Wednesday, March 9, 2011

At a possible inflection point per the NASDAQ; some stocks look good

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There will be no entry on Friday and the weekend entry with the file updates will be late Sunday/early Monday, as I am traveling with my family Thursday - Sunday in upstate New York (Troy).  I will attempt to update the files via remote login, but no guarantees.

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Summary

  • My risk/reward measurement tool is mid-scale -- buying stocks today has an equivalent risk/reward profile, e.g., 1:1.  If you purchase stocks today ensure that they are moving upward aggressively.
  • The GGT price index rose 0.88% on volume that was 6% higher than average -- unremarkable.
  • The NASDAQ bounced off it's 50d MA for the 6th time yesterday, which typically is bullish overall.  The test of the 50d MA was in rapid succession, which according to some only counts as 1 test, not six, so interpret how you may.  Here's a link to the chart.  The important thing here is that the slope of the 65d moving average (MA) is positive but pointing down -- the positive means that there is still fuel in the tank BUT on the present course, we're going to break the 50d MA soon.  I need to see this slope line turn upward or at least horizontal for me to have a bullish view on the markets.
  • The strongest GGT industry group is a defensive group:  Health-Hospitals/Nursing.  There are 22 stocks in this group that I track, and only 1 of them is rated "cash".  The majority of them have a positive 13d Force Index as well as a positive 2d Force Index, making entry today problematic in terms of risk/reward.  You should scan the group nevertheless.
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GGT Stocks with Favorable Effective Volume

Here are the stocks that I'm reviewing today:


As with all my figures, right-click on the image to open in a new browser window or tab.  If a stock is listed above but not discussed below it does not meet my review criteria.
  1. TXT continues on the list with favorable 40d Large Effective Volume (LEV) and slight accumulation on an 8d scale.  Volume was 22% above average yesterday.
  2. *SYT saw an increase in LEV yesterday while the price dropped.  The 8d LEV is diverging nicely from the Small Effective Volume (SmEV), which I like to see.
  3. CE continues to show LEV support on the 40d scale as well as the 8d scale.  Note that there was some LEV selling that occurred around 2:30, but overall, the change was within the norm for the stock.
  4. LFT has a favorable 40d as well as 8d LEV, but note that there was some selling that occurred on the LEV near the end of day that was hidden nicely from price.  This could be a crack in the ice for LFT, but overall, it's been accumulating nicely.
  5. MAS saw significant LEV buying at the end of the day while the price remained more-or-less steady.  
  6. BLT is a rather new breakout (GGT New Long) and the LEV pattern reflects this, with very little 40d support but solid 8d support.  If you like new candidates, pay attention to all GGT New Long entries with good EV support.
  7. *NBL saw continued accumulation on falling prices.
  8. WMB saw continued accumulation yesterday while prices peaked then fell.  There was a bit of LEV distribution at the end of the day, but overall, this looks interesting.
  9. *SUN saw huge accumulation all day while prices fell at the open and never really recovered.  Did I say I like this pattern?
  10. *GENZ is a bit more risky but has been experiencing an amazing accumulation pattern of lower-left to upper right on both the 40d and 8d scales, with barely any pullback since 3/1.  Someone picked up a 375K share big block yesterday, spending nearly $28M in 1 minute.  Give it a look.
  11. CVH continues to hold LEV levels while price falls, which is good for the stock.  SmEV is dropping, showing the retail guys moving through the exit door.
  12. *AEO continued to hold LEV steady on Tuesday while prices eroded all day.  Overall, the 8d and 40d LEV patterns are very strong.
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Trading Plan for Wednesday
  • TPLM is my worse holding, but LEV is remaining rock steady since my purchase of a trial position of 200 shares.  While price has dropped 8%, the fact that LEV is so strong will keep me hanging in there.  Note that I do have a trailing 2*ATR20 stop on the stock.
  • DIS will be sold in the EMCF portfolio for about a +5% gain.  The stock is rapidly losing LEV support and the price is not moving anywhere.  Without institutional support under it, I don't want to see the gains erode.  Further, the Elder FI(13) test using both EMA and SMA methods has failed 2 days in a row, showing that the stock is net down in volume overall.
  • I'll purchase trial positions (25%, adjusted for ATR) in the stocks above if they look strong in the markets, as measured by price and/or LEV.   I do note though that the GGT risk/reward tool is mid-scale, showing a mediocre (at best) risk/reward ratio.
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Remember, you are responsible for your own trading decisions, and I am not.  Please do your diligence, and please take ownership for your actions.

Regards,

pgd

Position Disclaimer:  I own or influence positions the following equities:  DBA, DBC, DIG, DIS, DWSN, ERX, EXPE, FXF, GG, IGE, IGN, IXC, RJI, SCSS, TIP, TPLM, VDE, XLE, XOP.