Trading Watchlist: JEC, DO, PCLN, HOC

JEC. Strong stock with 50 MA supporting the fall. Selling pressure appears to have eased (see decreasing selling volume) and it printed a strong bullish bar yesterday, closing above a previous resistance.

PCLN. Another nice looking stock that has both the horizontal and diagonal support. Strong bullish bar that closed back up above 50 MA yesterday on higher than average volume.

HOC. A very well-behaved child that got whacked in the sell-off. Support at $65. It almost formed a tweezer bottom and bullish engulfing pattern yesterday.

DO. A hammer-like bar formed yesterday with support at 50 MA and the $100 level

As usual, please do your own due diligence and check for earnings date.

Tags: simplyoptionstrader, stock watch, technical analysis

Turn Around?

What a massive sell-off we've had last week! All the sectors were in blood red and what to expect this week? Lotsa key economic data will be released this week. While the market continued to make new lows last Friday, there is a slight improvement in the number of stocks making new 20 day low compared to last Thursday. But that figure is still very weak. There could be continued selling pressure early part of the week before we see the tide turn. Remember to wait for confirmation of turn around before going long because you don't want to catch a falling knife!

Near term support for:
S&P 500- 200 SMA
Dow - 13,200
Nasdaq - 1,533 (also near 50% Fibonacci retracement of uptrend from Mar to Jul high)

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Mon:
Notable earnings: CCJ, APC, CG, CF, EXP, JAH, MNST, MOS, VCLK, VMC, RSH

Tue: Personal Income and Personal Spending, Core PCE Index, Chicago PMI, Consumer Confidence
Notable earnings: ADP, AVP, BWLD, CAM, GM, FEIC, CMG, COH, CVH, FSLR, BGC, GPI, IMCL, LCAV, LIZ, MRO, NVT, SIRF, JOE, UA, WFMI, VLO, UTHR

Wed: ISM Index
Notable earnings: AEM, ANDE, BYD, BEC, CI, CTSH, SBUX, RIG, TRN, DIS, URI, SUN, WTW, THQI, SOHU, RYI, REG, OSK, MA, KFT, GYI, GRMN, LAZ, IVGN, EDS, ERTS

Thurs: ECB Interest Rate announcement
Notable earnings: EYE, CKP, DNR, IP, MGM, RDC, PDE

Friday: Unemployment rate, ISM Service
Notable earnings: EOG, PG

Tags:simplyoptionstrader, earnings, economic calendar, technical analysis

What Do You Expect After Tuesday's Selloff?

Here's an interesting poll by CNNMoney.com. The results? No clear indications, which probably reflect that most folks out there are somewhat confused and scratching their heads, although a third expects consolidation and another one third still bullish.

StockWatch: RYI, AA, VLO

AA - A nice up trending stock that has pulled back recently to 50 MA support with a hammer. Note the 50 MA provided good support in the last three occasions.


VLO - Currently range bound and trading between the area of $77.5 and $71.7. Right now sitting at support.

RYI - Appears to be breaking out of descending triangle.

Btw, CSCO has broken out of $30 level with above average volume.

*As always, please do your own due diligence and check for earnings dates.

Tags: simplyoptionstrader, stock watch, technical analysis

More Earnings

We've got truck loads of companies announcing earnings this week and economic data is light early part of the week.

Mon:
Notable earnings: AXP, AMLN, ACI, CNI, HAL, NFLC, STLD, TXN

Tue:
Notable earnings: AMZN, T, BNI, BOBJ, CME, CRDN, CERN, DD, CFC, SWK, CAKE, UPS, UAUA, X, WAT, WBSN, NBR, LM, SNE, SVU, PCP, PEP, NETL, NTRI, OXY, HOKU, NOC, PRAA, PNRA, ILMN, CBH, CHKP, JEC, CTX, CENX, LRCX, LXK, LLY, EMC, ENR, MICC

Wed: Existing Home Sales, Fed's Beige Book
Notable earnings: AFFX, ACLI, ATI, AKAM, ACL, APD, ARG, BIDU, AAPL, COP, ESRX, FFIV, FLIR, WIRE, GD, FORM, GSK, FCX, WFR, PFCB, RAI, RYL, SLAB, VAR, ZMH, ZBRA, TZOO, PLXS, BA, SYMC, QCOM

Thurs: Durable Orders, New Home Sales
Notable earnings: MMM, AMGN, AET, BZH, BDK, WEN, GPN, DRIV, ELN, CLF, WDC, LCC, TDW, SU, RVBD, RMBS, F ,DECK, BOOM, BG, RACK, POT, MFE, KLAC, K, DO, CYMI, BMY, NVDA, VSEA, VRSN, XOM

Fri: GDP
Notable earnings: CE, BHI, IR, ITT

Tags:simplyoptionstrader, earnings, economic calendar

Japanese Candlestick Charting Techniques

I've completed reading "Japanese Candlestick Charting Techniques" by Steve Nison not too long ago. Actually, it is a book that I should have read long ago. I knew the common candlestick patterns like hammer, hanging man, doji, engulfing pattern etc, and I also use them in my trading, but I never knew the story behind them.

The book is easy to read and digest. Steve Nison first gave an historical background on candlestick. It is amazing how these patterns are born and used so many years ago by the Japanese and yet only introduced to Western hemisphere less than 20 years ago. He then covers each of the candlestick patterns such as reversal patterns (hammer, engulfing, tweezer tops/bottoms, harami etc), continuation patterns, stars (morning star, evening star, shooting star etc) and doji.

In Part 2: Convergence, he complements Japanese candlestick patterns with western techniques such as trend lines, moving averages, retracement, oscillators and volume and he recommends the reader to do so. This is because candle signals are more powerful if they also confirm western technical signals. Also not forgetting that candlestick patterns do not provide price targets and one has to look to trend lines, support and resistance, and retracement to do so.

What I liked about this book is that Steve Nison explains the patterns in terms of market psychology. And he is clear that while candlestick patterns are useful tools, a trader should never base their trading decision solely on a single pattern. A trader should also look at the pattern in context of the overall chart, i.e is the reversal pattern also happening near a support or resistance area etc? They are many examples in the book and he will teach you what to look out for to increase the likelihood and what type of patterns or situations require additional confirmation.

A must-read for all traders out there.

Grade: A

Tags:simplyoptionstrader, trading book, candlestick pattern

StockWatch: CSCO

CSCO has formed a base and is approaching a very important milestone - the $30 mark. It touched $30 briefly yesterday, but was not able to break out. From the 10 year chart below, you will see why $30 is an important mark for it to clear - it was a previous resistance way back in 1999 and at the start of 2004. If it is able to breakout of $30, next target will be $35.

Tags: simplyoptionstrader, technical analysis, stock watch

Earnings in Full Swing

The bulls charged and emerged victorious last week. However, Dr Brett noted that many indicators were not confirming the recent price strength. Let's see how the market acts this week as earnings season start to intensify with many bell weather stocks reporting earnings. Not forgetting there will be several speeches by the Fed Chairman and Presidents. And also its Options Expiration Week!

Mon: NY Empire State Index
Notable earnings: GWW, ETN, NVLS

Tue: PPI, Industrial Production, Fed President Hoenig speaks about the economy and the monetary outlook.
Notable earnings: YHOO, KO, USNA, MER, PPDI, JNJ, INTC, JEF

Wed: CPI, Building Permits, Housing Starts, Fed Chairman speaks on semiannual monetary policy.
Notable earnings: ABT, MO, EBAY, JPPM, JCI, JNPR, NE, PFE, UTX, DST

Thurs: Fed Chairman to speak to US Senate Committee about banking, housing and urban affairs, Leading Indicators, Phil Fed, FOMC Minutes
Notable earnings: AMD, BAC, COF, CY, ISRG, GOOG, HOG, HON, GILD, ITW, SNDK, MOT, MSFT, OXPS, NUE, STX

Fri: President Poole speaks about subprime mortgages
Notable earnings: CAT, C, BSX, SLB

Tags:simplyoptionstrader, earnings, economic calendar

Where to Get Sector Rotation Information?

I've been wanting to talk about this, its been on my "to-do" list to share this information with you, but somehow never got on to doing it until now.

This is not a post to teach you how to read sector rotation, but rather where to get information on it. Once you click on any of the links below, you will realise it is fairly easy to see the "in" and "out" sectors. So I've gather a summary of links here and you decide which one you like best to use:

Sector SPDR PerfChart

Sector Tracker

Prophet Industry Ranking

MorningStar Sector Returns

BusinessWeek Sectors & Industries

Wall Street Journal's Money Flows: Market & Sector Overview
Edit: The wsj.com link is now working, thanks to reader reno for providing the link.

Edit: Additional links offered by readers (I will add on along the way if there are others suggested by readers.)
Barchart.com
Marketgauge.com

If you know of other links on sector rotation, please chip in here. Thanks.

Corey from Afraid to Trade has very good posts about sector rotation regularly and here is an example by him. My friend, OP just did a sector rotation review, have a look there.

Related post: Market Carpets by StockCharts.com

Tags:simplyoptionstrader, sector rotation

Beautiful Charts

Here's some nice trending stocks...some of them have just broken out. Keep them in your watchlist.

RVBD. Previously mentioned in my watchlist. Has been consolidating for a while. Broke out yesterday

JEC. Broke out of base yesterday.

GWW. Has been trending up nicely ever since last gap up afer earnings.

GRMN. Monster stock.
FSLR. Highlighted several times in my watchlist. Monster gap up yesterday.

CROX. Ugly shoes but nice chart. Broke out of U-base yesterday.

NVTL. Awesome 45 degree trending stock with great support by 20 MA, what more can you ask for? It has pulled back recently and presents good opportunity for getting it.

RSH. Another beautiful chart that has been trending up. But moving sideways for the past month or so. Ready to break out or reverse at resistance?

Tags: simplyoptionstrader, technical analysis, options trading, stock trading, breakout stocks

Back To Work

This week, the traders should be back working in full force and trading volume to resume. It was an up week for the indices on light volume and this is the week to find out if momentum can carry on as both S&P 500 and DOW approaches their former highs (for the 3rd time). Nasdaq looks the strongest of the three indices as it has already surpassed it previous high.

Earnings season is officially kicking off on Monday. Another exciting period to come. As usual, those with swing trades, do check the earnings calendar before entering new trades and get out of the position prior to earnings.

Mon:
Notable earnings: AA

Tue: Wholesale Inventories, Fed Chairman Bernanke speaks about Inflation
Notable earnings: INFY

Wed:
Notable earnings: YUM, DNA, CHAP

Thurs: Trade Balance, Treasury Budget

Fri: Retail Sales, Business Inventories
Notable earnings: GE

Tags: simplyoptionstrader, earnings, economic calendar

Links, Links & Links

Take this slow week to check out these links:

- Excellent post by Chris Perruna, explaining how to do position sizing and expectancy. Plus he offers free download of:
* Position Sizing Spreadsheet
* Expectancy Spreadsheet
* Interactive Portfolio Spreadsheet

-Earnings season is starting officially next Monday. In case you have not noticed in MY DEL.ICIO.US on the left column of my blog, Bespoke gathered a list of "Most Volatile Stocks on Earnings Reports". You may find some good candidates for straddles and strangles here for earnings play.

-Read the inspiring story of The Pattern Trader. The riches-rags-riches life of Conrad, a former General Manager, in media industry who filed for bankruptcy when his business failed. Went for trading courses and started trading, lost some money and more. Step back from the market and studied all he can about trading from books and internet and came out with his own strategies. Now cleared of his bankruptcy, Conrad is consistently making US$5,000 monthly from trading, teaching trading and now even co-authored "Secrets of Millionaire Investors", a #1 bestseller non-fiction book in Singapore. Kudos to him!

-John Carter, author of "Mastering the Trade", shares in his blog an interesting post titled A Week in the Life of a Trader . . .

-Corey from Afraid to Trade reviews Martin Pring - The Investor’s Guide to Active Asset Allocation. Corey writes regularly about sector rotation. Be sure to check it out. I'll be having a post soon about where you can find the different sources on sector rotation information. Watch out for it!

Tags: simplyoptionstrader, stock trading

Holiday Week

It was a roller-coaster ride last week. Had fun or were you puking all over after the ride? Both the DOW and S&P 500 ended Fri with spinning tops, representing indecision. And with Independence Day falling in the middle of the week and U.S. equities market closing at 1pm ET on Tue, many traders will be away for at least half a week, with some taking a full week off. Expect low trading volume and trade with care - trade less, tighten your stops or take a rest!

Mon: ISM Index

Tue: U.S Equities market closed at 1pm ET

Wed: Market closed in observation of Independence Day

Thurs: ISM Service, ECB President speaks on interest rate announcement

Fri: Unemployment report

Tags: simplyoptionstrader, economic calendar