Thursday, January 26, 2012

Eur/USD update

Euro/USD topped here in the short term. But, the currency pair formed a positive divergence with MACD in t the last few months. Buy the currency on a pullback, I believe we will see a powerful rally in the next few months. The rally may take Euro as far as 1.4.

Sell short if SPX goes below the trendline. The market is following the path as mentioned in the last few blogposts.

Wednesday, January 25, 2012

AAPL

The chart below is all you need to know. I don't see a breakout happening for the stock. I am sure AAPL is a great company but it's market cap is 1/2 a trillion $. That is all you need to know. Apple is an awesome company but the awesomeness won't always translate into the $ for stock holders. I don't know about long term, but short term this ticker topped right here. Use a 4% stop, just in case this is a break out.

Friday, January 20, 2012

Walmart Inc.

The world's biggest retailer hasn't seen its stock grow in 13 years. IBM also was in a 12 year consolidation before it broke out in 2010. Last year IBM was up by 25%. I see such gains here for WMT as well. EPS has been growing, dividend is on the constant increase every year, what is not to like about WMT. The Indian govt. postponed its plans to allow International retail markets into their markets. But, with this technical breakout shaping out on the charts, any good news in that front would only be an added bonus. With a 2.5% dividend payment at this price level, I would buy any dips for the long term. A 8% stop from this level is good, stops are mandatory in investing no matter what.






Thursday, January 19, 2012

Elusive top

The market is long overdue for a correction (small/big) but it keeps chugging along smoothly with pinpoint moves everyday in the northern direction. I posted an update last week here . I expect SPX to top in the next few days. Below is the current SPX daily chart:


When the market is moving less than 1% intraday and VIX at ~ 20, it is not good to trade quickly like when VIX was at ~ 30. You will end up paying your brokerage a lot in fees than what you make out of your trades. You need to shift gears when needed.

As for me, I haven't made a trade in the last few days after I sold MON short. I made a pairtrade with AAPL calls at that time. Though I was able to close the AAPL calls for a good profit, MON is continuing the upward move like the general market itself.

There are always trades to be made in any market but I was busy in the last 2 days. Something that I didn't expect to happen ever has happened in my life on Tuesday. No public disclosures but such things are worth more than a million $. There are some things in life that are worth more than money. I will take such things anytime over any trade. :)


Thursday, January 12, 2012

Market update

GOOG has been in a VST uptrend since I posted. TZOO broke out after my post. I hope you took advantage of my posts to play the names. 

I have charts of SPX, OTC/ NASDAQ/ COMPX, DJI, NDX for you today. We are at/ close to a top rather than a bottom. It would be prudent to stay in cash for the ST (swing traders) or have tight stops if you are long. I have no indication to sell short though. When I mean close to a top, do I say that we will see a big/ small correction? Don't know at this time. We could consolidate/ sideways or see a correction. Either way, since the cycle seems to be topping, follow the above suggestion. Though I have charts of major indices below, since DJI has been leading this cycle I will use that as an example. We could break the trendline upwards, pause and then breakdown or we may not go above the line as you can see we touched the trendline already.





The key point I would like to make is both NASDAQ, SPX are lagging DJI which doesn't bode well for the market in the Intermediate term. When there is greed in the market, the small caps and the NASDAQ always leads. Lack of leadership means caution should be exhibited even though we may still be in an uptrend.

Tuesday, January 10, 2012

GOOG intraday

GOOG showing a positive divergence on the hourly with the RSI14. Let RSI cross the 55 level, buy GOOG with a stop at today's low. Bullish play is VST only, ST remains bearish.


Shortsqueeze watchlist

The following names (TZOO, RENN, GMCR)
1, have been down big in the last 52 weeks (like 50 - 70%).
2, are heavily shorted with a short interest of higher than 30%
3, low float (not low low) compared to the stocks in the same space as they are in
4, All of them are posting consolidation in the last few weeks.
5, every trader and their mother are bearish and short on this list.

Look at NFLX for the trading cues. Let the stocks consolidate. Let the price cross (and close) the 50 DMA on a daily basis. Buy a small position with a wide stop of 5 - 10%. Add more if the 10 DMA and 20 DMA cross the 50 DMA. If they break above 50 DMA, they have potential to go crazy higher.

If the consolidation doesn't lead to breakout above the 50 DMA, no trade. No problem but wait for the play. Don't jump ahead of the game. NFLX is the example, others to follow. It may take few days/weeks for this to happen.


I have no positions in any of the above at this time but I will enter should the play come to fruition. I am not impressed with the fundamentals of any of the stocks, it is a pure technical play.

AAPL, MON


Sold short AAPL 425$ weekly calls. AAPL will be fighting the fading momentum and then theta will go against the calls.


Shorted MON, will cover lower. 

Both are short term plays. If things are good, I will close intraday too. 

Tuesday, January 3, 2012

Trading wishes for the new year

  • To continue to be blessed by the Almighty, and the trading peers for good success 
  • To reduce trading volume, but increase effective gains
  • To simplify charting even further, as my experience tells me the less charting gives you more clarity.

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