Sunday, September 19, 2010

Top 10 Ideas for the Week of September 20, 2010

After looking at over 500 charts and posting my thoughts on many of them, I have found some good setups for the week. This week's mix contains 5 long ideas with 5 short setups, and one breakout. These were selected in and should be viewed in the context of the broad market trend, reviewed Friday, which looks bring more new highs for Gold. US Treasury Bonds and the US Dollar Index appear to be heading lower. Oil looks as if it will probably join them going lower as well. The volatility index does not seem like it will impede stocks but only the QQQQ's seem to know that they want higher with the SPY and IWM still scratching their heads about the next move. Sector analysis showed that the strongest sectors were Technology and Consumer Staples and the weakest Utilities, but all were showing signs of sluggishness as was detailed in my review Saturday.

Here are the top ten for the week in no particular order:

1. Blackrock, Ticker: BLK
Blackrock is holding above 162.9, the 50% Fibonacci retracement level of the March 2009 to January 2010 move. If it continues to hold it looks to test resistance at 170, and then 180.98. Support can be found at 156.51 below the Fibonacci level. The Relative Strength Index (RSI) is starting to get Overbought (OB), but the Moving Average Convergence Divergence (MACD) is strong. It looks good higher.

2. Regions Financial, Ticker: RF
After failing at the 7.40 long term resistance/support line Regions has been moving lower. Now that it is through the 200 day Simple Moving Average (SMA) at 6.99, which will act as resistance, it is on the way to 6.35. The MACD is waning and the RSI pointing lower adding to the bear case.

3. SunPower, Ticker: SPWRA
This stock has been in a downward trend for over a year, probably the only solar stock that is. They must put solar panels in the shade or underground. After rejecting the 50 day SMA it is heading to the center of the channel again, and support near 11. Failure there leads to support lower at 10. The 100 day SMA at 12.89 would act as resistance if the 50 day does not hold it down. The RSI is falling and the MACD waning here as well.

4. Callon Petroleum, Ticker: CPE
Callon has been holding support at 3.62 for a month and looks to be poised to rise with the RSI and MACD picking up. It will see resistance at 4.20 and then 4.46 higher.

5. Mellanox Technologies, Ticker: MLNX

Mellanox broke through the recent resistance just above 17 Wednesday and through resistance of the 50 day SMA at 17.57. It retested the 50 SMA and held and is now ready to try higher with resistance at 19 followed by 20.35.

6. Mindspeed Technologies, Ticker: MSPD
Mindspeed rocketed up 14% Friday. So what is it doing on the top ten list, a pullback? No, it still has room to resistance at 9.50, another 9% higher. The strong volume Friday, rising RSI and MACD add to the bull case. Support would be found at 7.90.

7. Lululemon Athletica, Ticker: LULU
Lululemon jumped off of earnings and settled into a bull flag last week. It is slightly OB but this is due to the fast hard move up. If it can get through resistance at 44, it sees some resistance at 45 and 46. Above that the Measured Move (MM), distance from the bottom of the run to the flag added to the top of the flag, would be in the low 50's! Support can be found at 43.

8. Buffalo Wild Wings, Ticker: BWLD
Buffalo Wild Wings ran to the 48.50 long term resistance/support line and rejected. It is headed lower now and should test support at 42.60-.90. The RSI turned violently lower and the MACD crossed adding to the bear case.

9. Biovail, Ticker: BVF
Biovail has had what seems like endless flags and pops higher, but the chart looks tired now. Support can be found at 26.50 and if it breaks that the next support is at 24. Resistance is higher at 27.50. This has been hughely OB and now the RSI is falling and the MACDis decreasing and indicators about to cross. I like it lower.

10. Hi-Tech Pharmacal, Ticker: HITK
It looks like the 3 week run is over for Hi-Tech Pharmacal. It printed a bearish Hanging Man candle Friday near resistance of the 100 day SMA at 21.13. The MACD has been decreasing and the RSI is now leveled out. Support can be found lower at 20 and then 18.89 below.

Bonus Idea: BP Amoco, Ticker: BP
The 50 day and 100 day SMA's are squeezing BP from both sides into a series of thin candles. This could pop either way out of the impending cross. If it breaks higher then resistance can be found at 39.75 followed by 42. If it breaks lower then support comes first at 34 then 33. Perhaps a straddle? I Love it when you get two ways to win!

Have a great week and trade'm well!

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