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Thursday, November 02, 2006

Chart Study - SIRF, ADM, CRDN

It was a seller's market after the disappointing Chicago PMI and Consumer Confidence figures were released. The 3 major indices are now supported by 20 EMA. We'll have to see tomorrow if this support can hold.

Here are 3 chart studies using dummy style:

SIRF was dragged down together with GRMN which reported less than stellar results. SIRF gapped down and pulled back in 4th-6th bar to close the 5EMA gap. 7th bar was the narrowest range, which closed below the OR low. Entry on break of 7th bar low. The exit can be pretty tricky. Either partial exit at 1.38 Fib ext or full exit. If partial exit, your guts will be tested as SIRF broke the 5EMA on its way up & you may have closed the remaining position at this point. However, if you have held on to your initial stop (above 7th bar high), it will ride out to eventually close at a much better price at 1.62 Fib ext.

ADM reported earnings on Tue AMC. First 2 bars were bearish. Consolidation from 3rd-6th bar, moving closer to 5EMA. Entry on break of 6th bar low. Partial exit 3 bars later when 1.38 Fib ext is hit & close the remaining at the hammer-like bar near the 1.62 Fib ext.

CRDN reported earnings as well BMO. Gapped up and consolidation in the next few bars. Entry on 8th bar on break of OR high. As the price was moving very fast up (due to on-going upbeat conference call, you may decide to exit entirely once 1.38 Fib ext is hit (all within the same bar!) for abt $1.6 gain or hold out to 1.62 Fib ext for closure.

For those of you trading stocks which have just announced earnings, its good to know when the co. is having the conference call. Sometimes co. talks about guidance during these calls. The tone of the conference call can either serve as a reaffirmation of their results or some sort of a surprise may pop up which can derail its original path, and such move can be fast & furious! So do look out & watch the stock closely during the conference call if you have a position in there.


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