Sunday, August 29, 2010

Top 10 Ideas for the Week of August 30, 2010

After looking at over 500 charts and posting my thoughts on over 200 of them, I have found some good setups for the week. This week's mix contains 6 short setups, and 4 long ideas, with one breakout. These were selected in and should be viewed in the context of the broad market trend reviewed Saturday which looks to bring stronger prices for Gold and Oil and a continued pullback in US Treasuries. Watch the range for the US Dollar Index to signal its next move. Although volatility is falling, it remains with in a range and will have little impact on equities, which appear to have at least a slightly bigger pop in store for the week before hitting resistance, after a rough week this past week. Here are the top ten tonight in no particular order:

1. Bank of America, Ticker: BAC

This stock looks ready to explode down out of this tighten wedge. Under 11.90, the first support is 10.50 followed by 9.25. The weekly chart confirms the move lower will continue to near 10.

2. Hi-Tech Pharmacal, Ticker: HITK

The month long bear flag seems ready to break down below support of 16.80, from a glance at the weekly chart. If it does then the target is 14.

3. Impax Laboratories, Ticker: IPXL

Needs to hold 16.28 the 200 day SMA or 14 is coming. If it holds then resistance is at 17.59.

4. Salix Pharmaceuticals, Ticker: SLXP

It had a good move Friday above the 100 day Simple Moving Average (SMA) but if it loses that there will be a slow march down to the 200 day SMA at 33.44. Note that the SMA's are starting to rollover as well.

5. American Dairy, Ticker: ADY

this stock looks to have finally found a bottom near 7.20. Rising now if it can clear 8 it can can run to 9.75 or more. The weekly chart printed a very bullish Dragonfly Doji.

6. Sotheby's, Ticker: BID

This stock is finishing a symmetrical triangle near the cross of the 50 day and 200 day SMA's. The Moving Average Convergence Divergence (MACD) indicator points to the chances of a break out being lower. The target on a break lower would be 22.30 initially.

7. Select Comfort Co, Ticker: SCSS

The 4.75-5.00 area has been big support in the past and is proving so now as well. Also the bullish candle Friday with an expanding range adds weight to the argument for a reversal. From here it looks to go higher with 6.00 as the first resistance and then 6.50.

8. Whirlpool, Ticker: WHR

The falling wedge is tightening and bodes for a big move to come. The weekly chart points lower, with support at 70 and then 65 on a break of the wedge. If it breaks higher above 77 there is resistance at 82 and then 86. Watch for the break and play accordingly.

9. First Solar, Ticker: FSLR

If it can get above the 130 resistance area it can run to the next area at 140-141.33.

10., Ticker: PCLN

The range on this stock has been widening over the last few days and if it keeps widening it could spell trouble, as the SMA's are all a long way down. the first clue to a fall would be a crack of the 280 support and test of 272 below. A break of 305 and hold there and you can forget about this going lower. One might play this with put spreads due to the high stock price. Also I can already see Adam Warner (@agwarner) calling me un-American for betting against William Shatner, so make sure it is happening before you play.

Bonus Idea: Network Engines, Ticker: NENG

Not for you big boys whipping around 100,000 shares, but a decent setup for a portion of a portfolio. This stock is finding supp at 1.35. The MACD is turning more positive and there is resistance at 1.70 then 1.80.

Trade'm well!

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