Do you like going in and out several times? Watch these stocks!

  • September 15, 2005
  • Michael Kestler

Coming into Wednesday’s trading
day I was leaning to the downside. However, Micron
(
MU |
Quote |
Chart |
News |
PowerRating)
came up on my alert to buy at Tuesday’s high. I as able to immediately get long
at 12.75. When I pulled up the 5-minute and daily chart, I realized that it was
trading very close to its 52-week high of 12.97 from September 20, 2004.

Once again, I was able to identify an aggressive buyer by reading the tape and
backing it up with the bids showing on the NYSE Openbook. Since MU failed to
break down from its 52-week high of 12.97, I realized there was enough support
to go long. I took a long position again at 13 and was able to remain long up
until the close, where I got flat for the night.

This stock is a prime example of how you can find opportunity to buy day highs
even when the overall market is selling off.

On the short side of the market, we will discuss Disney
(
DIS |
Quote |
Chart |
News |
PowerRating). DIS came up on my scanner as a day low and then as a 52-week low,
breaking the July 7, 2005 52-week low of 24.35. Due to the emerging news
released in the last 40 minutes of the trading day, DIS began to spiral down
from 24.50. It immediately came up on my scanner as a day low and by reading the
tape and identifying the sellers, I was able to get short at 24.40. It seemed
like DIS found support at 25.25, so I covered my short and prepared myself to go
long for a possible bounce. It seemed like DIS was going to bounce, so I bought
stock at 24.25 and a few seconds later sold my long at 24.30. I did not get the
bounce to the upside I anticipated and immediately looked to get short. When a
stock does not bounce enough, you have to anticipate that the selling is not
over with. I was able to get short at 24.20 and covered the position at 23.90
and 23.95. Following this trade, I was able to go long at 24.00 and sold at
24.10 at the end of the day. On Thursday, I will definitely be looking to go
short through the DIS low of 23.87. Remember, there are always two sides to
every trade, so if DIS fails to break the low, you better believe I will try to
make some money to the long side. I am just looking for it to be active, along
with a number of other stocks.

With the bankruptcy filings of Delta
(
DAL |
Quote |
Chart |
News |
PowerRating) and
Northwest Airlines
(
NWAC |
Quote |
Chart |
News |
PowerRating), I  will be keeping an eye on the
other airlines as well, looking for possible entries on the reaction from
investors.

Remember, it is expiration week and stocks tend to get a
little squirrelly, so keep your wits about you and take advantage of the 
volatility to the upside and the downside.

If you have any questions please e-mail
mike@evotrading.com.

Mike Kestler

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