Trader Mike

I hate to add to the bearish consensus but I have to call ‘em like I see ‘em. Right now I’m seeing a lot of charts which look ready to roll over. A good number of them look a lot like the QQQQ chart — a weak bounce back to the 50-day moving average which reminds me of many of the patterns in William O’Neil’s ‘How to Make Money Selling Stocks Short’. For now the opportunities look better to me on the short side.

Below are charts of the indices as well as some of the better (worse?) looking stocks I found in my scans, including LRCX, BRCM, AAPL, MVL, RIMM, CIEN, RACK and GOOG:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down…

I’m not sure if this is the first time it dropped post-earnings but I could be wrong… I’ve been watching GOOG the last several days as it’s tried to climb back above its 200-day moving average. It looks ready to break down to me but I’ve thought that before and it didn’t happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on …

Daniel asked about RACK this morning before its nice 7% gain today:

If possible I would like a chart request upon RACK.

To be truthful, I believe in the company and its products, and having seen that it has gone down I jumped in, and to be truthful I am down now. I was up in a couple of times but thought that it could go higher (because I believe in the company) so I decided to go long.

Now it is hurting!

I have bought at 37.43 and at 39.35

In response to the part about believing in the company I say be sure to differentiate between the company and the company’s stock. This decade is littered with great companies whose stocks …

I often get asked about how I find swing trade candidates. Hopefully this post will answer those questions. As I’ve written before, most of the stocks I track initially came up on one of my candlestick pattern scans. (Please feel free to search the archives and/or use the subject index) My process is no different today than it was in November 2004 when I wrote that post. My entry and exit rules are also the same as I’ve previously stated — for longs entries are typically above the previous day’s highs with a stop below the previous days low or some other support level on the chart. So instead of writing all of that again I’ll give a few examples here.