Intraday Investments Stalk Sheet for Friday, July 13, 2001
The fact that the market didn’t fill the gap on Thursday suggests that we will continue to rally into Friday. The fast paced rally in the afternoon session yesterday had the feel of a short squeeze fueled by decent earnings reports and a carryover of the Microsoft news.
Many of our plays from yesterday’s Stalk Sheet followed through as expected but we did not execute them very well. This was particularly true of the IRF trade and our short fades. It was unacceptable to miss such quality set ups.
Today’s Stalk Sheet will focus on finding long plays that have broken through key resistance that will now serve as support in the event the market were to reverse after Thursday’s big gap up and rally. Ultimately however, we will trade based upon what opportunities the market provides.
The internet, semiconductor, broker/dealer, computer hardware, retail, telecom and insurance sectors look primed to rally. We saw a first reversal day in oil stocks but nothing spectacular.
Healthcare and Drug stocks look committed to the short side while the biotech and oil service sector appear over extended to the downside.
Be ready to fade semiconductor stocks if they gap up in the morning on light volume since their 2 day run is becoming over extended. This is not to suggest that the semi’s won’t go higher tomorrow, rather, they are due for a normal Fibo pullback before advancing.
LONGS:
FMC, FMC Corporation, Long > 69.70, Consumer Financial Svcs., $BKX.X
This stock has been consolidating for the past 12 days in the current price zone. Above 69.70 we should see some resistance around 70.10 and then 71.00. The stock is currently trading above all major moving averages on the 5, 15 and 60 min. charts and just needs another solid volume day to break through the technical resistance points just overhead.
KEY, Keycorp, Long > 26.43, Regional Banks, $BKX.X
Above this price KEY penetrates a resistance zone established April 2 of this year. Key broke and closed above resistance of the last swing high on the daily and did so on good volume. Targets would be 27.00, 27.50 and 28.00.
FNM, Fannie Mae, Long > 86.00, Consumer Financial Svcs., $BKX.X
This one is above all major moving averages on all time frames but we will only enter it above 86.00 if the volume is 150% of the average daily volume. Otherwise, we will enter long above 86.50 (on an average volume day).
ALTR, Altera Corp., Long > 33.60, Semicustom Logic, $SOX.X
This stock has made a major move toward breaking the neckline of an inverse head and shoulders pattern. It needs to get above 34.60 to accomplish this neckline break. With the big run up it had on Thursday, we will also consider entering this trade on a Fibonacci retracement between 32.00 and 32.25.
CNXT, Conexant, Long > 9.30, Mixed Signal Datacom, $SOX.X
Will only trade this one above 9.30 if it sees strong volume as it may need a rest. A light volume gap up near 9.30 would provide the opportunity to fade this one.
CRUS, Cirrus Logic, Long > 27.35, Mixed-Signal, $SOX.X
Must see strong volume. Above this price we should see 28.50. This is a key technical resistance zone that appears to be a neckline of an inverse head and shoulders. Beware of the light volume gap up as we will look to fade it.
FCEL, Fuel Cell, Long > 22.40, Alternative Energy
Will need strong volume to break above the price which represents the 200 m/a on the daily chart.
FADE CANDIDATES:
The entire semiconductor sector on a light volume gap up.
MCHP, Microchip Technology, Short Fade on light volume gap < 34.75 to 35.05, Semicustom Logic, $SOX.X
This stock has rallied parabolically over the past 4 days and may be forming a double top (since this leg of the movement has been on substantially less volume). A light volume gap up would be indicative of such a technical pattern and would offer the perfect short fade opportunity.
WLP, Wellpoint Health Works, Short Fade on light volume gap up or rally < 102.80 to 103.30.
Volume is drying up on this one and we have overbought reading on the RSI on the daily and major divergence between the RSI and the price of the stock on the 60 min chart. Based on my experience with the RSI, WLP appears to have completed the fifth wave of an Elliott wave sequence.
SHORTS:
FRX, Forrest Labs, Short <73.40, To be added to $BTK.X
FRX loses the 200 ma on the 5 min and the 20 ma on the 60 min.
ABT, Abbott Labs, Short < 48.75, Major Drugs-Second Tier, $DRG.X
Willing to take this one below here (200 ma on daily) even though it has some support 48.50 (200 ma on 15 min chart) and 48.35 (40 ma on the 60 min). Below these levels, ABT should see 47.50 then 47.00.
HCA, HCA, Inc., Short < 42.67, Healthcare Facilities
Perfect head and shoulders formation on the daily. Below 42.67 is a break of the neckline. Predicted drop would be to 40.00 with some support at 42.00. Stock closed near the low of the day on strong volume. I like this play.
THC, Tenet Healthcare, Short <53.90, Healthcare Facilities
Dark Cloud Cover candlestick formation. Stock sold off on huge volume and closed near the day’s low. Below here this one will see 52.00.
Trade Well Today!
Ed, Steve & Deron
General Partners
intradayinvestments.com |
