The Equities Room Blog

The Early Bird Report 12-30-11

Should be extra light trading today as we head into the end of year and holiday weekend.  Likely won’t do much here or stick around too long once the volume dries up.

NEWS/EARNINGS  STOCKS

Gapping Up–  MOSY

Gapping Down —  AMR  DCTH  PRMW

No indication —

Under $10  long momentum  looks with strong closes/actionable charts: SRZ  CWTR  ZSTN  DXCM  CODE  CRME  GTXI  MITL  ASTX  FENG  DEXO  AFFY  CRIS  PRMW  ECYT  QPSA  AFFX  YMI

Over $10 long  looks w/ strong closes/actionable charts: UGI  BLK  MAS  OMC  ILMN  WMT  PCP  BRO  DF  LNCR

Weak closes/short looks: GRPN  DECK  SFLY  IMAX  TRIP  CVH

Pulling back to MA support:

20d:  OPEN  CJES  SODA  ADS  WCRX

50d:  OXY  KBR

3  ideas for today’s trading day:

These are ideas…. NOT recommendations.   Often times I trade these setups, many times I don’t…dictated by market tone for that day.   Complement these ideas with your ownresearch before making any trading decisions.   Always consult your own registered broker/advisor before initiating any positions.

1.)  Traditional long:  WMT

Don’t want to do much today, but it you are looking for momentum, it might be worth watching WMT through 60 resistance level for a trade out of the gate as it would be then trading up into 52 week high territory.

2.) Traditional short:  IMAX

I especially don’t feel like getting short today, but I suppose IMAX would seem like a good candidate after it couldn’t hold its 50d MA yesterday and closed on lows in a strong tape.

3.)  Small cap momentum: YMI

Strong buyer came into the stock on the close, pushing it up to its 50d, out of some recent sideways action.  Will watch the stock today to see if they come back for more to try and push it up to the 100d, where it ran to earlier in the month.

The Early Bird Report

The Early Bird Report 12-29-11

Weak action yesterday as $SPY pulled back to its 20d MA after a nice recent rally.  We are gapping up some today, however, and it’ll be interesting to see if sellers come back out today.  Two days left until the end of the year holiday weekend, trading will continue to be light.

NEWS/EARNINGS  STOCKS

Gapping Up–  JASO  FSIN (M&A)

Gapping Down — EXAR  MOS  AMZN

No indication —

Under $10  long momentum  looks with strong closes/actionable charts: PEIX SQNS  TXCC  LNG  TRGL  MALL  CRME

Over $10 long  looks w/ strong closes/actionable charts: CMG  IDCC  YNDX  VRSK  JCP  WFM  ITRI  M  SREV  KORS  XYL

Weak closes/short looks (and ones that didn’t participate in recent mkt rally): HBI  BMC  ROK  UIS  HPQ  DGIT  HLF  CFX  CRR  MASI  SWC  BIIB  SLW  DCI  EOG  TTWO  PAAS  QCOR  FLS  ADSK  CTSH

Pulling back to MA support:

20d:  TMK  PCLN  FDX  CATM  ADS  BLL  LOW  STT  CCK  MSI  LKQX  CNQR  TWC

50d:  APH  EMN  OXY  NUAN  CPX  INTC  WAG  JEC  PXD  JPM  WCG

200d:  THO  GGP  DIS  CERN  RGLD  SWK  CDNS

3  ideas for today’s trading day:

These are ideas…. NOT recommendations.   Often times I trade these setups, many times I don’t…dictated by market tone for that day.   Complement these ideas with your ownresearch before making any trading decisions.   Always consult your own registered broker/advisor before initiating any positions.

1.)  Traditional long:  WFM

The stock was a strong performer yesterday in a weak market, lifting out of consolidation up toward early Dec. pivot highs (70).  If the market can turn around today and reverse yesterday’s selloff, this will be a good long candidate through that 70 level.

2.) Traditional short:  ADSK

This stock performed poorly  during the market’s recent push higher and closed weakly yesterday on lows…sitting right on pivot support from late November (29.76).  Will look to short through that level today if the market sees continued weakness.

3.)  Small cap momentum: CRME

Big volume push into the close yesterday saw this stock close on highs at critical 2.25 area.  If it can trade through there today, and can build on the volume seen yesterday, it could be an interesting daytrade coming off 52 week lows and an oversold condition.

The Early Bird Report

The Early Bird Report 12-27-11

Another slow week ahead.  There generally are some nice trades to be found in this gap week between Christmas and New Year’s, but its important to remember that volume and follow through  can dry up pretty quickly…so take your profits quick, because everyone else will.

NEWS/EARNINGS  STOCKS

Gapping Up–  MJN  MHR CALM  PARL (M&A)

Gapping Down — GLD  SHLD

No indication —  INVN

Under $10  long momentum  looks with strong closes/actionable charts: URZ  LEAP  VOXX  KID  MOTR  TAT  MNI  QPSA

Over $10 long  looks w/ strong closes/actionable charts: VZ  WYN  VHC  MSI  NKE  MCD  GES  WMT  ALXN  ISRG  ALR

Weak closes/short looks:  AWAY  GEOY  TZOO  CXW

Stocks trading up to key Moving Averages:

20d: ESV  SYMC  CLF  ARCO  HIG  MAT  ADTN  CHK  EXPD  CMTL  NUVA  LVS  CDNS  LTD  MDRX  WYNN  RDC

50d: ARRS  JCI  AXP  DRI  PDCO  F  VOLC  CSX  OAS  GME  REGN  COG BRY  BIG  ANN  TEN  UHS

200d:  APD  NDAQ  AMLN  WDC  GT  MCO  WU  CPHD  CRUS  LVS  GPN  BRO  ADI  FDX

Pulling back to MA support:

20d:  TOL  HCSG

Bullish MA Crosses (out of consolidation):

20–>50: AF  BMS  JEF  LINE

50–> 200: INTU  CINF  JBHT  LOW  RHI  TWX  UPS  LVS

3  ideas for today’s trading day:

These are ideas…. NOT recommendations.   Often times I trade these setups, many times I don’t…dictated by market tone for that day.   Complement these ideas with your ownresearch before making any trading decisions.   Always consult your own registered broker/advisor before initiating any positions.

1.)  Traditional long: MSI

A strong performer in the 2nd half of the year,  MSI showed some nice strength on Friday, pushing out of a recent wedge pattern on the daily chart on high relative volume (on a very slow day in the market, no less).   If it can get past the 47.25 area (Dec. pivot high), it seems poised  to test 47.75 (Oct. pivot high) and 47.90 (all-time highs).   However, if this year has taught us anything, it is to be aware of a false breakout.  We’d like to see the broad market show strength today, as well as see some continued high relative volume levels in order to get very comfortable with the trade.  Will likely ignore it as a long idea if it trades below 47.

2.) Traditional short: COG

Simply a play against its 50d MA (78.50), which it has struggled to push through four times  since its move off last weeks’ pivot lows (71.76).   In order to see this short idea play out, we will likely need to see the market and the oil/gas sector show  some weakness today after a nice 4 day run last week…so will likely wait out the open to see if that in fact is happening.    Absolutely do not want to be short if it trades above that 78.50 level.

3.)  Small cap momentum: LEAP

Some nice volume Friday as it looks to push out of multi-week consolidation on the daily chart.   Did a nice job of holding above its 50d MA during its  recent pullback.  Will look at the stock as a long above the 8.60 area for a move to the early December pivot high area over $10.  There are a couple of nasty wicks in the 8.80 area, so I will be wary if the stock stalls there again.  Will set stops around the 8.20-8.30 area.

The Early Bird Report

The Early Bird Report 12-23-11

NEWS/EARNINGS  STOCKS

Earnings/Corporate news:

Gapping Up–  RMBS  EK  SPWR MNTA FTEK

Gapping Down — CAMP  CBK  SFLY

No indication —

Under $10  long momentum  looks with strong closes/actionable charts: CODE  FSII  SUNH  FVE  XIDE  ACW  RTEC  VNET  DQ  MERC  ECYT  AFFY  ADY  SYUT

Over $10 long  looks w/ strong closes/actionable charts: AMED  LHCG  SODA TJX  LAMR  SFLY

Weak closes/short looks:  UA  RL  TGT  TSCO  MDCO  NEM  DECK  CRI  YOKU  ULTA

Stocks trading up to key Moving Averages:

20d: ADM  AMTD  CLGX  STX  WCG

50d: CAT  ADM  GDI  RES   FE  BDX  COG  ETN

200d: TROW  FDX LMCA  OHI    GDI  JACK  SSWY  FISV  WTR  EOG  XRAY

3  ideas for today’s trading day:  NONE

These are ideas…. NOT recommendations.   Often times I trade these setups, many times I don’t…dictated by market tone for that day.   Complement these ideas with your ownresearch before making any trading decisions.   Always consult your own registered broker/advisor before initiating any positions.

1.)  Traditional long:

2.) Traditional short:

3.)  Small cap momentum:

The Early Bird Report

The Early Bird Report 12-22-11

Not much of a gap in the market today after digesting GDP data.  Will be interesting to see if we get a day 3 rally after mildly bullish pause action yesterday following Tuesday’s surge.  Don’t really have a feel for whether or not we will, so I will just sit back and let my alerts and filters do the talking.

NEWS/EARNINGS  STOCKS

Earnings/Corporate news:

Gapping Up– TIBX  RAM  FSLR  PETD  WCAA (M&A)

Gapping Down —  BBBY  VVUS  AM   MU  ALSK  CCSC

No indication —

Under $10  long momentum  looks with strong closes/actionable charts: RAS CRIS  SUNH  GTIV  SKH  POZN  ZLCS  SURG  CGEN  FSII  GLUU

Over $10 long  looks w/ strong closes/actionable charts: DRIV  ABT  SHW  BLK  MJN  AGP  BA  HD  TSN

Weak closes/short looks:  NTES  INFA  INFY  VECO  RL

Stocks trading up to key Moving Averages:

20d: DRC  CAM  CPHD  HFC  SODA  KSU  BAX  LPNT  ESRX

50d: ABFS  RKT  AON  BRLI  VNO

200d: SDRL  CPT  OHI  TAP  TRN  ASNA

3  ideas for today’s trading day:

These are ideas…. NOT recommendations.   Often times I trade these setups, many times I don’t…dictated by market tone for that day.   Complement these ideas with your ownresearch before making any trading decisions.   Always consult your own registered broker/advisor before initiating any positions.

1.)  Traditional long:  RL // BIIB

Make no mistake, RL has been a dog the last couple of weeks, and specifically the last couple of days, when it couldn’t rally at all with the broad market.  Begs the question why I’m looking at it as a long today.  Well, if we are to rally today it would be day 3 in a 3- day surge.  Often times, this is when underperforming names get picked up as traders try to avoid overbought names.    As mentioned, RL certainly qualifies as a recent underpeformer and has traded under the weight of a steep downward trend line since early in the month.  Yesterday, we did see some sideways action, and the stock traded in a tight range between 135.80 and 137.    If we see more buying across the market, I will look to pick up some RL above yesterday’s 137 range highs for a bounce, with a targets at its 10 and 100d MA’s (140.77 and 141.88).  Won’t want to be long below yesterday’s range low of 135.80, and will likely use that as a stop for any long trades.

BIIB This stock has likely been frustrating bears lately as it it refuses to trade convincingly under its 50d MA, but I’m sure bulls would like to have seen this move up the past couple of days with the market catching a bid.  If we get a day 3 rally, I think this becomes a good r/r long setup as traders will see it as  a “leader” type name whose chart has held up, yet don’t have to chase recent price action.  Will look to enter a long over 112 area if possible, with a first target of 113.45 (Dec. pivot highs) and will avoid the stock (and likely set stops) below 110.55 ( the 50d MA ).

2.) Traditional short:  CPT

Stock has seen a nice surge the past week, running from 56 up to the 61 resistance area Tuesday near the close.  It couldn’t hold there above its 200d (60.86), and once again struggled there yesterday.  I will look at this as a potential short today IF the market weakens AND this stock fails again to clear that level.

3.)  Small cap momentum:  SKH  // MNI

Noticed some strength in some beaten up health care names yesterday (FVE  SUNH  SRZ  GTIV some others), and will be eyeing SKH today to see if the momentum continues.   Has seen some bullish sideways action this month on the heels of higher lows off its Sept 52 week lows.  If sector strength and market strength cooperate, I’ll look at 5.50 area for an entry with a first target near 5.85 (pivot highs from August) and secondary 6.69 (August gap down highs).  I will not want to be long this stock below 5.25 (yesterday’s breakout level) and will be wary of some tough action as the stocks in this sector have a way of producing some nasty action.

Will also be watching MNI today as it continues to form a bull flag on the daily chart since rocketing off lows earlier this month.  Its 200d (2.23) area seems to be holding it back, and looks likely to resume its upward move it it can get through.  Worth noting that this name trades in what many feel is a dead sector, and this recent rally could very much be considered a short squeeze since there is a ridiculous amount of short interest in the name.  When the move  is an obvious short squeeze, I always expect crazier action than normal, so I would avoid chasing to the upside, and will cut/avoid the stock if it trades below 2.00.

The Early Bird Report

The Early Bird Report 12-21-11

We finally held a gap higher yesterday, and wound up seeing a huge trend up day in the markets.  Unfortunately, current market climate forces us to be on guard today for a reversal (seen it so many times lately), or inside day.  Careful buying range highs early in the day.  One of these days, we’ll get to play more offense than defense, but now doesn’t quite seem like the time.

NEWS/EARNINGS  STOCKS

Earnings/Corporate news:

Gapping Up–  RIMM  NKE  CTAS  VMI  KBH  NSPH  CPST  ZAGG DFG (M&A)

Gapping Down —  JBL  ORCL  PAYX  HWAY  WAG  KMX

No indication — FSII  EXEL  LNN

Under $10  long momentum  looks with strong closes/actionable charts: SNTA  JKS  AMSC  ACAD  DXCM  DTLK  KTOS

Over $10 long  looks w/ strong closes/actionable charts: SIMO  APOL  GRA  CAG  ADP  SBUX  RBA  NUAN  AGN  V  IMB  WPRT  HD

Weak closes/short looks:  GEs  TZOO  STZ  BIIB  GEOY  ZIP  P  QIHU  MSI  MBI  VRTX  CREE  HSY  SPPI   INHX  IMAX  GMCR

Stocks trading up to key Moving Averages:

20d: LULU FWLT  GPS  PNRA  RRD  CAT  SOHU MUR

50d: DOW  PRI  PXD  LO  ZMH  AXP  ALTR  THO

200d: TRN  CPHD  STT  SWK  COH  EOG  AXP  HLF

3  ideas for today’s trading day:

These are ideas…. NOT recommendations.   Often times I trade these setups, many times I don’t…dictated by market tone for that day.   Complement these ideas with your ownresearch before making any trading decisions.   Always consult your own registered broker/advisor before initiating any positions.

1.)  Traditional long:  GOOG // VHC

GOOG — I rarely trade this stock, but its hard to ignore the setup.  It has consolidated nicely (in the face of recent mkt weakness) between 620 and 630, save for a nasty open range wick to either side on consecutive days 12/13 and 12/14.    I would look to be long above yesterdays high of 632, and would avoid the stock if it drops below yesterday’s opening range lows of 626.  I know that traditional breakouts have been hard to come by, but if we are able to shrug off this morning’s weakness and go green, I would think that stock could be a “leader” in the same way we’ve seen V move up to its 52 week highs.  I will admit, that I would have thought the stock would have made that push yesterday with all the buying in the market, but the theory today will be that if we see similar buying across the board, that this stock will start to give it up.

VHC is a stock I am eyeing to the long side as well today.  Monday we saw the stock rally sharply on the news that one its patents was being protected as a competitors challenge was thrown out.  After some sideways action yesterday, I’ll be looking to see if the stock can resume its push today.  Volume will be the key.   Will avoid it below 24 as a trip back to the 21.25 breakout area becomes too large a possibility.

2.) Traditional short:  TZOO // GMCR

One of the characteristics I am looking for in a short today, is relative underperformance yesterday.   This stock showed no signs of life during a very bullish session yesterday.  If it loses yesterday’s low around 26.50 and the market looks like it wants to give back yesterday’s gains, this one looks like a good short candidate.  25 is support, and below that, there isn’t much support until Oct. pivot lows around 20.  Must be noted that this stock is ABSOLUTELY  a squeeze candidate.  It has a small float, and high short interest, which can combine for volatile short squeezes in certain trading environments.  I would not recommend staying short if the stock finds a way above its 50d at 28.56…in fact I wouldn’t really want to be short this today AT ALL if it is trading in positive territory.

Similar to TZOO, GMCR did not participate much in yesterday’s rally.  It seems to be bearishly consolidating just over 52 week November lows near 40.  I would watch this one for a potential short below 44.50.  Due to the squeeze nature of the stock, I would leave it alone above 46.50 (and possibly look to get long).

3.)  Small cap momentum:  DXCM

A nice gap and go day from DXCM yesterday, as it traded to the top of its recent range on good volume (after holding the 8.00 level nicely during a consolidation period).  It ran out of steam at its 50d (8.61) at the close yesterday, but a break of that level sets the stock on its way to fill the early Nov. gap up to the 9.15 area, and possibly a run to August pivot low area near 10.  I did notice a boutique firm initiate coverage in the name yesterday, and it makes me a little bit nervous if that was the only reason for the move higher yesterday.  The stock will also be vulnerable to some sideways choppy action today as well, as it seems all stocks trying to break out throw in a chop day to throw momentum traders off the scent (see GTIV yesterday).    I won’t chase the stock too much past 8.61, as the risk/reward becomes murkier, and will also want to see continued high relative volume levels in the name.  On an a.m. pullback, 8.25/8.30 was yesterday’s a.m. gap low and a good spot to stick toes back in.  If it finds itself under the 8.00 support level, it goes off my radar and I won’t be involved.

The Early Bird Report

The Early Bird Report 12-20-11

I feel like I keep typing the same thing day after day this month.  Kind of sick of it, actually, so here is the short version.  We’re gapping higher, making it difficult to chase longs, especially since every day this month (save for two), we’ve wound up selling those gaps and putting in red candles.  Making it worse, the volume has been light and its a holiday week where there seems to be very little interest out there.  Good luck.

NEWS/EARNINGS  STOCKS

Earnings/Corporate news:

Gapping Up–   S  CLWR  CSIQ  NAV  CVS  SLXP  PGNX

Gapping Down —  SAFM   RHT  IIVI  TRGT  GIS

No indication —CAG

Under $10  long momentum  looks with strong closes/actionable charts: LDK  GTIV  AVID  CLFD  BSDM  ACAD  TWER

Over $10 long  looks w/ strong closes/actionable charts: ETP  REGN  V  CELG  KMP  VHC  OCN  ELN  CPO  ADES

Weak closes/short looks:  AGO  GCI  NTRS  SYY  AIG  CNW  PLL  WAG

Stocks pulling back near key Moving Averages:

20d: SIG  R  KMX  N

50d: LXK  ALL  PLT  BIIB  AMT  IP  MWV  TECD  NWL  MRO

200d: SYY  DCI  BLK  NUAN  CB  AIZ  NTES

3  ideas for today’s trading day:

These are ideas…. NOT recommendations.   Often times I trade these setups, many times I don’t…dictated by market tone for that day.   Complement these ideas with your ownresearch before making any trading decisions.   Always consult your own registered broker/advisor before initiating any positions.

1.)  Traditional long:  V// CF

If you would rather trade strong names with strong charts, then I would stick with V again today.  It traded very well yesterday in a weak tape and seems destined to try to crack the $100 mark.  Unfortunately, there is a strong chance that this morning’s gap will force you to chase it up near that level and encounter some real choppy trade there.

If you are sick of chasing and playing breakouts, and would like to find a name that is coming off of lows, I would look at CF.  The stock has been very weak this month (with the market), but the last few sessions, the name has tightened its range, and seems to want to hold this level.  Yesterday the stock stayed above its morning range lows (128.50), even as we sold off hard in the afternoon.  A break below 128.50, would suggest that this has just been a pause on the way back toward early Oct. lows, but if it we can (somehow/someway) actually build on a gap higher in the market, and get ourselves a trend higher day, I think CF has some nice upside back toward the 139.79 area.

2.) Traditional short:  NTES

Make no mistake, of the Chinese internet stocks, NTES has been the strongest performer lately, holding up relatively well, while the others have been very weak.  Yesterday, however, NTES looked like it may have started to crack, putting in its worst performing candle since late November, when it staged a 6 day drop from 48.97 to 40.69.    It is still trading below a 6 month Declining Trend Line and is now threatening to move below a cluster of Moving Averages (10/20/50/100/200) are all within a point and a half of each other.  IF the market sells this gap (again) AND there is continued weakness in Chinese Internet names, I think NTES could be a good short today, as it may try and play catch up with its peers.

3.)  Small cap momentum:  GTIV

A notably outperformer yesterday, this stock finally was able to move out past a multi-month sideways channel.   Trading above its 20/50/100d MA’s now (200d is still waaay up there at 15.15), there is not a whole lot of resistance on the daily chart.  Will monitor the stock  to see if it can build on yesterday’s nice move.    There are a few red flags, however.  First, the volume was good, not great.  For a breakout like that, I would’ve liked to have seen a bit more (glass half full says maybe it’ll come today).  Second, these types of breakout patterns have been very hit/miss for the past 9 months or so.  For every stock that actually builds momentum in the direction of the breakout, there seems to be one that reverses, and another that trades sideways.  Means that entries have to be picked very selectively, and chasing highs and long candles can be a bad idea.  Will look for a mild pullback or sideways consolidation on the open to get long.  I suppose buying above yesterday’s highs is an option, but volume would need to be pouring in, in order to justify chasing.  Below 6.25, I would be hesistant to be very long, as a reversal move becomes in play.

The Early Bird Report

The Early Bird Report 12-19-11

Another gap up today, but we’ve seen this before.  Sellers have been unafraid to sell into strength ( or is it just that there are no buyers?) and we’ve put in a series of red candles this month.  Don’t really have much of an opinion about today’s action as I treat pre-holiday weeks w/ “anything goes” gloves on.  Keep size low and stops tight.

NEWS/EARNINGS  STOCKS

Earnings/Corporate news:

Gapping Up–   IPSU  GST  TSRX  LVS  CMC  SQNM

Gapping Down —  JAKK  XLNX

No indication — WINN  (M&A) SOMX  ITW  SCHN

Under $10  long momentum  looks with strong closes/actionable charts: RJET  LCC  LUV  IVAC  CPST  STNG  AVID  HA  GTIV  VNET  MERC

Over $10 long  looks w/ strong closes/actionable charts: PETM  UTHR  V  DGI  VRSN  AIR  LQDT  SON

Weak closes/short looks:  WAT  IVC  SKUL  SWY  WMS  CTCT  SYY  XRAY  KNXA  CVH

Stocks pulling back near key Moving Averages:

20d: CRI  DTE  SIVB  X

50d: EMR  SNPS  SWK  STX  ITRI  CVH

200d:  CTCT  BR  MXIM  SYY  LTD

3  ideas for today’s trading day:

These are ideas…. NOT recommendations.   Often times I trade these setups, many times I don’t…dictated by market tone for that day.   Complement these ideas with your ownresearch before making any trading decisions.   Always consult your own registered broker/advisor before initiating any positions.

1.)  Traditional long:  V

Too hard to ignore this name, and its relative strength.   Very little pullback since its late November run to 52 week highs, it has been trading back and forth between 95 and 98.  If the markets can finally catch a bid as we approach the holidays, I believe this name will be leading the way.  Since traditional breakouts have been so difficult lately, I will likely keep my stops tight and wouldn’t want to be long below 97…would think that a break of the $100 level is easily in play if we finally get a trend day higher.

2.) Traditional short:  WAT // KNXA

I wanted to highlight two shorts today.  One that is weak already, and pushing recent lows…and one that is showing a “flag” type pattern that is mildly bullish, but can turn bearish if it loses its base.

WAT– This is the weak one.  This stock has been in a 4 month sideways channel, and is pushing the low end after touching 52 week lows on Friday.  Understand that I will not want to be short this type of name if the market holds gains today and rallies.  This would increase the odds that this name would hold the bottom of the channel and move back up to the low to mid 80′s top.  However, if we see more selling into strength today I think that this becomes a good momentum short candidate.

KNXA — This name has been flagging/consolidating after nice runs in October and late November.  It had a big gap up in early December and worked hard to hold that gap for the past two weeks.  However, the name showed signs of cracking on Friday and closed on lows below 12/8 pivot support.  It now becomes more vulnerable to a move back to its 20d (25.69) or its 12/2 gap level of 25.41.  This is a bit of a thin one, so if you don’t like trading that type of stock, I’d avoid it.  As with all shorts, I usually avoid them if the market is trading in the green…especially due to the mildly oversold conditions we have right now.

3.)  Small cap momentum:  AVID

Not overly excited about finding small cap names lately via premarket chart setups.  Most of the small cap trades I’ve uncovered have come via intraday filters, but AVID did stick out to me based on some constructive action on Friday.  It has been flagging for most of December after a late November run (like so many stocks), and showed strength on Friday as it traded to the top of its range on good volume.  If it can break the 8.00 level today with good relative volume levels, it could be a good squeeze candidate, as the name has been beaten up quite a bit this year and has a lot of short interest.  Relatively thin, so will have to be careful with how much size is put on.

The Early Bird Report

The Early Bird Report 12-16-11

Another gap higher this morning, will likely make for another difficult trading session.  Will we sell the gap like we did yesterday?  Or can we finally catch a bid and work of some short term oversold conditions?  So far in December, we’ve only seen two days of intraday buying…the rest of the days we’ve been in distribution mode.  To be honest, I’m just going to try and be ready for both scenarios…its too difficult to try and predict.   There are still some decent setups out there, but its important to remember that it is a quadruple witching, holiday season Friday.  Good luck to all.

NEWS/EARNINGS  STOCKS

Earnings/Corporate news:

Gapping Up–   ADBE  CNC  ZQK  CALL  ATRC  RRR (M&A)  CRYP  (M&A)  ISTA  (M&A)

Gapping Down —  RIMM  ACN  SINA  INHX  STLD  VRUS  IDIX  ACHN  GILD

No indication — YRCWD   HEI  DRI  AKS

Under $10  long momentum  looks with strong closes/actionable charts: PRTS  GA  NCT  MDTH  CBRX  SARA  GEVO

Over $10 long  looks w/ strong closes/actionable charts: ABT  DUK  MDCO  VPHM  HSP  XEL  UAL

Weak closes/short looks:  GCI  KMX  RJF  ADP  SYY  DNB  CVH  FIS  XRAY  ITRI  FISV

Stocks pulling back near key Moving Averages:

20d: IBM  TECD  LEN  XRAY

50d: OIS  EMR  MJN  RJF  SNPS  GIII  SWK  ADP  LPS  XRAY  EL  NKE  BIIB  ESRX

200d:  RRC  CTCT  COH  BIG  LTD

3  ideas for today’s trading day:

These are ideas…. NOT recommendations.   Often times I trade these setups, many times I don’t…dictated by market tone for that day.   Complement these ideas with your ownresearch before making any trading decisions.   Always consult your own registered broker/advisor before initiating any positions.

1.)  Traditional long:  ABT

If you’re looking for leadership, its hard to argue with drug stocks lately.   PFE, MRK, BMY and the like are all at or near 52 week highs, while the market in general can’t find its way.    ABT is a stock in that arena that has held up as well, and is setting up with a pattern that lends itself to a day trade if certain mkt conditions are met.   The stock had been trading in sideways consolidation for the month until yesterday, when it traded against the market and held its gap to close on highs.  If we can hold our gap today and find some buyers in the market, ABT is a good bet to extend this move past consolidation and make a run to 52 week highs.  Two potential problems:  First, the stock is showing a bit of a gap already in premarket, and that can make it difficult to find a good daytrade entry.  Second, these types of breakout moves have had a low success rate of late, and have frustrated many looking for follow through.  We won’t want to be long below 54.60 (morning lows yest), and hopefully we won’t have the chase the stock too high to get long.  As mentioned, this trade works best if we find actual buying across the board in stocks today.

2.) Traditional short:  ITRI

Have seen a lot of charts that look like this one.    On one hand, it is forming a pennant/flag on the daily chart, and in a more bullish market, I’d consider looking at that type of pattern in a more bullish way.  However, if/when the market stays weak, these flag-type patterns eventually can lose support and turn into breakdowns.   In fact, this stock did the exact thing in mid November, losing the lower base of its flag formation (35.50 area) and dropping down to 31.50.   34.87 is the 50d MA here, and also happens to be the area in which the stock held yesterday morning (34.66 was the actual low).  A move below either today would be a good short entry IMO if the market continues to sell off.  I wouldn’t want to be short above 35.20.

3.)  Small cap momentum:  GEVO

This small cap renewable energy play had news out yesterday about an agreement with Coca Cola bottling, and the stock ran hard, from 5.50 to 7.25 (just about at its 50d MA) after the announcement.  The stock couldn’t hold all its gains in the afternoon, however, and it dropped down to close in the 6.450/6.50 area.  I will be watching this stock again today for volume to see if can be a multi-day mover.  This is a thin stock, and can be very difficult to play, especially if HFT algos begin to mess with the bids/offers.  I would suggest NOT chasing any long short term candles, and would probably ignore the name/idea if the stock trades below the 6.00 area.  Best scenario is some sideways action around the 6.50 area today on the open, while  seeing some high relative volume in the name.  If it can do enough volume,  a challenge of yesterday’s highs is not out of the question.  Worth noting that this beaten up name was over 25.00 in April.

The Early Bird Report

The Early Bird Report 12-15-11

More herky jerky action as we are getting a big gap higher across the market after yesterday’s weakness.   Equal opportunity frustration for bulls and bears.    Not much to say that hasn’t been said.  Not sure I want to lean short after all the recent selling pressure, but I also don’t want to chase any gaps.  I think the best thing bulls can hope for today is an immediate pullack/gap fill attempt in the first hour.  From there, we should be able to see if there are real buyers waiting.   If there are, it sets us up for a more meaningful rally, instead of this gap BS.

NEWS/EARNINGS  STOCKS

Earnings/Corporate news:

Gapping Up–  NVLS (M&A)   SONO (M&A) FDX  CEDC  WLT

Gapping Down —  BPAX  AIS  NDSN  LRCX  (M&A) DECK  HON  NUE  DMND

No indication — PAY  PIR  RAD  WGO  SOA  RNF  RTK

Under $10  long momentum  looks with strong closes/actionable charts: PGNX  NCTY  SINO  ZLCS  SHZ  WINN  CRDC  GLCH  AXK

Over $10 long  looks w/ strong closes/actionable charts: VPHM  SRDX  STAA  VRTX  TNGO  GMAN  CXS  HSP  BMY  ALK

Weak closes/short looks:  DLB  SYY  PRGS  BA  ATHN  CVH  OCR  ADP  OMCL  TJX  YOKU

Stocks trading near key Moving Averages:

50d:  CAKE  TAP  CBST  ONXX  FTNT  EMR  HON  TSS  MHK  CSCO  SAFM

200d:  JBL  SIG  RRC  B  ADP  ATVI  SLE  HRL

3  ideas for today’s trading day:

These are ideas…. NOT recommendations.   Often times I trade these setups, many times I don’t…dictated by market tone for that day.   Complement these ideas with your ownresearch before making any trading decisions.   Always consult your own registered broker/advisor before initiating any positions.

1.)  Traditional long:  VRTX

Stock is gapping up a bit, so it may be a little bit tricky to get good fills here, but there are a few catalysts working for this name as a trade today.  First we saw this beaten up biotech stock break out of a month long range yesterday and close on highs with heavy volume against the run of the market.  This morning, there is news about formally appointing a new CEO as well as some FDA news about an NDA being accepted.  I do think that yesterday’s strength likely was some of this news being leaked, so there is some chance there will be a “sell the news” type reaction today.  However, I will still be looking to try and get long as long as it stays above $30, due to its relatively oversold condition.  There is not much resistance until its 50d MA at 34.50, and offers good r/r for a trade today.  Would rather buy on a pullback, but only above the $30.

2.) Traditional short:  PRGS

Broke down out of monthly range yesterday (which represented another lower high), and closed on lows (20.45 area), sitting on the last two major Moving Averages (100 and 20d).   Through this area there is not much support until 19.43 (bottom of 11/29 gap fill) and 18.43 (11/25 pivot lows).   Not sure how this stock will be affected by the gap up in the market, but if I’m going to short this through the 20.45 area, I’d like to see some continued broad market weakness (as usual).

3.)  Small cap momentum:  WINN

To be honest, I don’t like much in small cap land right now/today.  WINN sticks out to me as it had a very strong day yesterday coming out of a tight range on good volume.  Sort of feel that buying too far above 5.75 closing area is a chase, so I think I will watch for either a quick pullback to 5.50 range on the open, or  some opening range consolidation before buying this today.  This is a follow through momentum trade (not exactly the type that has been working lately), so I will need to see some high relative volume levels before I trust this trade. 5.95  (50d MA) is the first area of resistance.

The Early Bird Report