Joined Nov 11, 2007
1,458 Blog Posts

Intraday Setup: WAT

WAT is breaking above a bullish consolidation. This consolidation follows a bullish earnings report which saw the stock surge 10 points on strong volume. The stock is not yet overbought, and both MACD and Stochastics suggest the stock has room to move upward.

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The Daily Breakdown: GES

This evening’s installment brings us a high-flyer who is begging to be relegated to thrift store status. While the bulls were able to push this just pennies above the 200 day average, do not give their late-day bravado any credit.


 “C’mon, smack me around like the bitch I am. Strangle me with this rope; shove the bandanna in my mouth, and take me down 20 points.” Yes, even their spokesman is asking for a beating.

GES is at the edge of a precipice. As it has strong earnings and international exposure, it pays to be cautious. However, should this teeter much longer below its major moving averages, it will be game over. Even a strong earnings report and raised guidance could not push it above the 50 day average, so anywhere above that point makes a good place for a stop.

As you ponder this trade, consider that this is one of those stocks that has doubled many times over, and split, without a major correction. If it goes over the precipice, there will be years’ worth of holders who will be considering liquidation.

FD: I slapped their spokesman around today when it broke $46.00.

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The Daily Breakdown: EMN

While it would be fun to ride RIMM down 50 points, or take GOOG down 100, unfortunately the leaders usually do not give up easily. No, when shorting a stock, look for one with all the gumption already beaten out of it.

A good example of that kind of stock is EMN. After the July peak, the stock sold off, but found support at the 200 day moving average and the 61.8% retracement level. For the next 3 months, EMN bounced around the 50 day average. In November, the price was barely able to overtake the average, and EMN gave up on heavy volume.

The circled area on the chart shows that the 200 day average has now become resistance. At this point, shorting this stock should be like pushing old men down stairs. It will only take a little shove to get this one really falling.

A stop above 66 and a target of 57 will give the trader a reward/risk of 3:1. 

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The Daily Breakout: OXPS

This evening’s breakout is Options Xpress. While today’s print shows some indecision on the part of the bulls, all things considered, the price held up well going into this afternoon’s sell-off.

Use your favorite news provider to read the headlines released today concerning October numbers for OXPS. The news was bullish, and it helped to propel this stock to a new 52-week high.

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Intraday Setup: ALDN

Aladdin Knowledge Systems is attempting a breakout from a bullish consolidation. This is a thinnly traded stock, so trade it accordingly.

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The Daily Breakout: JNJ

The current market environment is limiting the number of successful Cup with Handle breakouts.  As conditions improve, the patterns will noticeably improve.

 This evening’s installment is Johnson and Johnson.

 Note the RSI(2) is near 98. Backtesting of over 8 million trades found that stocks with an RSI(2) greater than 98 typically underperform over the next 5 days. However, notice that JNJ had an RSI(2) >98 for the better part of September.

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The Daily Breakout

Surely there are traders out there willing to chase a good breakout. This one is for you.

Despite my own beliefs that now is not the time to be looking for breakouts, I felt that the inaugural day for iBankCoin.com deserved at least one good breakout.

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