Keeping an Eye on these Quality stocks

I still believe that we are in a wave 5 down....there is no doubt about this based on how DOW and SPX have been behaving.

However, I have a strong believe that we will eventually hit a medium term bottom soon between now and March.

So I am actually eyeing these stocks when things turn around.

Recently, some peanut butter has been hit by salmonella. Hence, causing some short and sell interest in SJM. But SJM does not only sell peanut butter and people still eat ! At the moment this stock is in a downtrend, I like this stock once a cyclical change into consumer staples begins.




Another interesting stock is SYY, at the moment this stock is at the bottom of the channel. This is a good candidate for a short term bounce.


Another good fellow to watch is MCD, short term target for this stock is 49 if the major indexes intend to go lower....Which is good because its so hard to get a good bargain at any normal times.


Here is another one, PG see how the stock has sold off from 75 to 48. This stock has broken the 5 year support, and the closest support is at 47...If that breaks too. Watch for this stock to head for 39. I would more or less expect a bounce once it hits 47 because this is a 50% fibo retracement line.

Some charts for Wednesday (25 Jan 2009)

We could be setting up for a short term rally at least until the end of this month. Looking at the Daily chart, SPX 801 could be the target.



When we drill down to a 15 minute chart, SPX will face some resistance at around 780. The game plan is simple, sell if it reverses around 780. Add to your positions if we get above. 780


Keep an eye on the EIA report today, I sense that XOM is about to make its move towards 74.47. This is a day trade only, you won't wanna risk any money holding this overnight at the moment. There should be some opportunities to day trade if it gets above 74.47.




GLD chart is suggesting for a pull back towards that 20 MA. If it falls below 90.49, could be the beginning of a huge correction....other wise you could attempt small longs on gold etfs or GDX.



I think GS has quite a fair chance of making it to 96. The smaller brother to watch is MS...both have held up quite well among all the financials. Not saying I am bullish, just some opportunities for a trade.



That about round up what I am watching. Happy trading.


Watchlist:
GS, MS, SPY, XOM, MOS, GLD, GDX

Charts are neutral - 2 Scenarios (21 Feb 2008)

The charts are now in a neutral posture.

If we get above SPY 78.56 most likely we are headed for the 200 MA which will act as resistance. On the other hand, if SPY breaks below today's low then the likely target is an area between 72 - 74 as mentioned in my previous post.

My guess is we might have some sort of month end window dressing activities. So I will look for opportunities to the long side first.

There are no extreme readings on the RSI or the stochastics, so it is very hard to tell whether we will gap up or gap down on Monday.



I am watching the consumer staples for any clue of a genuine rally. Somehow I notice that CL, CLX did not participate in the snap back rally into the close.

From my observation Commodities, Financials and Transports has better correlation to the SPY.


Watchlist:
SPY, IWM, FAS, MOS, CL, CLX, BNI

Possible bounce area (21 Feb 2008)

Im not in any positions, staying in cash and I don't think I am missing anything. OpEx days are like that, MMs tend to try to keep markets close to where they want it to be. Usually the first half of the day will bore you to death....but sometimes things do happen on the second half of the day.

We are very close to a confluence of fibonacci levels, technically we should get a bounce between
SPY 72 - 74.

U turn either this week or next week is possible

There is 1 more day left for February options, the market needed this pull back. Imagine if you were a buyer at SPX 850....How far do you think the market can go for a lasting and profitable trade?

The choppiness and volume of yesterday's trade are simple clues to where this market could be heading. And it is beginning to look like a "Bear Trap".

I hear a lot of "The market looks like it is about to Crash".....and a lot of naive traders seem to be led into buying more shorts. On the other hand, I don't see many buyers appearing yet at these levels... we are getting close to a key resistance of SPX 770.

All I can say is....this market is about to make a U turn and the technicals are pointing to either this week or next week.

I am starting to window shop for buys right now since so many stocks are dirt cheap for a short term trade.

I have my eyes on Commodities - Fertilizers, Consumer Staples, Financials
I hate gold because it is too speculative and there isn't any opportunity for daytraders.

Sorry I haven't been making any post lately, "Do you wanna trade in this kind of markets?"

Watchlist:
MOS, POT, XOM, PG, CLX, CL, GS,

DIA, FAS, IWM

Some ideas for Wednesday

I believe the stocks are again setting up for something with a selloff like yesterday. We have a holiday coming on Feb 16, so traders are taking their profits from the recent rally.

We could have a brief snap back rally tomorrow or a continuation of this sell off....

Here are some ideas:

I am interested to see what is the trend for BNI after reporting a nice profit, it is possible that this stock tradesideways. But if it breaks the trend line, it will be a great short opportunity.



GS has formed a classical bearish wedge, I am looking forward for this stock to make further pullbacks.


As for the DOW, it could break down anytime. If you want to act quickly in the event of the break of support at 78.29. Try getting some puts on DIA. The next level of support is at 77



XOM is very much part of the DOW and SPY, today is Oil day......keep an eye on the stochastics for a quick snap back rally before any possible decline.



Ok, I guess 4 ideas is enough for now. I bet you would not have much time for too many.... ;)

Remember, anything is possible....no biases here!

Before I forget, I suspect this recent selloff is also part of a strategy to draw the shorts especially people buying puts. You need to be aware that next week will be full of Futures and Options expiry...so don't get burnt by the time decay.

MMs have limited capital to short the whole market...so my suspicion is they are now focusing on the DOW component stocks...

So the DOW component stocks are very likely to lead the next leg down and it has begun....I will be looking forward to buy a lot of these names once 5th wave is complete.

Watchlist:
GS, DIA, BNI, XOM, AAPL, POT

Strategy for Next Week

Nice rally for this week, Im all in cash again.

Most of you will be thinking to go short ...thinking that the market has topped for this time around. Well, all I can say is "Let the market tell you where it wants to go".

Most of the charts are saying that stocks still have the potential to go higher or sideways for some time. I will be watching the SPY for any signs of sell off to the 85.0 support.

For the financials, I am now looking at JPM chart to grasp the direction of the market going forward. GS and MS should probably be taken aside for any bearishness due to speculation on their ability to repay TARP money.

The treasury secretary is announcing his plan for the bank bailout on Tuesday. So there could be a slight pull back on Monday despite the Stimulus package vote. If JPM can break above the 30.25 resistance, perhaps we could be looking a price target of 32.98 to complete an ABC pattern.


The UPS chart is looking good for further upside, perhaps a retracement to 50.55 or 52.74. Or else this stock should resume its bear trend on Monday.


I was in SLB last Friday and got out on time before it pulled back. Do be cautious when taking trades related to Crude Oil, I think many institutional buyers still pay attention to the fundamentals.

Needless to say, watch BNI..AAPL....GS for a pullback...

My watchlist:
AAPL, GS, JPM, UPS, BNI, UNP

A few ideas for Friday

Update 1: Crude Oil is retreating in the morning, watch for a rebound later today if any.

Here are a few ideas i have for tomorrow's trading.

Hopefully there will be an opportunity to buy on dips after the Jobs report. I am expecting a V shaped curve if the Jobs report turns out to be worse than expected.

STT retracing back to where it broke down, expect some resistance at around 29.5 on its way up to around 35

XOM could be on its way to around 81 it it breaches previous high. This could easily be converted to a short opportunity depending on the overall market.

SLB still has plenty of room to run, it may encounter some minor resistance at around 46. before continuing its journey to 47.5


Not forgetting BNI, it looks as though this stock could be trying to fill that gap. Keep your eye on the stochastics.


SOHU is a great buy on any pull backs because it still has room to run




There are several Steel names that are great for short term play like X and NUE. But it is not really my cup of tea, some of you might wanna take a look own your own.

No trend in key sectors

SPY is still in Neutral territory, it closed slightly down as compared to yesterday.

The transports 20 MA still needs more time to show us what the main trend is. So Im Neutral on this because it is quite close to the 200 MA and still above the 50 MA.


Crude Oil retreated back to its support due to high inventory numbers reported by the EIA. So fundamentally, the demand has not caught up with supply.

Here is a chart of DIG. As you can see the 50 MA and 200MA are flat....Meaning that it is neither a a good short or a good long for now.


My strategy:
Im all in cash for now, I need to see more signs of the main trend to commit more capital in any trades.

SPY is in Neutral territory

SPY has some further upside after today's rally. The key resistance to break to head towards the 90s is a region between 85.5 to 87.5. So to go short, look for failure of a test of resistance in that region.

To be ultra bearish would require SPY 80 to be broken.


The transports, oil majors and the tech sector led the rally today. Financials are currently in consolidation mode. I think the transports hava some room to go higher now that UPS has reported reasonable earnings. I would also watch the Rails to rally further.

Watchlist:
GS, BNI, UNP, AAPL, XOM, CVX, OIH