I was going to post some charts of some select breakouts. I assumed that after the last couple of days there would be at least a half dozen. Wrong. My screens are showing no healthy breakouts. Granted, I didn’t screen for hours…
So what do I mean by healthy? I am looking for stocks that have broken out of a sound base, such as double-bottom, flat, or cup-with-handle, on volume greater than the average.
There are, however, many stocks that are exhibiting momentum. If one just looks at a three month chart, the stocks are gorgeous. But when the chart is expanded to look at 6 months to a year’s time, most of these are approaching massive overhead resistance.
While I’m still bullish, it makes sense to stay cautious when there is no leadership to speak of. As much as I want to find some hot breakouts for a Santa Rally, it may make more sense to just play the index double-long and double-shorts.
Since my search for juicy charts to post was stymied, I’ll leave you with one I like. I am long it, as of this morning, so make of that what you will.
The volume that has come into this is incredible. At this price, buy a few hundred shares and forget about it. Treat it as a call option. A run to the 50 day average would be better than a double.
I had trouble finding a few charts myself.
Kinda scary, isn’t it Cajun?
That was my opening buy this morning. I plan on forgetting about it too.
Goldie, bought the opening as well.
Yep, LEAPs with no time decay. Awesome.
I got two… AXYS and CX (sort of, if you use 1-month). And my old AFAM looks ready to fill the gap. I’d buy that on the next failed re-test.
Wood: Would you wait for a big gap (like the Q’s have from this morning) to fill before trying to buy anything?
Do you have confidence that this morning’s gap up was a breakaway gap?
TIA
I am glad to see you think oil is worth being long.
Short of a lifetime:
PPD
1. an employee-recruting pyramid scheme that will fade.
2. Monthly charts show a head & shoulder pattern
Of course wait for an optimal time to short it.
Wood, if you consider dollar volume on the DXO chart, it may not be nearly as impressive. For example, when a stock goes from $30 to $3, it would require 10-times the number of shares traded to equal the dollar value traded at $30. But dollar volume for DXO will also be skewed because, in this case, the ETF was probably off the radar back when it started trading…but something to consider nonetheless. Check DRYS for a better example, but the perception of value probably does attract higher volume as well.
Intersting these like minds.
The only “adds” I’ve made since Thursday (when I was already long TNA and BGU) was ERX and DXO.
Odd, no?
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I see a lot of breakaway gap ups on the industrials/materials. They’re pretty reliable.
I like DXO as well. There is risk that DXO can trade at zero and be liquidated. They calculate the price using an oil futures contract six months out. If that contract trades down 50%, by the end of the month DXO will equal zero and stop trading. Each month Powershares rolls the futures contract over to the next one six months out and the new contract is the start price for the following month.
Example – this month they are using the June contract which is trading around 60. If this contract trades at 30 at the end of Dec, DX0= 0
I like it, but you can’t just buy and forget. Keep an eye on the June oil contract.
Good luck!
Renn and Mdawsz- good points, both of you. Thanks!
Dale Anderson- spam my blog comments again with your wierdo playwright blog address in any URL and I’ll just load your blog into my spam filter. POOF. We’ll never have to hear from you again.
Wood–
Check out AMSF as a possible breakout op. I actually found it noodling around on the PPT.
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