Wednesday’s Top Stocks From TradersWire
I think I heard it on
last night’s NBC news. “Americans are giving up on low carb diet.”
Thanksgiving Day, Christmas, and New Year, it is too tough to be on diet.
Anyway, the news reminded me of Krispy Kreme Doughnut (KKD). Remember?
The company stated a few months ago that low carb diet was one of the reasons
why the stock had been under performing. Look at the daily chart of KKD below.
It appears the stock is forming a 1-2-3 bottom. If it moves above today’s high
(10.18), it has a chance to challenge the number 2 top (10.60).
Diamonds Trust (DIA) followed through and closed at a 10-month high. It
is not so drastic, but the RSI is negatively diverging. Be careful with new long
positions. We may experience a mild pullback. Nasdaq-100 Index is still
struggling to take out the December 3 high. Again, be careful with new long
positions.
Now, four stocks for Wednesday:
The market is overbought. What I really want to see is a decent pullback. Let me
give you two potential short selling candidates first.
VeriSign Inc (VRSN): The issue has been laboring to take out a resistance
line, and appears to be forming a double top. Short VRSN if it slips below
34.30. Place a stop just above the resistance line (34.93). Our target is the
December 9 low (31.60). Watch out the 20-day EMA. It may become a support level.
Electronic Arts (ERTS): This is a potential island reversal pattern. The
stock gapped up, but it sold off and closed poorly. Short ERTS if it trades
below 59.95. The initial target is 58.90 then 57.57. Risk 0.5.
KLA-Tencor (KLAC): Semiconductor was today’s top performing sector. If it
continues, long KLAC above 47.59. The issue is challenging a gap zone
on its daily chart. Target is near 50. Risk 0.75.
FileNet Corp (FILE): The stock may be ready to bounce off the 50-day EMA.
Long FILE if it trades above 26.46. Target is 28. Place a stop just below the
50-day EMA (25.76).
If you have questions, feel free to mail them to me.
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