Tomorrow, I’m not really looking for some 10-footers. I’m taking out my longboard, and I’ll catch whatever 2-3 footers that come my way. Which beach will you be surfing?
NORTH SHORE: Bear killer? or Profit taking? Tomorrow, Surf with the leaders! These stocks had 1) a powerful rally yesterday, and 2) showed signs of profit-taking in the final 30 minutes of the day. This is typically a bear trap, but remember, Thursday could be a bail out day for momentum traders. Look to get long these leaders if they gap back up to their trend channels. You will know if the rally will continue if it gaps up on low volume, then volume accelerates when the price returns to the channel… that’s a sign the bears are covering, and the bulls are re-buying. Otherwise, stab these leaders in the back and short them if they fail to return to yesterday’s channel! Here’s your list:
- Almost Family, Inc. [[afam]] – a little extended, but the trend is still up. AFAM went as high as 41, then retraced back to 39, giving you a nice $2 channel to day trade. I will either a) get long above 39.69, or b) short if it test then fails 39.69, but enter the short at 39.05. Comprende?
- MercadoLibre, Inc. [[MELI]] – end of the day profit-taking created a 3-hour support at 35. Get long above 35.60, or start shorting at 35.03.
- Cal-Maine Foods, Inc. [[CALM]] – this small cap stock bounced off of 42.43 at end of day and rally a whole $1. Get long at 43.82, and short aggressive at 42.09. This one could see heavy profit taking.
SOUTH SHORE- True Religion Apparel, Inc. [[TRLG]] earnings play, thanks to Mac. The company reported stellar earnings. It has the rare combo of 1) beating estimates, 2) raising guidance, 3) heavily shorted (about 50% of float), 4) less than 10% from 52-high. I would like to see how the bears handle this… will they squeeze? And conversely, if TRLG doesn’t move on this great earnings report, then TRLG gets on the swing short-sale list (for next week).
WEST SIDE- Overstock.com, Inc. [[OSTK]] . How many nails do we have to put in this coffin? Take a look at OSTK’s 9-month chart. There is a story being told here. And there is NOT a happy ending. I don’t know how long this bear bounce will last, but I will use that 21.75 point as a resistance for a swing trade. If you want to day trade OSTK, look for “bail-out” Thursday, where the longs will exit before the weekend. So far, OSTK is up 50% in the past 3 weeks, and that was off of one of the ugliest conference calls handled by a CEO in the history of CEOs.
EAST SIDE- Shippers! I commented about shippers yesterday. Use the baltic index and DryShips Inc. [[DRYS]] as your correlation-“stock.” I will only play the long side here. If I see those indicators point up, then get long some of the beat-down shippers like TBS International Limited [[TBSI]] , Diana Shipping Inc. [[DSX]] , or Excel Maritime Carriers Ltd [[EXM]] . If, however, DRYS gets rejected at the 70 spot, short TBSI, which overshot by a few percent yesterday. This East Side trade will probably work best in the morning.
Other plays: FSLR might break 270 here. If it does, look to get long JA Solar Holdings Co., Ltd. (ADR) [[JASO]] or Canadian Solar Inc. [[CSIQ]] which were one of the best performers in the solars yesterday. I just can’t be super bullish about solars right now.
See you at WallStreaK! Maybe.
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Don’t use bmp for surfing, use jpg or png.
Try catching a nice ride with ACI but don’t get wipe out.
Really? Why? loads too slow? get a faster computer. Lol. Nah. I’m going to back-test today’s surf spots. Today actually had some pretty clean setups!
– long TRLG
– short TBSI
– short OSTK