Good Earnings, Good Squeeze

Today I watched the market rally nicely. Yes, there are ugly rallies, then there are nice rallies. If you watch the charts of the Dow, Naz, and S&P you’ll notice nice steady rise. From a pyschological perspective, I can imagine majority of investors are putting money in one after the other. How’d I come to this conclusion? Simple, the light volume we saw on Monday was a “sideline” day, and now that we’re midway through the week, the coast looked clear. Yes, investors were searching for any news to feed on, good or bad. Today we had good news from big companies so that seemed good enough to spark a rally. So there we have it- we had a rally on bad news (CPI data last week), and a rally on good news (earnings window dressing), now all we need is that elusive “rally on no news” that completes a confident and solid bull run. When the market rallies on no news, then you know that people are investing in fundamentals- the way it should be.

Anyway, I’ll be taking the week off early since I’ll be camping this weekend. So, I’ll just check in at the close to see any swing trades I can make for the rest of the summer. I’m sort of mad at myself for not catching Medifast (MED), since I knew it would “return back to low teens” before taking off to new highs. Anyway, I’m looking for a new entry point- anything below $20 and I’m in! Here’s my best candidates for my next trades, I’m treating this as a basket trade, so as a group I’m hoping to get a descent gain (some may fall hard, but majority will rise):

• Medifast (MED)– Buy Limit < $20 / Sell target $25 / Stop loss $17.00
• LifeCell (LIFC) – Buy Limit <$28 / Sell target $32 / Stop loss $25.50
• Sirenza Microdevices (SMDI)– Buy Limit $11.00 / Sell target $15.00 / Stop Loss $10.30
• Komag (KOMG)- Buy Limit < $42.00 / Sell target $46.00 / Stop Loss $38.00

Many of these stocks are on the brink of becoming popular on the street, so I’m hoping to get in before everyone else does. Plus, each of these companies have great products in strong industries.