---------- STOCKS TO WATCH - TUESDAY - FEBRUARY 22 ----------------------
NVLS is in the semiconductor sector and as was previously posted earlier today, the semi's are at at a point where volatility is low and the volatility is due to increase.
What I like about NVLS is that it's price is in a range that makes going long or short a high probability trade with enough of a reward to risk ratio to make the trade. I'll trade in the direction of price on Tuesday.
The bias should be to the upside and the pattern is showing a 3 bar drop off a recent price high. MACD and money flows are still positive hence, the set up favors a move to the upside. However, if I'm wrong, there is enough profit to the short side as well.
stockcharts.com[h,a]daclyiay[d20041120,20050220][pb50!b20!f][vc60][iut!Lah10,30,5!Lc20]&pref=G
Long: Entry target $29.09. Price target $32.25. Initial stop loss $28.48.
Short: Entry target $28.45. Price target $27.40. Initial stop loss $29.20.
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The Drug Manufacturers are starting to show some life. On Friday, MRK was up 13.0% and PFE was up 6.9%. JNJ looks like it wants to reverse after a 4-5 day drop. The stock in this sector that has my attention is WYE.
I will need to show several charts to show why I like this set up because some of you don't subscribe to Stockcharts and you will only be able to see 2 indicators at a time as opposed to all of them.
In the first chart, notice how the price has broken above the upper momentum band at a time when the band is starting to rise. MACD and short term money flows are also positive now.
This same set up appeared back during the first of December but what is different this time is that the price has bounced off long term support at the 200 day moving average.
stockcharts.com[h,a]daclyiay[d20041120,20050220][pd10,1!b200!f][vc60][iut!Lah10,30,5!Lc5]&pref=G
When I look at resistance, I see where the price is just under the 500 day moving average. The entry target should be just above it and if it's hit, should gather momentum over the short term.
The longer term stochastic, which smooths out the day to day volatility, is showing a nice break out from being oversold. The ADX is showing the green line crossing up and over a declining red line which is a buy signal. There are a lot of nice signals with this equity.
stockcharts.com[h,a]daclyiay[d20041120,20050220][pb500!f][vc60][iut!Lp17,3,3!Ll14]&pref=G
Entry target $40.55. Price target $43.00. Initial stop loss $39.60.
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APCC has pulled back the last 2 weeks after the price jumped from $21 to $25 in one trading session before profit taking started to take over. The price has come back to price support, where the move began, and shows a bullish candle from Friday's action.
The pattern isn't particularly strong but, it is indicating it could be due for a technical bounce due to the price support level and an oversold CCI on the short term timeframe.
stockcharts.com[h,a]daclyiay[d20041120,20050220][pb50!b20!f][vc60][iut!Lah10,30,5!Ld5]&pref=G
Entry target $21.96. Price target $23.00. Initial stop loss $21.30.
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RHAT (short). RHAT has failed a couple of tests at breaking above the 50 day moving average and is now falling below the 20 day moving average. With the 20 dma below the 50 and a wide separation between the two, it is an indication of a poorly performing stock and the failed tests add significance to the price movement.
MACD turned negative on Friday and money flows are negative as well. RHAT looks like it wants to set new lows.
stockcharts.com[h,a]daclyiay[d20041120,20050220][pb50!b20!f][vc60][iut!Lah10,30,5!Lc20]&pref=G
Entry target $11.53. Price target $9.70. Initial stop loss $12.00.
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RRGB (short). RRGB is a stock in trouble. After being in a strong Stage 2 uptrend, we are starting to see distribution as systematic selling programs are taking over.
The weekly chart will show where RRGB has dropped below the 20 week moving average on above average selling volume. Money flows have turned negative and MACD is showing strong negative fuel cells. This chart is what a pattern looks like that has seen the top.
stockcharts.com[h,a]waclyiay[pb40!b20!f][vc60][iut!Lc20!Lah12,26,9]&pref=G
The daily chart is showing the 20 dma below the 50 and we know this indicates a downtrend. MACD and money flows are negative.
I would prefer to short into the 20 dma but will short if RRGB can set a lower low on Tuesday. (I will wait and see how the first 30 minutes of trading goes and then determine the entry.)
stockcharts.com[h,a]waclyiay[pb40!b20!f][vc60][iut!Lc20!Lah12,26,9]&pref=G
Entry target: To be determined. Price target $40.00. Intial stop loss will be set after the entry.
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PTEN (short). I think PTEN is ripe for a 1 or 2 day short position. Friday saw PTEN rise 6.4% on above average volume. It gapped up at the open and had a very nice day.
I don't think this type of pattern is established by experienced traders. I think what we saw was a novice gap as those who have been afraid of missing the run are coming late to the party. I think Friday's pattern qualifies as a climatic buying program. This type of buying program is ripe for shorting.
I could be wrong so, I want to watch the first 30 minutes of trading first. If the price gaps down at the open, I may only wait 5 minutes to enter short. If the price opens relatively even, or gaps at the open, I will wait 30 minutes and make a determination at that time.
stockcharts.com[h,a]daclyiay[d20041120,20050220][pb50!b20!f][vc60][iut!Lah10,30,5!Lc20]&pref=G
Entry target: To be determined. Price target will be $22.50. Initial stop loss: To be determined.
dabum |
