The Equities Room Blog

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.

 

 

News/Earnings Stocks

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

 

The Early Bird Report

Early Bird Report 4-11-12

Huge gap higher in the SPY’s this morning, on the heels of a big two day drop to start the week, which was accentuated by yesterday’s trend down sell off.    I was totally off yesterday, thinking that this market was going to chop around near its 50d rather than see some heavy selling.  It was the type of action we haven’t seen basically during the whole 4.5 month rally, with strong/leading  stocks finding no bidders and weakness extending across all sectors, even after what had already been a buyable pullback.  Today’s gap higher makes it more difficult, in my opinion, for long side traders today.  Entries will be tough, and one would have to think that if we really have seen a trend shift, there will be some anxious short sellers looking to fade this bounce.

 

News/Earnings Stocks

Gapping Up– AA  MFRM  SMSC  OI  TZOO  TITN

Gapping Down —  JDAS  OPNT  CSC  AMCC

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: RENN  EXTR  HEAT

Over $10 long  looks w/ strong closes/actionable charts coming out of a range: NIHD  GEO

Weak close/weak chart/downside range break: MR  RKT   OKE  OPEN  NFLX  ORCL  IRM  ARCO  TEN  F  DDS  JWN  RL (to name a few…really almost every stock out there)

GoPauseGo: EC  CALL

Pocket Pullback (3-5 day orderly pullback from strong trend): EGY  WRB  CSTR  LNKD  TTEK

Down to 20d: ARBA  CSTR  PGR  TTEK  PM  RGR  AET  VMW  RCII  CRM  WLP  KO  EQIX  REGN  SHW

Down to 50d: WRB  ELN  DEO  DAR  MSCI  STI  AMTD  BBT  AVB  DGX  INTU  LTD  URBN  RTN  DDD  EFX  BWLD  CERN  PDCO  MAR  SNI  FBHS  JWN  EBAY  VFC  OCR  FFIV  BCR  LEN  DLR  JEF  APH

Down to 200d:   PGN UTX  PBCT  DAN  CBG  MOH  WSM  JCP  ROC  MRVL  FLR  ATW

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.)  Traditional long: APH

Coming off a  5 day, 5 point drop from 52 week highs, APH has now pulled back almost to its 50d Moving Average, just missing it yesterday afternoon.  Was actually hoping we’d get a unchanged or lower open to get a real test of that 50d today to see if it would hold as support.  Instead, we’re getting a big gap to the upside.  The gap up  makes me think it may be tough to get good entries into this stock, but it will be on my radar nonetheless.  I’ll just be waiting to see how the open plays out before jumping in.

 

2.) Traditional short:  RL

Watching RL today to see how it handles itself at this 170 support area.  It closed just below there yesterday, and if we trade back below there again today, it would seem that there is a gap to fill to the downside after its big gap higher in early Feb.  Looks like the market will be gapping higher today, so I would imagine this stock would gap up  as well, but if sellers come back into the market today, I’ll be watching this name for a short.

3.) Small cap or sub $10 momentum long: RENN

One of the more frustrating stocks out there, RENN has seen countless failed attempts to rally out of this two month range.  So, it was no surprise that the stock left a fairly good sized wick to the upside yesterday after trading above 6.00 in the morning.  But, if you put into context what the broad market was doing, I think you can still view the move as a signfiicant one, since it was able to finish higher on the day, and it did so with heavy relative volume.  There are quite a bit of shorts in the name, and if the market can bounce back (it looks like it is based on the gap in the SPY’s) some more volume here could lead to some follow through to the upside.  Would note that the stock is gapping up over 6.00 already here in the premarket.  Whenever there is a stock that I have targeted that is up in the premarket, I look for any sharp candle to the downside early into the open to try and pick up shares.  I try and avoid buying straight on the open, and will be doing the same thing here today.

The creation of this morning’s Early Bird Report was compiled while listening to the music of Husker Du.

 

The Early Bird Report

Early Bird Report 4-10-12

SPY’s are indicating unchanged after a session where we limped into the close, ending a pretty bearish session.  All seemed normal when buyers came in early on to buy stocks after a big gap lower, but those advances couldn’t hold and we wound up putting a big wick to the upside (and bearish candle on the daily).  A move through yesterdays lows and it seems the 50d Moving Average will be next support in the SPY’s, at 137.42, with the 135 support area from early March really the next obvious spot.  I don’t think we’ll see too much heavy selling with earnings season now at hand, but you never know.  Personally, I’m expecting some choppy sideways action for a bit.  Normally, this would make for a very difficult environment, but at least earnings season will give us some opportunities in stocks that will be moving independently of the market.

News/Earnings Stocks

Gapping Up– AKRX  ANW  CHK  WZE  SVU  CREE

Gapping Down — VPHM  VVUS  HLIT

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: IBIO

Over $10 long  looks w/ strong closes/actionable charts coming out of a range: LVS  Z

Weak close/weak chart/downside range break: CAG  FWLT  DE  MTZ  VPHM  ITT  EA  DXCM  ASH

GoPauseGo: FOSL  BBBY  INXN  SCSS

Pocket Pullback (3-5 day orderly pullback from strong trend): DLR  INTU  ADSK  DDD  AGEN  CSTR  BV

Down to 20d: PPS  ACC  DDD

Down to 50d: MFC  HOLX SYMC  WRI  PKI  FAST  CCE  QLIK  NUS HIG  VAR  SWK  BWA  IP  COV

Down to 200d:   AMAT  FSL  GIS  HRL  UHS  HCP  SGY  G

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.)  Traditional long:  Z

Thinly traded relatively new issue (IPO’d) last July, is starting to enter some rare air on the daily chart after really bucking the trend yesterday with a strong day, pushing out to an all-time closing high.  Wary of chasing highs in case we get some choppy sideways action in the name, but keep an eye on the relative volume and see how it trades around the open.  The thin nature of the name could lead to some sharp intraday moves if momentum traders start to hunt in this name.

2.) Traditional short: FWLT

Broke down yesterday through support and the daily chart seems to be fulfilling a head and shoulders move to the downside.  The depth of yesterday’s sell off may make today a bit difficult to get aggressively short, but if we rally on the open, I’ll be keeping an eye on this name if it gets back up over 22.  If we do get that bounce, I’ll be looking to possibly take a short to see if it can slip back down as the pattern seems to be indicating lower prices are ahead.

3.) Small cap or sub $10 momentum long:  AGEN

Haven’t played this small cap biotech name during its impressive run lately, from 3.00 to 7.00+.  After hitting highs last week, it has pulled back in an orderly fashion back under 6.50 and put in a doji candle yesterday, indicating a good chance for a reversal.  Will be watching for a move over 6.50 today for momentum players looking to get back in the name.  Under yesterday’s lows around 6.20, I’l likely avoid the name.

The creation of this morning’s Early Bird Report was compiled while listening to the music of Pavement

 

The Early Bird Report

Early Bird Report 4-9-12

After the 3 day weekend, we are seeing a real big gap lower in the SPY’s after some weak jobs data and some China CPI numbers.  Should be very interesting here to see what type of tone the market has today.    This 4 month rally has seen gaps to the downside get bought time after time, and one of this size would have had traders chomping at the bit to find bargains.   Worth noting, however, that the last couple of attempts to rally out to 52 week highs in the SPY’s were weak, and our once steep trend line is starting to flatten out a bit.  Personally, I think it is a situation where we are finding a lack of buyers up here before earnings season gives us a clue as to whether we get a meaningful time-based correction.  I think that while certain setups can absolutely still be bought on setups and gap-downs (and I will be leaning long for some quality setups to buy on this gap lower), but overall action will likely be very choppy until we get a feeling as to how stocks react to this quarter’s earnings.  As I stated last week, if we see the leaders beat estimates and can’t rally, we’re likely in for a meaningful correction which will be highlighted by traders looking to sell rallies and gaps to the upside (the opposite of this last rally, which was highlighted by by traders buying any and all dips).

 

News/Earnings Stocks

Gapping Up– AOL  GBX  PKT  MCP  CALL

Gapping Down —  MOH  SABA

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: VALV  ARRY  OSN  SCMP VRNM  FCH  OCZ  OMN  PCYO

Over $10 long  looks w/ strong closes/actionable charts coming out of a range: GEO  DNKN  BEN  INXN  LVS V  VRX  DLTR  EL  ROST  RL  COO  PAA  CZZ  RUE  SCSS  ITMN  DECK

Weak close/weak chart/downside range break: ETN  SANM  DV  EGO  AEM  NFG  ADTN  BAS  DOV  AIZ  URS

GoPauseGo: ERJ // CMI  IMAX (lower)

Pocket Pullback (3-5 day orderly pullback from strong trend): NAT  KIOR  PNR  EGY  LEN  VDSI  ZUMZ  ALGN  FBHS  LNKD  VRNT

Up to 20d: ICE  DNKN  WFM

Up to 50d:  MCD  ARRS  GPC

Up to 200d: WCN  ORCL

Down to 20d: SMG  AOL  AMRN  QLIK  L  YELP  WFC  AMZN

Down to 50d: HSP  BEAV  BMO  SON  WDC  CSCO  RJF  OSG  TIF  PETM  ABC  CIT  GD  NVLS

Down to 200d:   BMO  VNO  TSN  KEG  ACM

Current Positions in our Ditto Trade Mirrored Swing Account: (For a review of all our swing trades for the current year, check the “Swing Trade Updates” category within our blog).

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.)  Traditional long:  CSCO

I picked out CSCO to highlight, but really I’m taking a look at all the stocks on my list that have pulled back to 20 and 50d Moving Averages.   I’ll be setting alerts for all of them to see which (if any) go from red to green early on this big gap lower in the market.    I think if those Moving Averages are real support, we’ll see buyers come in right away in those names and they could lead us higher if we see the gap down bargain buying that has been so common during this 4 month rally.

2.) Traditional short: PII

This is certainly a strong stock, so it is important to be careful when trying to short this…I don’t recommend coming out shorting anything on a day like today. I actually expect a strong name like this to try and rally on the open from any gap lower…its what strong stocks do on days like this.  However, if that attempt to rally/go green fails, I’ll be watching for a move back below the 71.75/72 area (or any consolidation area if the market starts to really slide) later in the morning, as the stock could then try and fill the gap back down to the 70.50 closing area from 3/23.   Will not be touching the stock from the short side if it is able to trade above 73.

3.) Small cap or sub $10 momentum long:  OMN

OMN had a nice quarterly report on March 21, and the stock jumped up that day, from 5.70, touching 7.31, before settling back around the 6.50 area.  Since then, the stock has traded in a sideways range between 6.50 and 6.90, before jumping out of that range Friday on some pretty good relative volume.    Today’s market has a decidedly negative premarket tone, and that may be too much for a range break play to overcome today, but I’ll be watching this one if it can go green and/or break past 7.20 Friday highs.  Will ignore it under 7.00.

The creation of this morning’s Early Bird Report was compiled while listening to the music of De La Soul

 

 

The Early Bird Report

Early Bird Report 4-4-12

SPY’s are looking at a big gap lower this morning, likely setting up for a test of the 20d Moving Average.  This comes after a day yesterday that trended lower all day until a mean reversion rally toward the close.  A test of the 20d Moving Average today would be the 3rd in the past few weeks, and the first two were handled without much issue.    Still no denying that we are in a strong uptrend, and would expect buyers to come in looking to buy again on this gap lower, simply because it has be the “go to” trade during the 3.5 month rally…we’ll see.  I think one clue as to whether we are in for a correction will be how leading stocks act toward what must be high earnings expectations.  If we start seeing stocks sell off on earnings beats, that will be a big clue.  Earnings season doesn’t kick off really until next week though, so I’ll wait patiently before changing my tune.

News/Earnings Stocks

Gapping Up–  MIND  NOOF  GMXR  GKSR  MAGS  MON

Gapping Down — SNDK  TSLA  HOV  CBLI

No indication — PAA

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: GNOM  YONG  HEAT  MOTR  JOEZ  CGEN  AF

Over $10 long  looks w/ strong closes/actionable charts coming out of a range: VRTX  DNDN AON  PAG  WFC  WRB  V  MCO

Weak close/weak chart/downside range break: ISIL  SWY  CY  VSH  APOL NAV  IAG  CODE

GoPauseGo: MWA  SBX  TXT  FTNT  ACOM  HOS

Pocket Pullback (3-5 day orderly pullback from strong trend): IDTI  GIII  CA  AOL  LEN  TA

Up to 20d: OIS

Up to 50d:  PGN  FWLT  BPO  ONXX  OSK

Up to 200d:

Down to 20d: C  GS  EXP  SOHU  CTCM  HOG  IACI  TER

Down to 50d: TMO  INVN  WSM  MS  DHI  OCN  EXPE  HOT  WNC

Down to 200d:   UBS  LM

Current Positions in our Ditto Trade Mirrored Swing Account: (For a review of all our swing trades for the current year, check the “Swing Trade Updates” category within our blog).

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.)  Traditional long:  HOS // FTNT

GoPauseGo setups are a favorite of mine, but especially so on gap down days like this…if stocks can hold the lows of the “pause” day they really set up well. HOS put in an inside day yesterday after a nice move to 52 week highs on Monday.  Watching how it handles yesterday’s tight range lows of 42.60.  If those hold or are regained quickly, I’ll look for a red/green play here for an extension to new highs.  In FTNT, the 28.05/28.10 area will be the key area to watch.

2.) Traditional short:  BPO

The trick w/ any shorts today is finding stocks that you don’t have to sell into a large gap in order to get short…tough when the market is gapping so much lower.     BPO has had a nice bounce up to its 50d MA after a 3 day rally…maybe it won’t trade too much lower on the open and we can look to  short through 17.40 for a move back to the 16.75 support.    In truth, if this market doesn’t find a bid from this gap down,  it’ll be high beta stocks that get hit hard, but its hard to pinpoint chart based setups on many of those since they’ve acted so strong, so I’ll stick with this boring idea.

3.) Small cap or sub $10 momentum long:  TA

Stock has pulled back in an orderly fashion since making new highs last week, and yesterday had a stabilizing candle on the daily chart.  Today’s gap down will make it tough, but if this stock refuses to trade back below two day support at 6.25, I’ll be watching for a long look.

 

The creation of this morning’s Early Bird Report was compiled while listening to the music of Nirvana

 

The Early Bird Report

Early Bird Report 4-3-12

SPY’s are mildly lower here premarket after a really strong day to kick off the second quarter of 2012.  As mentioned here before, day over day follow through has been really tough to find in this market at these levels.  Lately, we’ve seen consolidative, choppy, even mild pullback action after strong breakout candles, and we’d expect the same today.    Even so, I’d imagine there will be some buyers coming in on this gap down to start the day (another theme of this rally), so will still be looking at some long opps to begin the day, with the idea of taking profits quickly within the opening range on any winners.

 

News/Earnings Stocks

Gapping Up– DDD  CONN  URBN  HGSI

Gapping Down —RY  CAVM  GWRE

No indication — ISCA

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: PTIE  VRNG  RENN  DANG  IBIO  DRL  ARWR  CETV  BMTI  VICR  GNOM  CUZ  HBAN  SUNH  FVE  GTIV

Over $10 long  looks w/ strong closes/actionable charts coming out of a range: GIL  HNT  PCL  SAVE  FDS  FTNT  MCO  APD  SLE  VRSN  BJRI  FFIV  MAN  OVTI  ESI  HOS

Weak close/weak chart/downside range break: SFLY  BMRN  GRPN

GoPauseGo: DRYS  DSX  SBSA  AVB  GILD

Pocket Pullback (3-5 day orderly pullback from strong trend): ESL  CPHD

Up to 20d: CYH  UNP  GLNG  CLR

Up to 50d:  GPC  PAA  NUAN  WU  MCD  CNX

Up to 200d:

Down to 20d: DKS  VAL  SIMO  HMSY  RBCN

Down to 50d: GEL  RGC

Down to 200d:   WWW  SWY

Current Positions in our Ditto Trade Mirrored Swing Account: (For a review of all our swing trades for the current year, check the “Swing Trade Updates” category within our blog).

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.)  Traditional long:  APD

Built a nice consolidative base up here between 87 and 92 for the last couple of months.    Some nice volume yesterday as price begins to push the top of the range.  Market kicked off the month with some nice strength yesterday and if it can continue, this stock is a candidate to make a run at $100.    Will watch the stock on the open to get a feel for how it will trade around the 93 resistance area in within the context of the broad market.   Traditional breakouts from obvious areas have been tough day trades as we know, so it may be tricky today in a weak market.  One to keep on the radar if it or the market doesn’t cooperate today.

2.) Traditional short:  HMSY

Not too familiar with the name, but took note of the stocks inability to bounce off its 20d yesterday in a strong market after a weak quarter ending trade on Friday that saw the stock fail at its 50d.  You could also make the case that the failure at the 50d represents the right shoulder of a H&S setup on the daily chart.  Yesterday amounted to a tight range inside day, and we’ll watch how it acts on a flush through yesterdays lows and its 20d MA.  Would be looking for a GoPauseGo move to the downside, though I’d imagine we’d see some support around 30.50.  Wouldn’t want to be involved in this trade if the market is green or the stock moves past 31.25.

3.) Small cap or sub $10 momentum long:  MTG

Not sure it will be “in play” today, but I think it merits watching today if the financials remain strong, as it was able to put in a rare close above the tricky $5 area.  Would like to see the group shrug off initial market weakness and trade green right away, and would like to specifically see some above average volume come into this name early in the day.  Never a good idea to chase this name, so would watch for pullbacks if it starts to extend rather than buying tops of long candles.

The creation of this morning’s Early Bird Report was compiled while listening to the music of Deer Tick

 

The Early Bird Report

Early Bird Report 4-2-12

Well, a new quarter has arrived, and the SPY’s are welcoming it with very little premarket gap…slightly lower at the moment.  Where we are headed from here?  Its easy to see arguments from both bulls and bears, really.  We’ve just come off an historic quarter, an incredibly strong and steep trend that survived any and all attempts to sell off, without any problem.  One one hand, as earnings approaches, you have to think that some bullishness is priced in and that earnings this quarter had better meet expectations.  That said, there is NO reason to bet against this market until price actually begins to show us that we should do so.  To start the month today we will stay nimble (as always), waiting and watching for any trends to play themselves out.  Most long trades will be taken from selectively attractive intraday and daily setups, and shorts will have to come on a break of morning range lows if we feel we are in for a trend day lower.

 

News/Earnings Stocks

Gapping Up–   AVP  TWER  VRNG

Gapping Down — GRPN  AEZS  KERX  AVII  ALGN  SINA

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  long momentum  looks with strong closes/actionable charts: ZAZA  TWER  DSX  STEM  SBSA  HZNP  ARWR  HGSI

Over $10 long  looks w/ strong closes/actionable charts coming out of a range: ALR  MAN  YNDX  RLD  TROW  GILD  MHP  AVB  BG  ELGX  HNT  RIMM

Weak close/weak chart/downside range break: WU  WBMD  JEC  ICON  LO  PBI  IDCC

GoPauseGo: AGEN  INFA  FUL  RHT  TXT  MCP  VMW  HNT

Pocket Pullback (3-day orderly pullback from strong trend): MWW  MS  QCOR  POT  SIVB  MDT  CNO  SGI  GS  QIHU  NFLX  HOT  IBKR  NTAP  TXI  SF  MTOR  LTD  CBST

Up to 20d: PAAS  FTI  RAI  PGN  DOV

Up to 50d:  ATO AGP  CHRW  EXC

Up to 200d:

Down to 20d: CLNE  ELX  SIVB  LVLT  LINTA  SEIC  HOT  HUN  MSCI  CNK  TIBX  CCOI  AFFY  ABD  EBAY

Down to 50d: WPX  JBL  VLO  WSM  KNX  BKS  CNQR  CINF  MTZ

Down to 200d:   VCI  CSC  FINL  RMD

Current Positions in our Ditto Trade Mirrored Swing Account: (For a review of all our swing trades for the current year, check the “Swing Trade Updates” category within our blog).

Long DDD from 22.05

Long PWAV 2/3 from 2.12

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.)  Traditional long:  HNT

Trying to fight tight setups to look at today as we start the month, and HNT fits the bill.  Stock gave a very tight inside day on Friday after a strong move Thursday off its 50d up just under 52 week highs.  Will be looking for the final “Go” in the GoPauseGo setup here on a strong move past the $40 level.  Friday’s tight range lows give us an easy and shallow stop level at  39.33.   If one wanted to be conservative, you could wait out the open to see if the broad market is giving any indications and watch for a test of that area before jumping in long.

2.) Traditional short: DOV

Not an aggressive short idea, but I do like the area in which it sits on its daily chart in terms of risk/reward.  The stock moved up Friday right up to daily TrendLine resistance at $63, which also happens to be right on top of its 20 and 10d Moving Averages, and would represent a third straight lower high after a bounce attempt.    Failure to clear that level would have me bearish in the context of a trend down market.   If we are seeing selling across the board and this stock fails to clear that area on the open, we’ll look at this as a potential short if we don’t have to chase price too far down, looking for a move back down toward recent pivot lows near 60.50.

3.) Small cap or sub $10 momentum long:  HZNP

Showed some really strong relative volume on Friday trading out of a month long range.   Couldn’t really find much of a catalyst for the move other than the look of its daily chart, which isn’t necessarily bad, but may give us pause jumping right in on the open on a cross above Friday’s 4.20 high area.  The safer play will be to look for a pullback down toward the 4.00 area too see if bidders can support the name and continued volume is present.  First target to the upside would be 4.50, where it stalled twice earlier in the year and represented old support from early October.

The creation of this morning’s Early Bird Report was compiled while listening to the music of  Social Distortion

 

The Early Bird Report