In a down market, this stock keeps rising
A good way to play the market
is to be long stocks that are in rising trends and short those that are in
decline. Picking at bottoms may lead to smelly fingers. The odds are
in your favor when advances and declines are confirmed. The following stocks
that will get an examination right now are those that are either in decline or
advancing. The declining issues ought to be sold short while those that are in
an advance ought to be owned. Right now the market is neutral at best. It is
held captive in a tight range. Underneath the surface the currents causing wild
gyrations are powerful. The tape is split down the middle. It is a stock pickers
market. It is not enough to pick stocks to make a bundle in this time period.
It’s also about execution. When to buy and sell certainly has a roll to play
relative to performance. Lets get into a few stocks that ought to enhance
performance. Performance is enhanced when the buys and sells are done right.
Performance is enhanced by doing the right thing. Lets examine what’s so
relative to the following instruments.
Cardinal Health
(
CAH |
Quote |
Chart |
News |
PowerRating) 63.37
That price above for CAH is Friday’s close. CAH
had a strong day on Friday and ought to be bought on pullbacks to the 60-61
zone. I am involved and it appears that this stock is angling toward higher
price zones and the natural pullback after a strong move provides the chance to
get involved in this issue. The reason is clear. The stock is in new advance and
its pace of trade suggests favorable odds that its price rises to levels greater
then what is currently expressed. Money flow is positive indicating a stock that
is being accumulated. Check out the base that formed after the brutal fall that
occurred in July 2004.The next big move ought to carry it up to the 66-68 zone.
That is the upside prior to what appears to be some resistance. The odds favor a
move to that level. A better price is in the vicinity of 60.50. That is an ideal
place to get it. The risk reward is highly favorable at that point. Place the
stop at 56.99.
M-Systems Flash Disk Pioneers
(
FLSH |
Quote |
Chart |
News |
PowerRating)
29.90
I mentioned this stock the other day and will
follow up cause it pays to do that so that we can all get a handle on it. It is
moneymaker right now. That is the reason to pursue the shares and perhaps build
a satisfying position in it. It is slightly extended right now and ought to be
picked at as it comes in. It is certainly not at the bottom. Picking at bottoms
may lead to ……its good coming into the 27-28 zone. That is a suitable point to
begin buying shares. Place the stop at 25.45
United Online
(
UNTD |
Quote |
Chart |
News |
PowerRating) 13.86
Its good to get at 13-13.50. That is the zone to
begin accumulating and building a position. It pays 6%. Not bad. It is angling
toward the 14.05 52 week high made on 9/13. Not a bad run for this stock that is
in the midst of a nice advance. It is likely to encounter stiff resistance
between 18 and 20. It’s a buy right now as the current advance takes on a more
serious tone. The stock is trading above the top of its base as it broke out in
better then average trade last week. So the trade is timely. A better price is
near 13. The market is fading this morning yet UNTD rises. It was one of the
positions I added to on Friday and unlike some that were traded around none was
taken off the table as Friday’s session drew to a close. I am not buying any
unless it comes in. I will get aggressive and buy hard if it can close above
14.05. Place the stop at 11.99.
JDA Software
(
JDAS |
Quote |
Chart |
News |
PowerRating) 15.66
It’s trading down a tad today in sympathy with
the overall market. It is a very good buy at 15. That is where I intend to add
to the position I carry. JDAS is holding up well today. A day when the market is
fading this stock is down a tad. A more serious correction and it may come into
contact with the 15-price zone. That is the best price point at this juncture.
Place the trading stop at 13.39.
Sears Holding Corp
(
SHLD |
Quote |
Chart |
News |
PowerRating) 124.23
The pattern of trade indicates a stock in the
beginning of a decline. When is the best time to sell a stock short? At the
outset of a decline. The top formation already formed. Check out the chart and
observe the lovely top that formed this year after a stunning advance. Now at
this time with the advance all over and the top formed complete it is time to
engage this instrument short. Sell short right now. It ought to be shorted all
the way up to resistance at 130. It is not a day trade but a swing bet. The
stock just violated its 200-day moving average. It is below 124 at this point.
Take advantage of SHLD’s slide into decline and sell it short .It is a timely
short. Place the stop at 130.50.
Marriott International Inc
(
MAR |
Quote |
Chart |
News |
PowerRating) 61.65
I just examine the chart and let the chart, its
price pattern, or the way it expresses itself dictates how to act in
relationship to it. Right now the way to act is to sell MAR short. That is the
way in which you will make money in this instrument right now. If it drops below
60 then sell it hard. Just look at the top formation in place and the decline
that is just getting started. MAR peaked at 70.78 in July and now is threatening
to drop below 60.Don’t know where the bottom is and don’t really care cause we
all now know what happens when you try to pick at the bottom. So MAR is actually
near its top in full decline right now as it trades below all key inflection
points. I will short more under 60.
Hilton Hotels
(
HLT |
Quote |
Chart |
News |
PowerRating) 22.10
This is another hotel chain that is down in the
dumps. Sell declining stocks short and eventually the execution of the trade
will net a gain. That is the way it trades right now. Lets look at the chart and
weigh the evidence. The stock peaked at 25.81 in August. Today it trades at
22.10. It is in decline because the selling pressure has taken it lower then its
key inflection points. Trading below all key-moving averages does not indicate
good technical health. It ought to be agreed upon that HLT is technically
broken. A rally up to 23 and the short is more attractive. The 200 moving
average is 22.99. Trading up to 23 and the short is more compelling especially
if the stock loses power into that stiff wind. A drop below 21.50 and new levels
of support will be tried. Place the stop at 24.10.
American Medical Systems Holding
(
AMMD |
Quote |
Chart |
News |
PowerRating)
18.65
This stock is oversold. That is the way it trades
right now. I am involved short. Will short more in a rally. Good place to begin
selling short is a rally up to 20. Stiff resistance up at that level. It broke
what appeared to be descent support the other day. I would rather not add to the
position down at current levels and am content to hold it. Oversold stocks ought
to be shorted up. That is the game plan regarding AMMD. Place the stop at 21.30.
Jack S. Rothstein
Rothstein Investment Advisory Services, Inc.
3600 Chain Bridge Road, Suite 200
Fairfax VA 22030
Phone 888-343-4825 — Fax 703-385-7232
www.jrmoney.com —
www.wealthcast.com
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.