Wednesday’s Top Stocks
Easy come, easy go–all within the confines of a ‘confirmed rally’. In Tuesday’s
trade, our three amigos closed at session lows, retesting the forbidden fruit
of key daily support. The ETFs, after gapping higher, reversed out of intraday
consolidations to trend lethargically lower on lighter volume in both the Nasdaq
(a hair above average) and S&P cash indices. For the day, the indices finished
down between 1% to 1.40%, setting up yet another glorious day for ‘Da Bulls
and ‘Da Bears…at least on an intraday basis.
What did you think I was going to say, ‘watch out below’, and scare the bejesus
out of ya? Those of you who actually bother to read my schtick, and most of
you do (although some seem to have flunked the Hooked On Phonics course), know
that my stance is predominately one of stressing caution within the market’s
‘confirmed rally.’ And, unfortunately for that other group of ‘traders’, well
let’s just say their time frame is a bit far removed from reality most of the
time. Although I’m sure to receive some real clever emails from this group,
on this our second day of testing technical supports, it doesn’t change the
technical perspective; only price and volume do that, and the last last time
I checked, it’s still looking like a pullback within a confirmed rally. Personally,
this is where ‘cautious bull’ becomes less cautious. For me, yesterday and today’s
price activity gives me (yes, cautious bull) the green light to start looking
for my own kind of value–reversal longs that have found key support and/or
potential breakout candidates, that are showing ‘gump’tion during our latest,
very, very scary–market pullback. When the story changes, CNBC will be sure
to tell you–in the meanwhile just stick to the same ol’ daytrading ingredients
that got you here in the first place, namely discipline and consistency, and
ego….NOT!!
It sure didn’t turn out like how I thought it would–but, that’s perfectly
OK as long as you kept looking for the high-probability setups. Case in point,
(hmm, I wonder if I lost that small group of fortune hunters?) on my radar and
onto some of your screens in the opening minutes were three calls–two shorts
and an ‘either/or’ type situation. One of these, Symantec (SYMC) was a ‘looking
great’ pick from the evening prior, but for some reason price, volume, and the
short-term technical perspective kept the ego in check (actually, none taken),
and the alert ‘to take action’ in the here and now, on the right side of today’s
trade, happened to be a position short. ‘High Five me Cramer!!’…oh please.
Oh, and I had others with edge as well….not-so-profitable trades. Who do you
think I am, Joe Battapaglia–only poking my head up when the sun is shining?
Heck no, the reality of it has been, and always will be this–to keep your ‘edge’
in check, you have to be willing to play the odds, just like the house does
in Vegas. But, just like the house does, you have to keep it a highly disciplined,
consistent business that knows its limitations (hmm…table limits, stop losses
sound remotely similar), so that you can keep on grinding it out, day in, day
out….Vegas style, baby.
Volatility Readings:
| Volatility Index | Close | Net Change | Signals/Direction | % Above/Below 10 Day Moving Average | Significance |
| VXO ( VXO | Quote | Chart | News | PowerRating) |
19.90 | up 1.08 | cvr 6 buy | 12% above | At Extreme |
| VXN ( VXN | Quote | Chart | News | PowerRating) |
29.45 | up 1.64 | none | 12% above | At Extreme |
Hottest Sectors : Pharmaceuticals
(
PPH |
Quote |
Chart |
News |
PowerRating) and Gold/Silver (XAU)
Weakest Sectors :Â Software
(
SWH |
Quote |
Chart |
News |
PowerRating) and Internet
(
HHH |
Quote |
Chart |
News |
PowerRating)
Wednesday’s stocks to watch:
Technical Strength Top of Range.
Stocks are scanned from TM’s Proprietary and Technology 10 Momentum lists on
the Indicators page, as well as being hand selected, based on the most recent
technical action. This may include some or all of the following: abnormal
volume, price patterns, as well as bullish action off of technical price
supports or clearance of technical resistance in that day’s session.
| Name | Symbol | Price | Technical Strength | Average Volume 000’s | Today’s Volume |
| NVE Corp | ( NVEC | Quote | Chart | News | PowerRating) |
47.20 | Top of range consolidation on test of weekly pattern b/o, with strong confiming volume |
742 | 2,007 |
| SupportSoft | ( SPRT | Quote | Chart | News | PowerRating) |
12.29 | High volume spinning top formation within established trading range, closing above EMA resistance in mid-level ‘handle’ on 30 min chart |
651 | 882 |
| Marvel | ( MVL | Quote | Chart | News | PowerRating) |
30.78 | Hammer close on mid level intraday consolidation, strong volume day within established range |
974 | 1,554 |
Technical Weakness Bottom of Range.
Stocks are scanned from TM’s Implosion and Technology Implosion Lists on the
Indicators page, as well as being hand selected, based on the most recent
technical action. This may include some or all of the following: abnormal
volume, price patterns, as well as bearish technical action at key support,
or resistance levels based on closing prices.
| Name | Symbol | Price | Technical Strength | Average Volume 000’s | Today’s Volume |
| Ask Jeeves | ( ASKJ | Quote | Chart | News | PowerRating) |
16.93 | Engulfing bearish bar below recent pivot lows, to close bottom of range |
2,502 | 2,043 |
Stock Reversal Setups Closing Basis.
Stocks that are setting up on a closing basis as potential long or short reversal pattern
candidates. Candidates listed may have triggered on a closing basis, or close
to triggering ( my general rule is to list the pattern setup if it is within
+/-.15 of trigger price). Patterns include basing patterns (Slim Jims, 1,2,3s,
Double bottoms) consolidations, and triangle reversals. Background technical
supports in the form of Fibonacci levels, EMAs (DEMA=daily ema), RS, and former
price action are used in the decision making process.
Long Reversals Closing Basis.
| Name | Symbol | Price | Technical Strength | Average Volume 000’s | Today’s Volume |
| NA | NA | NA | NA | NA | NA |
Short Reversals Closing Basis.
| Name | Symbol | Price | Technical Strength | Average Volume 000’s | Today’s Volume |
| Silicon Laboratories | ( SLAB | Quote | Chart | News | PowerRating) |
47.31 | Reversal bar on 50-Day EMA test, closing LOD on increased, above-average volume |
1,238 | 2,299 |
Institutional Favorites and Institutional Laggards.
The following stocks are selected from the Nasdaq, S&P 500 & 600 Indices,
and HOLDRs. These are normally heavily traded, liquid issues that are exhibiting
relative strength or weakness, patterns (consolidations or Slim Jims) , or
last hour volume surges, indicative of follow through in the very near term.
Institutional Favorites
| Name | Symbol | Price | Average Volume 000’s | Today’s Volume |
| NA | NA | NA | NA | NA |
Institutional Laggards.
| Name | Symbol | Price | Average Volume 000’s | Today’s Volume |
| Electronic Arts | ( ERTS | Quote | Chart | News | PowerRating) |
46.03 | 1,441 | 8,563 |
| QLogic | ( QLGC | Quote | Chart | News | PowerRating) |
54.28 | 4,390 | 3,949 |
| General Electric | ( GE | Quote | Chart | News | PowerRating) |
28.44 | 19,836 | 40,323 |
Best of luck to everyone. Please use protective stops on all trades.
Chris Tyler