Titanium Metals is breaking down.
It’s not hard to forget last Monday’s big drop in the Dow, and until the opening bell I have no clue where the market will lead us. Every index is showing weakness right at the supports. It seems there is a lot of volatility at these points as the market struggles to try to keep the index above the water, so it’s hard to tell if we’ll get a green or red day.
For that reason, I’ll be focusing on trading in the direction of the market. In an effort to keep things simple, I’ll be using Titanium Metals (TIE) and Empire Resources (ERS).
Titanium Metals (TIE)
Currently TIE is attempting to narrow the consolidating channel, but until that happens keep an eye on $35. I actually thought TIE would split at $70 in May, but it went off to the ninties making me feel like a fool. Well, now it’s below $70 (split-adjusted) for the fourth time since split, and I’m thinking TIE just might break down. Still, the volume shows this stock to be stubborn and strong; but you have to admit, there were a lot of late people who joined the party up in the $90s, so let’s see if they don’t quit yet. I’ll play it by this mode:
- IF (TIE crosses from < $35) THEN (buy LONG at $35.00, sell >$36.00)
- IF (TIE crosses from > $35) THEN (sell SHORT at $35.00, cover < $34.00)
Based on the overall market situations, I’m more inclined to short TIE, but any change of direction in the markets will mean I would need to switch.
Empire Resources (ERS)- this is one buy-and-hold stock you must stay away from. ERS was a classic overhyped and overbought stock; you might even call this one an Icarus. Yet, there has been no big change in fundamentals so the selling has really gotten out of hand. The only way I will play this stock at this point is to go LONG on a day trade. Shorting these fast falling stocks is a bit dangerous, since a spike here and there is almost inevitable. So, even though this stock may continue to slide, be alert for those occasional spikes and buy long for a short period.
Other plays:
- Britesmile (BSML)- was up 51% after hours Friday, extending the stocks push to over 100% gain in about 5 days. I wish I could short it tomorrow, but it’s under $5 so my broker won’t even let me. Anyway, I’ll keep an eye for an extended rally in the first hour, if it’s not there then it’s off the watch list.
- Taketwo Interactive (TTWO)- This stock is a mess, and a bunch of downgrades over the weekend will hurt this stock more. I wanted to short this stock at $16.00, so based on all my research from that sentiment, I still feel a medium term short over $13.00 is good. I don’t really play Play Stations and XBoxes, but it’s so obvious that the Grand Theft Auto trend is dead. Everyone wanted that game, but now it’s just a normal game. In fact, I went to the game store last week and I saw they have a new Grand Theft Auto game out, but the marketing campaign was so weak that not many people knew about it.
