 (bearish) sell with stop loss at 90.5 and profit taking at 85.
I'm also bullish near the purple trendline (currently about 83) so if it gets down there buy with a stop closing 2 days below the trendline (probably with a stop at about... 80) and a profit taking at the top of the channel probably near the most recent top at about 94.

Long term I'm not too sure which way this one is going to go and I'm going to reserve judgement for a week so that we can figure out which way SLB will be going. It could either stay below the neckline in which case it's probably going to continue going lower but if it breaks it then obviously going higher.

IBM:

IBM has earnings on Wednesday so it's always tough to predict earnings, but I'm fairly confident that IBM will miss earnings because let's face it if GE missed earnings IBM probably will too but because that whole fundamental focus thing let's look at the chart:

So as can be noticed the MACD histogram has topped off and has started making a bearish divergence back toward the 0 line. Furthermore, the RSI has again formed a negative divergence since forming the top in October of last year which I feel has formed a Double Top this past week (as evidenced by the two purple arrows). Now let's look at the resistance and support:

First support looks to be pretty firm at 100 and tested it numerous times. Resistance is obviously at the highs of about 120. During the first peak (purple arrow 1) the chart passed through the more severe trendline (blue) and then passed down to the less steep trendline (pink). Then the chart bounced back up to from the second peak to form the double top.

Sell >117
Stop loss @ 121
Cover @ 101

This pattern if it does break through the pink trendline could probably go back down to about 80 so that is the new price target if that trendline is broken.

Next Week 4.14.08 for the Dow:

The market traded mostly sideways this week until the big jump down on Friday due to GE's missing it's target EPS by .07. This sent the whole market into a tizzy because GE is a bellwether for the economy because it is so diversified and has it's hand in so many different facets of the economy. GE also had it's largest drop since 1987 (14% on the day).

Now why this is significant: (Fundamentally)This has now I think been the final "Nail in the coffin" so to speak for the bulls. I think that they will be very wary to push that hard and I feel that any negative news/earnings from any of the big players will have huge implications on the market, although now everyone will also have their expectations lower.

Now onto the technicals, here's the chart:


So again from last week I mentioned that in 07 the Dow had formed a H&S top formation with the neckline shown in blue (currently crossing at 12,500). The nice thing about this neckline is that we finished again this week below the neckline thus keeping the H&S intact. The levels of support and resistance are shown in orange with resistance at 12,750 and support at 11,750. Furthermore in purple a trendline could be drawn from the lower lows (and the neckline shows the lower highs). The RSI has still shown negative divergencies.

The ADX has shown that the chart is still trending but that the - has shown some bullish convergence with the +. but formed a bearish cross in mid December of last year (as shown in the circle). The MACD has just had a bullish cross near the oversold area but probably will not go very high because of the big red candle we formed today.

Where we go from here:

It still looks as if we still have to retest 11,750 and frankly from a fundamental point of view I don't see how we don't go lower and how we will get past 12,750 in the near-term.

Look to re-test 11,750 and if it holds and see if we can re-test 12,750. If 11,750 doesn't hold we could be in for a longer "bottom" then what a lot of the talking heads think

Thursday Analysis:

Dow:
The dow has still stayed below the neckline so the h&S pattern is still intact. Again it looks like we should finish down for the week and should finish below 12,500.

Short:
Everybody has been pumping up AMX as it is the majority player in Latin America but from a technical analysis perspective it looks like they may be taking a bit of a break. Here's the chart:
As can be seen they did form an inverted H&S pattern and then broke-out on higher volume but here is the thing they broke the neckline and whenever that happens the pattern is suspect. Also as can be seen the OBV has been trending lower since Februrary and the RSI since April. Should get back down to about 56.00

Long: HAL, VPHM

HAL: First again lets look at HAL: as I said in yesterday's post HAL had formed an inverted H&S and everything looked good but there was that huge resistance barrier at 42. Well HAL broke it yesterday but not on that great of volume and today is up another 2% as I post this. Look for HAL to come down from these highs to test the 42 line and buy here at this opportunity.

VPHM: Has been a stock I've followed now for several years since their run in with the FDA and the FDA wanting to allow generics to come to market sooner which subsequently dropped their stock a good 50% in a day and since then has been languishing in the single digits after being in the 20's and teens. Here's the chart and why I like it now:

So on first glance we see that there is a lot of resistance at 10.00 which is obviously a big round number. But what we see from the chart is that an ascending triangle has been forming since August. Also the other thing confirming the triangle is that the volume has been dropping ever since the start of the Triangle in August which is a sign that a Triangle has formed. Furthermore, we see on this weekly chart that the RSI has been increasing since the big drop and has just passed over the 50 mark. Also, the MACD is just about to go positive and has shown positive divergences since August. Finally as can be noticed is that the ADX has finally crossed over and is not to be trending which is a good thing since the last trend was a downtrend. There is one bad thing about the chart the 10 week moving average is right at 9.00 and should provide support but the 50 week ma is at 10.50 right now and will bring added resistance at 10.50 so if it does break out at 10 it might be in a very small trading range for a month or 2 until it either breaks the 50 week MA or breaks the support at 10.00.

From the looks of things it looks as if VPHM will be breaking out sometime this month there are a few options for this type of play:

A: Buy on weakness near the lows of 9.00 and ride it up to the resistance at 10.

B: Buy on weakness near the lows of 9.00 and wait it out and see if it will pass the resistance at 10.

C: Wait until it shows a positive break-out with increasing volume and then wait for the pullback to test the new line of support at 10.00 and then buy there and ride it up.

Wednesday Analysis

The market didn't really change that much yesterday so the Tuesday analysis is still in place which either way it goes will have large implications on securities in general

HAL while I have been Bearish about Halliburton in the past week I think that I have actually changed my tune a little bit here. Here's the chart:

So as can be seen the OBV has been trending up the whole time for over a year and a half which is tending toward a bullish breakout. Furthermore the MACD just turned positive over the zero line and still has a ways to go so that it can really become bullish. Also, the RSI has gotten close to becoming oversold but it hasn't pushed over the 70 mark yet so it obviously has some up leg to go.

Again though there still seems to be a lot of resistance at 42. My guess is that it will bounce off of the resistance and then fall back down to the neckline of this inverted head and shoulders pattern (that I feel is kind of weak because of the volume as the volume on the downlegs should have decreased with each trough). If the neckline stays in tact and HAL doesn't close below 40 then that would be a great buying point if it does close below 40 then all bets are off and I think that it'll be going lower.

Tuesday Market Analysis:

I was on vacation in Ann Arbor this weekend visiting friends so when I got back on Sunday I didn't have much time to do an analysis so here is the analysis for the week:

As can be seen the OBV has had a very positive trend since 06 accompaning the uptrend. As can be seen recently there were 3 peaks one in July of 07, one in October of 07 and one finally in December (all with purple arrows). To me this looks like a classic head and shoulders pattern with the neckline being the Yellow line sloping downward. It looks like a head and shoulders because of the 2 shoulders that have lower peaks and a head that has a higher peak all of which were formed on lower volume throughout the formation from shoulder->head->shoulder. The problem is that the neckline is coming dangerously close to being penetrated this week but since the close did not happen above the neckline the pattern is still intact. Furthermore it looks like we are in a rectangle pattern with the low trendine at around 11,750 with the upper trendline at 12,750.

The one thing that the bulls have going for them is that where the stocks have paused is right at the 38% fibonnaci ratio which is the farthest a retracement will go to. Furthermore the rectangle has been filled with ligher volume since the penetration of the neckline. Finally the ADX has also started trending significantly lower and if it continues on this trend will cross and will turn bullish.

All in all the theme is this:

1. Pass through the neckline and then 12,750 and we'll be going higher. And the next stop would be 14,000.

2. Stay below the neckline and we'll probably be going lower pushing through the 11,750 barrier on heavier volume. If the 11,750 barrier is broken it looks as if the next level of support is at 10,700 which would be another 10% of a loss for the market and a really horrible start for the 08 year (except for you bears).

Tomorrow will be a really important day and I might update the chart depending on what happens tomorrow...

Friday:

Okay guys so the jobs report comes out tomorrow and let's be realistic it's probably not going to be good. But everyone is expecting it to be bad so what will happen tomorrow.

The Dow is at 12626 with HUGE resistance at 12,750. I think that we will continue to trade sideways for the for-see-able future (into next week) between 12,750 and 11,800.

Probably a good bet would be to either get puts on the dow or to go short on some ETF's. The huge problem that I see is that when the DOW closed below 12,750 the volume was huge. In those 5 down days the dow traded about 5b and was averaging (obviously) about 1b shares a day and since then it's been about 750m and even on that 400 pt day this week the volume wasn't that large to get us back up there.

Furthermore the Fast Stochastics crossed (a bearish sign), along with the RSI starting to decline from about the 60 mark. Also the Chaiken Money Flow (an accumulation/distribution signal) has a divergence (again bearish).

Either way tomorrow really hinges on the jobs report! More tomorrow when I woke up after the Jobs report!

A great real life example:

So one of my picks last week was Urban Outfitters URBN. Here is the graph:

As can be seen from this graph it looks as if for most of March the trading range is in an ascending price channel as indicated by the green lines on the chart with higher highs and higher lows. Highlighted in pink is the low of the day when I gave the recommendation. As can be seen it is very near to the 50 day Moving Average and just sits on top of it. The orange circle is the base of the candlestick which formed a hammer which near the bottom of a valley is a bullish indicator. Furthermore as an be seen from the MACD lines they show positive divergences along with the fast stochastics also showing a trend at crossing (as they crossed over the next day).

All in all these are the reasons as to why this was a great pick for that day and the subsequent days for the 10% run-up.

After this URBN will probably come down as it formed a spinning top near the upper bollinger band, come down to the support at 31.5 and then continue to go higher depending on the retail market in general.

Thursday Pick:

It looks as if the market will be heading lower on Thursday and with that being said I have a few stocks that I feel will also be heading lower.

Citi (C) closed below the 50 day moving average and is also at the top of the bollinger band. Furthermore it also formed a doji which in this place probably signals a reversal. Also it is near resistance at 25.00.

Short above: 24.0
Cover @ 24.24
Profit take @ 23.52 or end of day
Equitable Group Inc (ETC.TO) if they can cross the resistance

Intel (INTC) also looks like an attractive short as it formed a hanging man formation and closed near previous resistance at 22.00. Also it is near the upper bollinger bands:

Short above: 21.9
Cover @22.12
Profit take @21.46 or end of day

Wednesday Short:

Very light blogging today as I had to drive home for 15 hours yesterday:

My pony today is again my best friend Halliburton:

Short:
HAL

Short Limit: 39.5
Stop Loss: 40.1
Profit Take: 38.71 or close

Also looking at the chart for the Dow Jones obviously after yesterday's huge day the market will probably be down today for the following reasons:

1. It is near the top of the bollinger bands
2. It is nearing the HUGGE resistance at 12,800

If it can pass through the resistance and form a base for a few days then we might be seeing the start of an uptrend but my guess is that we'll be trading sideways.