On Monday I wrote about the compression of the Multiple Moving Averages (MMAs) on the Nasdaq. SImilar to the range expansion theory that predicts a big movement in price (but not direction). Well, I think we’ve got our move. You can see that the short-term group of MMAs has now push through the long-term group and is chasing price lower. The compression of the short-term group is no more and the long-term group will likely follow suit.

Here’s another shot of the Nasdaq chart:

The QQQQ chart shows that large cap tech has really been sucking wind of late. I’ll be watching for a rally attempt at the July intraday low but I suspect that the S&P and/or Nasdaq touching their July lows will be what triggers a serious rally attempt.

The SOX tells the same story with its new 5-year low:

The S&P seems destined for a retest of 1200.

Here are the ETFs that I’ll be watching for shorting opportunites if we get more selling in the coming days — IWM, XLF and XHB. (Others include RKH, ICF, IYR and XLY)

Once again the “downs” are dominating the chart.

Post from: Trader Mike's Blog

September 4, 2008 Recap: Not Yet Oversold

ShareThis

Note: Whenever I post swing trade candidates I always get asked if I’ve gone back to swing trading. I have not. I’m just posting these b/c I know many of you swing trade. I may day trade some of these if & when they trigger though. I still like to run my scans just to get a better feel for market.

Post from: Trader Mike's Blog

5 Charts to Watch

ShareThis

It’s starting to feel like a real stalemate right here. The bulls are so close to a solid move over these moving averages but there’s just no volume. The volume that does show up intraday seems tends to be on these late day selloffs, yet the bears can’t do much damage on the longer-term charts. It’ll be interesting to see if the “sell in May” trade begins to take place ahead of the Memorial Day weekend. If so, the 200 DMAs would be the perfect places for the indices to peak.

The action in some of the momentum stocks was pretty wild today. Many of the solar plays look like they had blow-off tops today. For example, here’s China Sunergy Co., Ltd. (CSUN):

The index charts are below:

I’m bumping the S&P’s long term trend to lateral since it’s right on its 200 DMA.

Post from: Trader Mike's Blog

May 19, 2008 Stock Market Recap

ShareThis

On Today’s Calendar:

• 10:30 — Crude Inventories
• 2:00 — Fed’s Beige Book

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

It’s hard to find many stocks that don’t have an earnings report due in the next few days but here are a few that caught my eye: Intel Corporation
(INTC), National Semiconductor Corporation (NSM), IKON Office Solutions, Inc. (IKN) and Aftermarket Technology Corp. (ATAC):

See one of the recent ‘Chart Reading‘ posts for some potential swing candidates. Also be sure to check my typical swing trade entry & exit rules.

Potential day trades:

(From Briefing.com)

Gapping Down

In reaction to weak earnings/guidance: EWBC -17.4% (also downgraded to Sector Perform at RBC), HCSG -14.2%, OSCI -11.7% (very light volume), HBAN -6.5% (also announces offering of $500 mln of convertible preferred stock and cuts dividend by 50%), TMS -5.2%, HNP -3.7% (power generation increases 18.62% in the first quarter), EDU -3.6%, PJC -3.5%, STX -3.0%, MBT -2.6%, BLK -2.5%… Other news: FTE -5.6% (considering bid for TeliaSonera, according to source - DJ), AINV -3.7% (Friedman Billings says credit risk and the lack of catalysts cause firm to move to the sidelines)… Analyst downgrades: SMI -8.3% (downgraded to Underweight at HSBC), LSI -3.7% (downgraded to Neutral at Merrill), SLM -2.3% (downgraded to Underweight at Morgan Stanley), MO -1.0% (downgraded to Neutral and removed from Focus List at JPMorgan).

Gapping Up

In reaction to strong earnings/guidance: SORC +24.1%, BMI +17.6%, INTC +7.6%, ZOLT +6.4%, WFC +5.2%, JCI +4.2%, CSX +3.0%, WWW +3.0%, STJ +2.9%, CPSS +2.7%, JPM +2.3%, LUFK +2.1%, ABT +2.0%, LLTC +1.8%, KO +1.3%, ASML +1.2%, ADS +1.0%… Select agriculture names showing strength: FEED +8.3% (announces that they have entered into agreements to acquire majority ownership of several commercial hog farms located in south China provinces), AGU +3.2%, POT +3.0%, MOS +2.9%, CF +2.2%, TRA +1.1%, SYT +1.1%… Select semiconductor stocks trading higher following INTC earnings and guidance: MU +3.6%, NSM +3.3%, MRVL +2.4%, TXN +2.3%, ADI +1.9%, MSCC +1.1%… Select financials showing strength following JPM and WFC earnings results: C +2.2%, BAC +2.0%, LEH +1.7%, WB +1.2%, GS +1.0%… Other news: POZN +40.3% (Treximet tablets approved by FDA for acute treatment of migraine), CVTX +18.3% (announces that TPG-Axon Capital has agreed to pay CVTX up to $185 mln in exchange for rights to 50% of their royalty on North American sales of Lexiscan injection), MXWL +13.3% (Johnson Controls-Saft and Maxwell Technologies to collaborate in development of more effective, more energy efficient electrodes for lithium-ion hybrid vehicle batteries), AMG +4.3% (will replace GRP in the S&P MidCap 400 after the close on 4/21), NOK +3.7% (still checking), BCS +3.6% ( ‘wide open’ to new mortgage business - Financial Times), GERN +3.0% (announces new data on activity of GRN163L in breast cancer cells), AOB +2.9% (enters strategic alliance with China-based pharma company), NOV +1.6% (will replace ROK in the S&P 100 after the close on 4/21), RIMM +1.6% (still checking), RTP +1.2% (coal, copper output drops, adds to supply concern - Bloomberg.com), ERIC +1.2% (still checking)… Analyst upgrades: MOV +5.4% (upgraded to Buy at Morgan Joseph), ELN +4.4% (upgraded to Buy at tier 1 firm), TSL +2.7% (upgraded to Mkt Perform at Friedman Billings), ADTN +2.5% (upgraded to Overweight at Weisel), SID +1.1% (upgraded to Buy from Hold at Deutsche Bank).

Disclaimer & How I use this list

Post from: Trader Mike's Blog

Watchlist for April 16, 2008

ShareThis

On Today’s Calendar:

• 10:00 — Construction Spending
• 10:00 — ISM Index

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Here are a few charts that caught my eye:

PMC-Sierra, Inc. (PMCS)

Darden Restaurants, Inc. (DRI)

General Electric Company (GE) — THings can’t be that bad if GE is showing strength… can they?

J.B. Hunt Transport Services, Inc. (JBHT) — Given the slowing economy and high fuel costs I was surprised to see JBHT so strong. Another trucking company, CNW, made my scans too.

More trucks?!?! — is Ryder System, Inc. (R) benefiting from people being forced to move?

and one potential short — Suntech Power Holdings Co., Ltd. (STP)

See one of the recent ‘Chart Reading‘ posts for some potential swing candidates. Also be sure to check my typical swing trade entry & exit rules.

Potential day trades:

(From Briefing.com)

Gapping Down

In reaction to weak earnings/guidance: GBN -7.1%, BUF -6.4%, PCL -4.2%, RMG -4.1%, KRY -3.1%, TISI -3.1%, CNO -2.9%, APWR -1.0%… Select metals/mining stocks showing weakness with lower spot prices on strength in the dollar: PAL -5.3%, KGC -4.1%, HMY -3.5%, GOLD -3.1%, HL -3.0%, AU -2.8%, CDE -2.7%, ABX -2.5%, GLD -2.4%, SLV -2.4%, GFI -2.3%, MT -2.0%, RTP -1.8%, NEM -1.8% (Newmont Indonesia offers to sell 7% to govt - Reuters.com)… Other news: TMY -9.0% (terminates merger agreement), KFN -4.4% (announces proposed common share offering of 20 mln common shares; also downgraded to Peer Perform at Bear Sterns), ANR -4.0% (announces launch of capital markets transactions), YHOO -2.5% (Microsoft unlikely to raise Yahoo offer - WSJ)… Analyst downgrades: AVCT -5.3% (downgraded to Sector Perform at RBC), HPT -4.5% (downgraded to Underperform from Market Perform at Wachovia), MO -3.6% (downgraded to Equal Wt at Morgan Stanley).

Gapping Up

In reaction to strong earnings/guidance: CDS +7.6%, SPIR +4.2%, GSI +3.6%, OXM +1.3%… M&A news: CAO +18.2% (to be acquired by O’Reilly for $11.00 of O’Reilly common stock plus $1.00 in cash)… Select financial names showing strength with a number of news items out: UBS +8.1% (co releases financial update, seeks fresh capital and expects $19 bln in write-downs; chairman will depart; also upgraded to Buy at Deutsche Bank), BCS +5.0%, RBS +4.1%, LEH +3.6% (to offer 3 mln shares of convertible preferred stock; analyst commentary on offering is generally positive), WM +3.5%, WFC +3.1%, DB +2.9% (faces write-downs of about $3.95 bln), WB +2.8%, MER +1.9%, MS +1.9%, DB +1.8%, C +1.8%… Other news: TMA +35.5% (raised $1.35 bln through private placement of senior subordinated secured notes and warrants), CEGE +34.9% (Cell Genesys and Takeda announce global alliance for the development and commercialization of GVAX immunotherapy for prostate cancer), IMH +18.1% (announces the co has settled a majority of repurchase liabilities), ATN +4.9% (Cramer makes positive comments on MadMoney), VVUS +4.5% (completes special protocol assessment for Phase 3 efficacy studies and reaches agreement with FTA on the studies), NOK +3.8% (still checking), MOT +2.5% (Videocon to bid for Motorola’s global mobile business, Chairman says - DJ), SRDX +2.3% (announces first human use of SynBiosys biodegradable polymer on cardiomind drug-eluting stent), STP +2.0% (Nitol Solar and Suntech expand Polysilicon supply agreement), DELL +1.4% (undertaking a strategic assessment of ownership alternatives for its Dell Financial Services financing activities), CYTK +1.2% (announces CK-1827452 demonstrates increase in left ventricular function with no increase in myocardial oxygen consumption in canine model), BAP +1.1% (Cramer makes positive comments on MadMoney)… Analyst upgrades: HANS +4.8% (upgraded to Buy at tier 1 firm), PIR +4.5% (upgraded to Buy at Deutsche Bank and initiated with a Buy at Jesup and Lamont), BWLD +4.1% (upgraded to Outperform at Keefe Bruyette), AKAM +3.6% (upgraded to Buy at Piper), AZN +3.5% (upgraded to Neutral at JPMorgan), ANSS +3.0% (upgraded to Buy at Jefferies), ATHR +2.8% (upgraded to Overwt at Weisel), VMW +2.8% (upgraded to Outperform at Wachovia), WBD +2.6% (upgraded to Buy at Merrill), ADBE +1.6% (added to Alpha List at Piper Jaffray), AAPL +1.5% (reinstated with Buy at Merrill), BG +1.3% (upgraded to Outperform at BMO).

Disclaimer & How I use this list

Post from: Trader Mike's Blog

Watchlist for April 1, 2008

ShareThis

Given how much angst there was over the Bear Stearns fallout I think the bulls have to be happy with how little damage was done to the indices today. The S&P managed to close above that important 1270 level. But, like I said yesterday, we’re still left very close to that critical technical level with the reaction to the Fed decision likely to make or break that 1270 support.

Despite all the focus on financials today the Nasdaq, which isn’t financial-laden, got hit worse than the S&P. A look under the covers of the Nasdaq-100 shows where the selling took place: FMCN (Chinese advertising) - 27%, APOL -10%, FWLT (Construction in the energy space) -10%, BIDU -8%, UAUA -8%, GENZ & VRTX (bio-wrecks) -5%, ADBE -5.6%, GOOG -4%…

The action in many commodities was toppy today as well. DBA, which is composed of Corn, Wheat, Soybeans and Sugar is working on a double top. It just needs to close beneath the March 10th low, which is 31 cents away, to confirm a double top. Note the bearish divergences in On-Balance Volume and stochastic:

And oil broke its 6-week uptrend today:

no changes

Post from: Trader Mike's Blog

March 17, 2008 Stock Market Recap

ShareThis

DocDan requested a chart of Chesapeake Energy Corporation (CHK). The stock has just shot up about 205 to new all-time highs. The stock is showing a lot of strength but is also extended. A pullback or consolidation would be healthy as long as the stock doesn’t retrace much more than 50% of it’s move above $41. So if I was already long CHK I’d get a little nervous if it sank into the 42’s. On the other hand, if I wanted to initiate a long position I might consider a price in the 42’s a gift. But I’d have a hard time buying it here because the risk:reward doesn’t look very good to me — I see no good place to put a stop and there’s potential resistance just over $45.

No changes

Post from: Trader Mike's Blog

February 22, 2008 Stock Market Recap

ShareThis

Signs of a recession. Both the 41.9 business activity reading and the 44.6 summary number represent the second lowest growth figures on record, trailing only the October 2001 reading after the Sept. 11 attacks. It’s a sign that the service sector - which has carried the economy through a downturn in manufacturing - has followed that troubled sector into decline.

The enormous drop in business activity has intensified some economists’ fears.

“We don’t have plunges like this unless we’re coming into or [are] in a recession,” said Sam Bullard, economist at Wachovia. “Until we see two consecutive monthly declines, it’s hard to definitively say we’re in a recession, but these numbers make you think.”

The service sector encompasses the retail, transportation and health care sectors. It also includes sectors that have been hit hard by problems in the economy, including finance, real estate and construction.

“The service sector is a much larger component of the economy [than manufacturing], and this is very much a recession reading,” said Keith Hembre, chief economist for First American Funds, who now believes the U.S. economy has fallen into recession.

The selling caused the charts to do what I said I was expecting — the short-term uptrends ran into the headwinds of the longer term trends and got turned around. Given the 3% selloffs in the indices I was surprised that volume higher today. I’m not reading too much into that though — 3% down is enough to convince me that this was a very bad day.

The Nasdaq had a smaller percentage loss than the S&P 500 today but its chart looks worse to me. It looks ready to retest the lows set on Jan. 22^nd and 23^rd.

There’s still hope for support on the S&P at 1,322 which is the low from January 28.

James asked for a chart of iShares FTSE/Xinhua China 25 Index (FXI). It’s trying hard to hang around its 200-day moving average and hold on to its late summer breakout to new highs. If I were trading this I’d be working the downward sloping blue channel — buy near the bottom and sell near the top and repeat until it stops working.

Everything is down again.

Post from: Trader Mike's Blog

February 5, 2008 Stock Market Recap

ShareThis

On Today’s Calendar:

• 2:15 — FOMC Policy Statement

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

See one of the recent ‘Chart Reading‘ posts for some potential swing candidates. Also be sure to check my typical swing trade entry & exit rules.

Here are some charts that caught my eye when flipping through my scans:

Motorola-Inc.-(MOT)

Electronic Arts Inc. (ERTS) — This would be a counter-trend trade, which isn’t my thing.

CBS Corporation (CBS)

The Dow Chemical Company (DOW)

Illumina, Inc. (ILMN)

Other charts on my radar are APD, MTW, TDW, BUCY, RDN, TUP, HSC AND NUAN

Potential day trades:

(From Briefing.com)

Gapping Down

In reaction to weak earnings/guidance: CLZR -21.6%, ALGN -20.7%, CYMI -19.3% (also downgraded to Hold at Brean Murray), HTCH -18.7% (also downgraded to Sell at Brean Murray), NATI -12.1% (also downgraded to Sell at Citigroup), CAB -11.5% (also downgraded to Mkt Perform at Wachovia), YHOO -10.0% (also downgraded to Hold at Citigroup, downgraded to Perform at Oppenheimer), BHI -6.0%, FDRY -5.5%, CTX -4.6% (also downgraded to Neutral at UBS), SLGN -3.7%, ADVNB -3.6%, MRK -3.2%, ITW -3.2%, HIFN -3.2%, AGN -3.1%, TRMB -2.3%, SAP -1.7%, WWW -1.6%, UPS -1.3%, BA -1.2%… Select Chinese names trading lower with weakness in overseas trading: LFC -5.8%, PTR -4.3%, CHL -4.0%, ACH -3.7%… Other news: HWAY -14.1% (Credit Suisse says would not be surprised to see stock settle in the low to mid $50s over the near term), RBS -2.8% (down in sympathy with UBS), ABK -2.6% (declares dividend of $0.07 per share, down from last qtr’s dividend of $0.21), UBS -2.4% (to post record full-year loss on further mortgage write-downs), HK -1.2% (announces 18 mln share offering priced at $15 per share), SU -1.2% (Alberta says reaches royalty agreement with SU; says SU to pay 20% more royalties under new deal, talks continue - Reuters)… Analyst downgrades: COLM -4.2% (downgraded to Neutral at JPMorgan), S -3.5 (tgt lowered at Deutsche Bank), SMG -3.5% (downgraded to Neutral at JPMorgan), MER -1.9% (downgraded to Underperform at Oppenheimer), CNX -1.4% (downgraded to Outperform from Strong Buy at Raymond James), HAFC -1.1% (downgraded to Underperform at Oppenheimer).

Gapping Up

In reaction to strong earnings/guidance: PXLW +25.0% (also announces “Modified Dutch Auction” tender offer for up to $50 million principal amount of its convertible debt securities), SLAB +11.9%, TUP +10.9%, HLIT +9.2%, WBSN +8.2%, BBOX +7.8%, CYBS +7.1%, EGLT +7.0% (also upgraded to Buy at Broadpoint), RHI +6.3%, FTD +6.3%, JBHT +6.1%, DSPG +4.8%, DOV +4.2%, AUO +4.2%, NEXC +3.5% (also acquires the Great American Cookie Company and expects to be accretive beginning in 2008), FLEX +3.3%, CALD +3.1%, RCL +2.8%, CSGS +2.8%, EK +2.2%, NETL +2.1%, SO +1.3%… M&A news: NUCO +16.3% (signs merger agreement with affiliates of Aurora Capital Group; shareholders to receive $30/share in all-cash offer)… Select drybulk names trading higher after Baltic Dry Index surges 5.1%, largest gain in 2 years - Bloomberg: DRYS +4.1%, TBSI +3.9%, EXM +3.5%, NM +2.6%… Other news: MAGS +16.7% (receives orders of approximately $45 mln to protect critical infrastructure facilities), PEIX +7.7% (among four companies selected by US Department of Energy to research commercial cellulose technology), RMBS +6.5% (might collect royalties of as much as $10 bln by winning a seven year fight with Hynix Semiconductor- Bloomberg), ETFC +6.3% (moves higher on insider purchases), GOLD +4.3% (still checking), CROX +4.2% (still checking), BHP +1.7% and RTP +1.5% (trade higher on talks that RTP books opened to BHP - Reuters), GFI +1.3% (still checking), LEH +1.1% (increases dividend; continues common stock repurchase program)… Analyst upgrades: ZQK +4.8% (upgraded to Overweight at JPMorgan), ALB +3.2% (upgraded to Buy at UBS), CSIQ +2.6% (upgraded to Outperform at Oppenheimer), CCI +1.9% (upgraded to Outperform at Raymond James), SGMS +1.9% (upgraded to Equal Weight at Morgan Stanley), MU +1.2% (initiated with Buy at UBS), NKE +1.1% (upgraded to Overweight at JPMorgan).

Disclaimer & How I use this list

Post from: Trader Mike's Blog

Watchlist for January 30, 2008

ShareThis

Here are some more of the requested charts from yesterday. I’ll do some more tonight or tomorrow morning:

Retail was one of the better performing sectors yesterday. I guess they’ve gotten to the point where they’re getting sold out. Here’s the retail ETF, RTH:

Financials have a similar story. Here’s XLF, the Financial Sector ETF:

I think this is the first time I’ve looked at Citigroup’s chart since it’s troubles began. I was shocked at how bad the chart looked. It’s interesting to note that it bounced off of the 2002 lows yesterday.

Here’s GLD, the Gold ETF, of which I’m still long. Buy gold & head for the hills!

Here’s Solarfun Power Holdings Co., Ltd. (SOLF) — China and solar in one shot.. double your pleasure, double your fun? It’s now given back all of its breakout to new highs. There should be a lot of motivated, underwater, sellers in this now. There will be even more if it slips below the lines I’ve drawn on the chart:

Microsoft Corporation (MSFT) looks like it’s having a pretty contained & normal looking pullback.

And here’s Research In Motion Limited (RIMM). Some basing between 80 and 100 might do the stock some good.

On Today’s Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

See one of the recent ‘Chart Reading‘ posts for some potential swing candidates.

Potential day trades:

(From Briefing.com)

Gapping Down

In reaction to weak earnings/guidance: FCFS -21.9%, MOT -14.8%, ACF -13.4%, PLT -12.3% (also downgraded to Neutral at Baird), AAPL -11.3%, MOSY -11.0%, GD -10.8%, AEIS -9.3%, PKG -7.7%, HOKU -7.0%, PETM -6.7% (also downgraded to Mkt Perform at Wachovia), CNH -6.1%, FCX -5.5%, SUPX -5.5%, SLM -5.3%, WLP -4.8%, PCBK -4.3%, PX -3.6% (also initiated with Hold at Standpoint), STM -3.3%, RES -3.2%, ABT -2.6%, COP -1.9%, PHHM -1.8%, COH -1.8%, TXN -1.7% (also downgraded to Hold at Citigroup), NSC -1.5%, MKC -1.5%, WASH -1.1%… Select technology stocks showing weakness in sympathy with AAPL and MOT earnings: NOK -6.3%, SNE -6.1% , VOD -5.9% , RIMM -5.6% , GOOG -3.1% (also UBS is cautious on the quarter, but remain believers in the longer-term)… European banks under pressure with rumors of a writedown at Societe Generale: DB -5.1%, BCS -3.1%, CS -3.0%… Other news: MTG -23.4% (announces year-end 2007 delinquency inventory), DAI -6.2% (still checking), BP -4.8% (trading lower with weakness in overseas trading), SPWR -3.7% (announces triggering event for convertibility of senior convertible debentures due 2027), NCC -3.1% (announces a $1 bln convertible notes offering pursuant to an effective shelf registration statement), KO -1.3% (Suntrust may raise $1bln by selling KO shares– Bloomberg)… Analyst downgrades: PKG -9.7% (hearing removed from Conviction Buy List at tier 1 firm), BTU -6.9% (downgraded to Neutral at BofA), TNE -5.6% (added to Navellier new sell list), CDNS -3.8% (downgraded to Neutral at JPMorgan), MENT -3.8% (downgraded to Underweight at JPMorgan), ACI -2.7% (downgraded to Neutral at BofA), TRA -2.1% (added to Navellier new sell list).

Gapping Up

In reaction to strong earnings/guidance: CHKP + 4.6%, PMTC + 4.5%, BKI + 4.5%, SPSN + 3.7%, PFE + 3.0% (also buy back up to $5 bln of common stock), MBTF + 2.0%, IBKC + 1.9%, AIT + 1.9%, BANR + 1.8%, CNB + 1.7%, WAL + 1.7%, ACAT + 1.6%, DOX + 1.2% (also hearing added to Conviction Buy List at tier 1 firm)… Other news: COCO +11.3% (rebounding after yesterday’s 27% decline), SWHC +5.0% (rebounding slightly after yesterday’s decline), CYD +2.1% (announces that the Audit Committee has concluded its independent inquiry), IPCS +1.4% (announces subscriber activity for the quarter ended Dec 31, 2007; gross additions of approximately 63,800)… Analyst upgrades: CHU +1.8% (hearing upgraded to Buy at tier 1 firm), MU +1.6% (upgraded to Equal Weight at Morgan Stanley), MCHP +1.5% (hearing upgraded to Buy at tier 1 firm), LLL +1.4% (upgraded to Outperform at Friedman Billings), HTLD +1.1% (upgraded to Outperform at Wachovia), MEMS +1.0% (initiated with Buy at Jefferies).

Disclaimer & How I use this list

Post from: Trader Mike's Blog

Watchlist for January 23, 2008

ShareThis