Are You Trading HPQ? Here’s What The Weekly Chart Is Telling Me

• August 26, 2005
• Jack Rothstein

Markets across the globe trend
higher. Lets not waste any time. Lets examine a few stocks of interest. Interest
to me because I am involved and plan on adding to current positions. What is
examined relative to each issue is the current trend of trade. Lets get into a
few timely stocks right now that have favorable odds long and
short.                                                                                             

 

Cadence Design.
(
CDN |
Quote |
Chart |
News |
PowerRating) 15.83

The stock acts well. It
remains a low risk play. The chart provides evidence of that reality and the
fundamentals happen to confirm it. CDN is in a solid advance and I plan I adding
to the position carried on a cross above 16.20. That action-taking place would
confirm the eventual test of its peak in the 20 zone. The stock is up over 14%
this year. And 27% over the last 52 weeks. Place the sell stop at 14.09.

                                                                                               

Hewlett Packard
(
HPQ |
Quote |
Chart |
News |
PowerRating) 
26.90

A rise above 27.25 and the
breakout that occurred the other day is confirmed. The stock is extending its
modest advance. The move could be serious. The move could be big. That is what
the chart tells. The weekly chart displays the probabilities clearer. When
viewing a weekly chart objectively the odds making money long HPQ is favorable.
It is good to grab coming into the 25 zone. HPQ ought to be bought crossing
above 27.25. Place the stop at 24.45.

                                   

NVIDIA Corp.
(
NVDA |
Quote |
Chart |
News |
PowerRating) 
29.37

NVDA trades well right now.
The technical pattern is positive. The stock is in an advance that hints toward
higher highs. The stock is in an uptrend. It has much headroom. Its in great
shape on all fronts and ought to be owned ,and like HPQ, build a meaningful
position. I am buying it down to 28.50 or crossing 31.05. Those are the levels
to work with. Place the trading stop at 27.65 and the investing stop at 24.65

                                               

United Online
(
UNTD |
Quote |
Chart |
News |
PowerRating) 
13.24

This is timely. I bought the
shares yesterday and will take on more today as it gets set to open higher. UNTD
took out the top of its base. It did that yesterday as it rose above 13.10 and
closed above 13.20. Ultimately the stock has the potential to challenge the 20
zone. Right now the focus is just getting to 15. That is the point it could
pause. It is a low risk try right now. It just began its advance. Taking out the
top of its base indicates the outset of a new advance. The major move of the
year just occurred. So here is a .com that is ready to rock and roll. I am
involved as long as the technical underpinnings remain solid. Place the stop at
10.99.

                                   

Teradyne
(
TER |
Quote |
Chart |
News |
PowerRating) 
16.22

Here is a stock that ought to
be had right now. Right now all you really need to do is stick a toe in the
water. That is it in a nutshell. Then wait till the stock proves itself. It
proves itself when it crosses 16.70 on a closing basis. It is at that time when
you ought to come at the stock harder. Place the stop at 14.25.                                

                                               

EMC Corp
(
EMC |
Quote |
Chart |
News |
PowerRating) 
12.92

Here is a lousy stock. Let me
present you with garbage. If you are serious about making money in the stock
market then having the ability to sell short will enable you to do just that. I
believe that EMC is a good stock to sell and be short. It is a good stock play
short right now. It is in decline. The decline is getting into gear. It is a
weak time of the year for stocks in general. The argument made is that weak or
vulnerable stocks will get hit harder in anemic markets. The current market is
not hot to trot but tired. When it fades then weaker stocks tend to fade harder.
That is what is happening in EMC’s world right now. EMC is in a hard fade. So
selling short up to 13.20 is a good play. I would sell short right here. I sold
short just above 13. The group is actually mixed. Stocks like EMC and NTAP are
worse then laggards. They are both in a declining stage in their respective
trading cycles. EMC is vulnerable to a drop to 11. That is the most recent
bottom. Look at the chart. Look down. See the room! It has room to decline
further. Down to the 11 zone. Short it up to 13.20. Place the stop at 13.60. Low
risk try.

                                               

Bristol Myers Squibb
(
BMY |
Quote |
Chart |
News |
PowerRating) 
24.12

Trash. That is the best that
could be said about this name. Pure ecstasy for a hungry bear. The bears have
this one wrapped tight and selling short is the way to profit. It is a low risk
try. The stock is clearly in decline. Selling short BMY is where the smart money
flows. Money is flowing out of the stock. There is little buying power here to
disturb the trend. The trend is clearly negative. The decline just began after
forming a long top. The top stage of trade has transformed into a decline. It is
evolving classically. BMY is a classic short chance. Place the stop above the
50-day line at 25.10.

                                   

WCI Communities
(
WCI |
Quote |
Chart |
News |
PowerRating) 
29.91

Good short. The homebuilders
are done for a while. Is the real estate market headed for a fade? The action
displayed by homebuilders recently indicates the strong possibility of a
decline. WCI is now in decline. The other homebuilders that I am short are TOL,
RYL, and KBH. The line on WCI has broke. It is a broken stock. It is one of the
first builders to move into decline. The others are in intermediate slumps and
must be watched carefully. WCI is the lowest risk of the bunch right now. Pace
the stop at 30.60 on part and 31.50 on the rest.

                                                           

 

Jack S. Rothstein

Jack Rothstein is the
President of Rothstein Investment Advisory Services, Inc. and is a 20-year
veteran stock trader and a money manager.

Mr. Rothstein also writes Wealthcast, a monthly newsletter about the technical
behavior of the markets. He has been quoted on Bloomberg, CNNFn, the Dick Davis
Digest and the Dow Jones Newswire. Since 1993, Mr. Rothstein also hosted
WealthCast, a radio show in the Washington DC area covering the stock market.