STOCKS TO WATCH - MONDAY 10/18
HOTT had a high volume gap up in price 7 trading sessions ago. The move was the result of a news event. Since then, the price has come back down to a level of support. The 20 day simple moving average is sitting at 17.87 and should provide support.
The CMF indicator is showing very bullish money flows and indicates that systematic buying is going on even though the price has been pulling back.
The combination of indicators suggests that HOTT may be a buy candidate on Monday if the price can rise above Friday's high of the day. I would want to buy as the price is rising to confirm the reversal is in play. The more aggressive trader may want to buy any weakness at the open in anticipation of the up move but, I would set my stop just below the 20 day moving average to protect myself in case the reversal doesn't come. This is set up for a short term trade, not a buy and hold at this point.
stockcharts.com[h,a]daclyiay[d20040517,20041017][pb20!f][vc60][iut!Lc20]&pref=G
Since the market has been trading down the last couple of weeks, long set ups are scarce. I would be looking for reversal plays in the days ahead.
One reversal set up I currently see is GT.
The Stochastic for GT is showing very oversold. In conjunction with this indicator, we see a high volume bullish engulfing pattern on Friday. Bullish engulfing patterns forming in an established down trend, are some of your better reversal patterns. Add to this, the price closed up above the 200 day simple moving average and you have the makings of a decent intermediate term buy set up.
We want to be sure the momentum can continue so the buy point is just above Friday's high of the day. I think $9.75 is the buy point. I would set my stop just below the low of the day on Friday, I would say around $9.16.
The stop in this case is very important because if the price closes below the 200 day moving average, you have a break out failure and you don't want to ride this issue down if it fails.
stockcharts.com[h,a]daclyiay[d20040517,20041017][pb200!f][vc60][iut!Lp12,3,3]&pref=G
I will post other set ups as they appear on my screens. Keep in mind, these are merely set ups. We must have the follow through to confirm what the charts are suggesting.
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