Archive for June, 2009
A Delicious DISH
Dish Network (DISH) shows a pattern that’s developing across dozens of stocks as we head into summer. The satellite provider recovered from last year’s crash with a steady rally that reached the 200-day EMA in May and promptly stalled out. The subsequent pullback has been orderly, with a constructive volume pattern. The decline has generated [...]
Retail HOLDRs Trust (RTH): Sink or Swim Time
The Retail HOLDRs Trust (RTH) rallied off its bear market low at 60 in March and stalled in the low 80s, just under last October’s breakdown from five-year support. Note how this price level also converges with the 200-day EMA. The fund has pounded out a double top pattern in the last 3-months and now [...]
Gold Turning The Corner?
The gold futures are trading near 940 this morning, after breaking out of a 3-week bull flag pattern. The contract had dropped as low as 914 yesterday, shaking out traders after violating 50-day EMA support at 934. That level will probably be “in play” for the next few days, in response to this afternoon’s Fed [...]
General Electric (GE): 2009-2010 Prospects Growing Dimmer
General Electric (GE) bottomed out at 5.73 in March, after posting the highest volume session in its long history. The subsequent bounce lifted above the 50-day EMA but failed to reach the 200-day EMA, which made it a major underperformer during the four-month rally. The stock then ground out a symmetrical triangle near 14 and [...]
Pulling Into Max Pain
Stocks near big strike numbers ahead of triple witching Friday. The theory here is, if a strong stock has fallen into a Max Pain strike number during expiration, it will probably recover after the influence is out of the way next week:
Freeport-McMoran (FCX) 51.16
iShares Russell-2000 Trust (IWM) 51.19
Petroleo Brasileiro (PBR) 40.40
Aeropostale (ARO) 35.17
True Religion (TRLG) [...]
Honor Your Stops…Really
One picture is worth a thousand words. Look at the price action on Matrixx Initiatives (MTXX) after the FDA warned about its popular Zicam cold remedy, right in the middle of Wednesday morning’s session.
The stock dropped nearly 14 points in under 30-minutes. I can’t find a better argument for placing and honoring your stops, because [...]
Metallic Opportunities
Industrial metals stocks sold off hard on Monday, following their strong rally runs. It’s likely that triple witching expiration is contributing to downside pressure, because the strongest sectors tend to act poorly during these quarterly events.
I’d view any additional selling into lower strike numbers as a buying opportunity, but its best to remain cautious until [...]
Best Buy (BBY) Earnings Needs to Deliver
Best Buy (BBY) reports earnings before the bell on Tuesday. The electronics giant was a top first quarter performer, leading the retail sector higher after the March low. The uptrend stalled out following the March 26th earning release, with the stock making absolutely no progress in the last three months.
It’s been hovering the 200-day moving [...]
Natgas Futures: A Whole Lot of Nothing
Natgas makes a big splash every time it has a rally day but the turnaround in this underperformer could still be months away. The weekly natgas chart (continuous contract) shows a steep decline that’s nearly a year old. Selling pressure finally eased up at the start of May, but there’s been little progress since that [...]
Dendreon (DNDN): The Sky’s The Limit
Dendreon (DNDN) is grinding order out of chaos. This hot stock rallied into the upper 20s in 2000, 2007, and again in late April of this year. It then settled into the low 20s through May and is now ticking higher. It tested the rally high last Friday and pulled back for two sessions. A [...]