PANIC!!! PANIC!!! PANIC!!!

I personally enjoy days like yesterday. The reason why - people panic and sell for all the wrong reasons -- EMOTIONS. Sure the Asian market tanked, but the loss in our market was not really as fierce as overseas. One thing I did notice about my stocks was that they took a hit yesterday, but they rose actively again today.

Remember WOOF which was going to be added to my watchlist? It hit support at $36.50 and has stayed there. That is a notion that the stock is in a buying area since it did not have the sell-off as the other stocks did. Watch BSM closely too since the $7.50 is being used as support as I mentioned before. Watch CME and BOT very closely. Obviously some big $$$ buyers decided that both were in a prime buying area since they both rebounded on higher-than-average trading volume. In fact CME had a higher volume of trading and a 5.5% jump today than the volume and price drop on Tuesday. AGR is a stock that completely bucked the steep Dow loss yesterday and continued to move up today. HOLX, NTGR, NSTC, WW, LHCG have also held out. So, don't fret. It is easy to get caught up in all of the hoopla of the "worst down day since 9/11," blah, blah, blah, blah, blah..........

I do have to admit. Losers include TAM, UGI (although I did not buy in since it did not break above $28).

The best thing you can do at this time is to look at your INDICATORS and trade them. Don't trade the price of the stock or what happened in the overall general market. Most of my stocks held out and lost only a little when the panic was overtaking the market and today, they got me back a lot.

I have to mention that a stock that seems to have held out and is going to make a move. RVSN is in the same industry as NTGR and is currently in a "high-handle" if it breaks $23.30 in high trading volume, watch for a higer move.

Good luck trading.
JD

MISSED OUT ON MCO.

Well, I placed an order to buy a put on MCO in the morning and walked away from the computer. I was hoping to be filled on it, but the stock dropped again like a rock and my order wasn't filled. Oh, well. Gotta remove emotion from stock trading. Also, I was so focused on MCO that I also did not get in on any trade with BOT or CME. CME dropped again in a little bit higher trading volume. BOT went no where. One doesn't always get to be in on the trade they want.

Overall, today was a pretty quiet day on the market. (Most Friday's are.) Next week, Investor's Business Daily is offering free access to their website at www.investors.com so I would give this a good look-over as this is where I got a lot of my ideas.


I want to also talk to you about breakouts. Breakouts as defined by IBD are: The action by a stock when it surpasses its resistance level: usually a price ceiling at which the stock has previously encountered selling. In many cases, but not always, that resistance level is the highest point in a "handle" portion of a base pattern.



A few days ago, I mentioned that HSR was going to "breakout" if $12.10. If you click on the chart and look at it you will notice a cup and handle formation that began in October, 2006 with the beginning of the left side of the cup and the bottom occurred in early November. The stock then rose in price creating the right side of the cup and a "handle" was formed from mid-January until mid-February. The breakout occurred when the high in the handle ($12.00) was passed and was accompanied by higher-than-average trading volume. That occurred on February 20th. If you get to know these patterns, you trading skills will increase as well as your pocketbook.

Later, I am going to discuss drawing a trendline after a breakout.
PLAN: Add WOOF to watch list.
Good luck trading.
JD

CME, BOT and MCO BREAKING DOWN

The overall market was mixed, but some stocks are weakening and others are breaking out. In this current market, it may be wise to be playing both sides of the aisle meaning that one stock should be "long" and another stock should be "shorted." Google those words to find out what they mean when associated with stocks.

CME appears to be weakening as it has broken down below a support level on higher trading volume. The word "sell" comes to mind if you own it. One could also buy puts or sell calls. Sme with BOT. Based upon one of my best searches, these downturns may be big.

MCO is a stock that appeared to be creating a cup and handle formation; however, it is falling down. It will probably have more momentum to the downside if support at $67.50 is broken.

AGR seems to be using $19.00 as support. Did so 3 times in the past few months. Spit out a buy signal in one of my Metastock searches. Good thing I am already in on it.

PLAN: BUY PUTS ON MCO. Buy bear put spreads on CME AND BOT (WHEN BUYING PUTS, I WANT THE MARKET TO GO DOWN SO I MAKE $$$ AS THE STOCK DROPS). BUY AGR IF NOT ALREADY DONE SO.

Risky trades - watch TBV (break out above $6.15), or GEMS (break out above 2.90)

Good luck trading.
JD

THANKS AGAIN, HSR. HOLX BREAKS OUT.

HSR continued its winning ways again today, rising another 7% today which makes it 16% in two days. Not bad at all. If one were to invest in this stock alone, you could accumulate a 20% annual interest by selling out tomorrow and gaining your 5% interest in your investment account for the rest of the year and beat the historical average of 10% per year that the major indices put out. I'm not going to. After all, I am a trader that wants to wallop the market, not just beat it.

HOLX finally broke past its previous high from the breakout a couple of weeks ago. Yeah, patience does pay off. Back of 2/7/07 I mentioned that it sucks to wait, but my patience paid off. Glad I picked up those extra shares at $53.50 like I mentioned.

NTGR fell back in lighter volume. That's OK. Same with NSTC. Still waiting for WW to perform like HOLX did and breoukout above the previous high. In fact, I suspect this current price of $47.90 is going to act as "support" and the stock may take back off from here. In fact today, I bought some April $45 calls since implied volatility is lower than historical volatility. I am waiting for the breakout.

Today's action on TAM wasn't too encouraging. Drop in price on higher trading volume. Maybe the 50 day moving average isn't going to act as support.



If MR breaks out above $26.85 on high trading volume, consider it a buy. Remember - patience. If WNR breaks out above $27.75 on high trading volume, consider it too a buy.



I have found an interesting formation on a stock. UGI has gone through an 20 month cup-and-handle and it looks as if it is in the middle of the handle and the stock is trying to decide which way to go. Let's look at a 2 year chart first (double click the chart to make it bigger). The primary things to notice are that: 1. $28.50 was the previous "resistance" point in June, 2006.
2. During that time frame, it corrected the usual 30% that IBD says stocks do when in a cup and handle. 3. It came back up to the previous high and tested that level and has backed off. This appears to be the handle. 4. If you look at the most recent price action, $26.50 has been used as "support" twice in this "handle." If the stock breaks back out above $28.04 in higher-than-average trading volume, this would be considered a breakout.

PLAN: ADDING LHCG TO THE WATCH LIST.

Good luck trading.
JD

THANK YOU HSR

HSR took a little while to get going, but it closed up more than 9% today. It just broke out of a cup-and-handle, and has a few more indicators screaming "buy." 1. The MACD crossed over while above the zero line. 2. The stochastic indicator just came back out of oversold territory. 3. The accumulation/distribution ratio (A/D) is increasing. That means the stock is still within buying range up to $12.70, or 5% above the previous high in the "handle" which is $12.10. Those are the IBD rules.

NTGR tacked on another 2.5% to close above $29.00. It is now out of buying territory for me.

HOLX and WW seem to be consolidating now. I was hoping they were going to make the move much like NSTC has. NSTC is up 2.5% from my original buying point and still has good trading volume coming back into it.

I think TAM is going to use its 50 day moving average as support and hopefully bounce back up. If it jumps back above $32.75 in high trading volume, count me in.

PLAN: Buy HSR up to $12.70. Buy TAM if breaks above $32.75 in high trading volume.

Good luck trading. JD

38631529 Sell, 38628670 Sell (Secret codes for me)

STOCK SEARCHES

I know that I am a technical trader, but my primary basis is fundamental analysis. The one thing I cannot stand is performing the fundamental analysis. What is their P/E ratio? What is their ROE? blah, blah, blah. It's a time thing. My life is as busy as I want it to be and I don't need to spend my extra hours researching a company's fundamentals. So, where do I get my stocks if I don't do the research? www.investors.com, that's where. For something like $250/year you can get a subscription to the newspaper or the internet version. (Yeah, it's a plug, but if someone helped me make 96% in one year, I think I can give them kudos) Just check out their website. The education area is free.

Once you have found a few stocks to follow, go to www.stockcharts.com and watch them. IBD is really good about informing you of stocks that look good by looking at the "Daily Stock Analysis" on the home page. Then you need to decide what indicators you want to trade. You could also look at chart patterns, but this is more time consuming. Again, I am looking for minimal amount of time researching charts. MSN Money offers a free stock screening program and probably one of the best is the 52 week high screen. Stocks that are making new highs will probably continue to make new highs.

The other option is to buy a stock screening software where you can program the software to search for your certain parameters. Personally, I own Metastock and love it. That is where I am getting my searches from that I mention in this blog.

This should give you a head start in getting investing so go to it.

Good luck trading.
JD

P.S. The underlined words in the blog will send you to the link if you click on the underlined word.

HSR IS LOOKING GOOD

One of my searches popped up HSR after Friday's close. I mentioned it a couple of days ago and I think it is ready to make its move again. Even better if it pops up above $12.47 on higher-than-average trading volume would be a bonus.

Thank you NTGR. Closed up $1.48 from the previous close which was near a 5% move on high trading volume. Originally bought at $26.83 and closed today at $28.32. Realizing that my searches are helping out. The same search that I used for NTGR, gave me HSR. Let's see if HSR will follow the same route.

My confidence is waning in LQDT. It has risen in price, but trading volume is dropping. The exact opposite of what you want to see. Don't think I am going to stay in this one.

What, oh what, is WW going to do? TAM, too.

BSM is sneaking back down to $7.50. If trading volume continues to back off, that may be a good place to buy.

I think it is going to take HOLX a couple of weeks to work itself out of this pattern and head higher since $56 was a previous high back in April, 2006.

BUY: HSR

Good luck trading.
JD

LOT OF CHANGES TODAY

I am glad I made the recommendation to get out of LTM. It has now broken down below the 50 day moving average. LTM made me 5.7% on the stock alone in 1 month. If you tack on the covered call that made a profit of $30 per 100 shares it added on another 0.6% gain for a grand total of 6.3% for a one month span. I'll take 6% per month, thank you.

I have also sold quite a few other stocks today after some good gains. FMD and VIVO are out. (Click on the picture of the stock to look enlarge it.) Got a run of 14.89% with VIVO; however, the drawback was I lost 11% of that by selling covered calls. So, my total net gain was only 3.59% over the 3 months I held the stock. What I should have done was bought back my covered calls when VIVO broke out in mid-January. (NOTE TO SELF: Even if the premium has gone up on the covered call in a breakout, buy it back and ride the stock higher.) I would have much more preferred the 15% gain.







FMD gave me a 40% gain over 6 months even after the 2-for-3 split.

It is time to take on new stocks that are breaking out rather than breaking down. So, NSTC was bought today at $14.20 and $14.32. The reason for my buying was my indicator that I use for breakouts popped up on my search. The reason for the upmove was very positive earnings report.

I purchased NTGR yesterday at $26.83 and glad I did. The stock gapped up 3% as of this morning. My reasoning behind buying that yesterday was the following: 1. it has used $25.50 as support 3 times in the past few months. 2. The stock gapped up in late October to $28 and has "consolidated over the past few months 3. Higher trading volume was coming back in to buy the stock 4. the search under my second trading system showed that NTGR was in an oversold area and possibly ready to move back up.

Also note the LQDT has used its 50 day moving average as support and seems to be moving back up again. I still have no idea what is going to happen to this stock.

WW seems to be holding its own after breaking out. It has to digest this fast run-up before moving higher.

Good luck trading. JD

LQDT ?, BUYING NSTC, NTGR

LQDT bit the big one a few days back, but I think it is a lot of "shorts" covering themselves. We will just have to see. The wide fluctuations are enough to cause my EKG to fluctuate, too.

BSM took off like a rocket. Too bad I didn't get in on that move. If it floats back down to near $7.25, I am gonna get back in.

Taking BIDU off my watch list.

BUY: NSTC, NTGR, WW

SELL: LTM

Good luck trading.
JD

TALK ABOUT TEMPERING THE ENTHUSIASM

I hate days like this in the stock market. High trading volume and a down day. From my point of view as a technical trader, this day sucks. I have noticed on the indices charts (SPY, DJIA, QQQQ), the markets have made some interesting moves in the past a couple of weeks. Before I make a statement on what I think, let's look back on Nov. 2006. I had a post that looked like the market was going to top out. One of the big reasons I said that was that the MACD had a negative divergence. The markets avoided the negative divergence and continued to move upward. Currently, I still see the markets making a downturn if the SPY breaks below the 50 day moving average on heavy volume. Today could be a precursor.

LQDT did well for me today. It was up as high as 10% versus yesterday's close, but eeked out a 5% gain overall. (I'll still take it)

Good thing I'm not in on DIVX. On an earnings report, it decided to tank. I am pitching this one of my possible buy list.

TAM dropped 3.29% on lower than average trading volume. I am still in on this one.

I have to chuckle on PACR. Let me tell you of a scenario that panned out for me and this may be for more advanced traders since I am going to spit out trader terminology. I have been holding a calendar spread on PACR for the past 3 months with a July expiration. My intent was to close the near-month call when it broke out above $30.58. I did such that when it broke out so that left my June 25 call open. As you can see for the past few days it really rose. I took a look at a 1 year chart and saw that $33.25 was going to be a resistance point. So, when the stock got near $33.25, I sold a March $25 call for $8.50. The next day the stock took off and my March 25 call was as high as $9.00. Little did I know that PACR was going to come out with an EPS report the next day. (NOTE TO SELF: CHECK WHEN EPS REPORTS ARE COMING OUT) I checked my options early the next morning with the expectation that my PACR March 25 was going to be near $10. Ha, ha, ha. I beat the market. Guidance was lower than expected and the stock dropped 15% after hours. My contract was now worth $3.70. I'll take and overnight 55% profit any day. I am still holding that March $25 call with the expectation that PACR will head south.

Watch BSM.

BUY: WW. Plain and simple. It is above a previous level of resistance on high trading volume.

SELL: ISE, PRFT. (Other options include buying puts.)

Good luck trading.
JD

I LIKE LQDT

Glad I put in the good word for LQDT. I hated it in the morning b/c it opened down 6.5%. I laughed and was glad I didn't set an order to buy at market. Just for giggles, I went back in near with an hour to go in the close of the market and noticed that the stock was now UP 3% for the day which meant a 9.5% turn around since the beginning of the day. So I bought some shares just over $21. Glad I did. The stock is still within a buying range up to $22, but after that it is out of my hands.

DIVX may be pitching a bull flag. TAM bounced of its 50 day moving average much like a 250 pound gorilla on a trampoline so that makes it an ultimate buying candidate since a doji was formed yesterday and there was an engulfing bull today.

I want HSR to break $12.47 on high trading volume before I make a move back in.

Check out WW. I can't buy in but it just had huge trading volume and is near its previous 52 week high.

Add to watch list: BIDU

STILL WAITING ON HOLX, SNUCK IN ON AGR

Patience is a virtue, but a pain in the @$$ when waiting for an uptrend to continue. HOLX just doesn't seem to want to make the move up yet. Oh, well. Rome wasn't built in a day.

I just couldn't resist jumping in on AGR today since I hope it will bounce of the 50 day moving average after the big "gap-up" in early December through the $19.50 mark. I bought Jun $22.50 calls for $0.80. We shall see how they do.

DIVX keeps dabbling around too, so I will have to see what happens with it.

TAM has put out a "doji" candlestick. If the stock rises tomorrow, it should head back up a few $$.

For those of you holding onto ICE, it may break the upward channel in its trendline with another big move like today's. This could me the top of the run for ICE.

LTM also put out a doji candlestick and has garnered support around $53. Watch for an upward price movement.

So my buy potentials are: TAM, LTM, DIVX. Already in on AGR.

Buying LQDT. Just look at the charts and see if you can figure out why.

Possibly selling ICE if there is a big run up soon.

Good luck trading.
JD

p.s. HSR may be ready to make another run.

GOT IN ON HOLX, BUT LEFT DIVX ALONE

Got in on HOLX today. I waited to see how DIVX was going to hold out and I liked its lower price in lower volume, but I didn't pull the trigger because I like the action of HOLX better due to the high trading volume a few days ago.

I noticed LVS has dropped back down to a nice support area. This stock has been on a tear, but has it reached its correction point? Don't know. Only the next few days will tell. I am not making any moves.

TAM is showing signs of a hot breakout. If it passes $34.10 on high trading volume I am in. Same story on AINV. If it passes $22.94 in high trading volume, I'm in. AGR has come back to a nice support area after a previous gap up. If I had a few more $, I would try my luck, but I can only do so many trades.

For those advanced traders out there, VIVO is showing signs of slowing down and I am going to play a one month Bear Call Spread and collect a little premium and hope the price moves sideways or falls so I can keep the premium.

Good luck trading.

JD

WATCHING THE RUN, BUT WAITING FOR THE FALL

This has been one of the best runs in the market since the plop in 2001. I have enjoyed it. ICE has given me a nice 88% run. FMD has given 76%. PACR has finally broken out of a cup and handle. WCC is going to come out of its cup and handle if it passes resistance at $68.63. DXPE is showing signs of accumulation and is in a buy area if it can rush past $36.71 in high trading volume. LTM has broken out of a cup and handle and is currently resting a little bit. Let's see if this one will go higher.

What I am going to do from now on is hold of on the education part of trading. I am going to say only my actions such as buy or sell. The education stuff will come later since I have been too busy to keep up with the education thing.

BUY
I am going to buy HOLX around $55.50. I am going to try and get the best deal I can. If I can pick up more around $53.50, I am going to do that too.

I am also going to try and pick up a few of DIVX around $24.

SELL
Nothing to note.

Good luck trading.

JD