Early Bird Report 4-12-12
Another gap higher this morning (though not as much as yesterday) after a pretty uneventful inside day yesterday. This was after a big gap…that tells you how weak Tuesday was. From an individual stock view yesterday, we were sort of all over the place. Recent leaders like AAPL and PCLN finished lower while the market was higher, something we did not see during the 4.5 month rally. Certain stocks held up just fine and have showed no real weakness during the mkt pullback (LVS, CMG for example). Then there are commodity stocks, which continue to underperform. Worst case scenario for the bulls would be an early rally attempt which fails and the market goes green to red. Sell programs have found few bidders to the downside and they could have their way if we sink lower toward yesterday’s lows. Worst case scenario for bears is a sideways early session that leads to a grind up. This would give confidence to long side traders who have been a bit nervous of late to come back in looking for bargains.
Gapping Up– MCK TSCO WAB
Gapping Down — AVID APOG FAST
No indication —
Watchlist: This is a breakdown of stocks w/ certain technical characteristics in light of yesterday’s action, NOT a recommendation to Buy or Sell. Always consult your own registered broker/advisor before initiating any positions.
Under $10 range break long momentum looks with strong closes/actionable charts: YRCW PRKR WFR GEVO MNTX SINO NEWL SHIP NKA DVR CXPO PWAV DSCO
Over $10 long looks w/ strong closes/actionable charts coming out of a range: LVS SHW BNNY VRSK SRE SBUX NIHD CCI TFM
Weak close/weak chart/downside range break: FCX VRX SWC CJES EQT DNR
GoPauseGo: RENN EXTR // IP OAS EV CBE MSCI MSFT APD MXIM EL
Pocket Pullback (3-5 day orderly pullback from strong trend): TRIP GCA RBN CI AMLN DPS WLP PRX
Down to 20d: EP PM FOSL KO CL MA SJM RBN MJN CI AET DPS WLP
Down to 50d: UDR EBAY CVH COST NI AGU HUN AMZN VFC
Down to 200d: D TMO NTAP CXO
Current Positions in our Ditto Trade Mirrored Swing Account:
Long DDD from 22.05
3 ideas for today’s trading day:
These are ideas…. NOT recommendations. The idea behind this section of the report is to illustrate my thought process when looking at potential swing and day trades. 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.) Breakout long: TFM
Very strong looking chart, virtually unaffected by recent market pullback. Rising wedge pattern on the daily, its looking to push past the horizontal resistance that was cleared with yesterday’s 52 week high close above 49.50. Quite a few shorts are in the name, around 15% of the float. I would look for a push on the open, and if today settles in as a trend higher day, this could possibly set up as a real nice extension.
2.) Pullback long: WLP
7-day pullback after a big run from 63 to 74.50 in late March. Closed Tuesday right on its 20d MA, and yesterday followed it up with an inside day with a tight range. Would look for a move past 70.20 for a trigger entry, and would use a stop below 69.20.
3.) Small cap or sub $10 momentum long: CXPO
This stock has been flagging pretty good since announcing an oil discovery on 3/29. It popped from 3.30 to over 4.00 on heavy volume, and has since held that price area, while keeping some pretty good relative volume levels. Watch today for a move past 4.30 for momentum buyers to come back in the name. Keep an eye on the relative volume, as that will be necessary for any sort of meaningful move today.
4.) Traditional short: FOSL
High risk/reward short idea here, and one that should be watched closely so that it doesn’t get away from you. I’m looking at this as a short today based on the way it displayed no strength yesterday while the market was rebounding. It closed in the red near lows after a gap higher, and is now sitting on its 20d Moving Average. If the market overall was on a bit more solid ground near term (I know we are still very much in a medium term bull trend), I’d maybe look to buy this here at the 20d, but I think based on how some of the recent leaders performed yesterday, we may see some additional profit taking in some stocks that have seen outsized recent gains. The plan today, is to watch this name and the broad market tone. If the market goes green to red, and FOSL loses its 20d, I think it could be ripe for a flush lower. The gap up today actually helps us get a feel for how it is trading. If the market continues higher, I will leave this one alone, and wouldn’t be caught dead short above 135 in any sort of strong mkt environment.
The creation of this morning’s Early Bird Report was compiled while listening to the music of Jesus and the Mary Chain