Friday, June 29, 2012

Inverted head and shoulders

The target on the /ES 1352 has been met per the Inverted head and shoulders as of now. My market outlook remains bullish with a 6% higher target but the markets need a bit of consolidation at this juncture. Buy the dips!

Wednesday, June 20, 2012

Market signals update - Buy

I have buy signals on the daily charts which extrapolates to short term.

US markets - Buy, I would buy any dips in the market.
Gold - Buy with a target of 1690$ and then I expect sell off to ~ 1300$
Crude oil - Neutral to bearish, I would stay away from it.

I have some good and interesting charts which I will share within 24 hours. BTW, I am ignoring the FOMC meeting. There could be some volatility but my signals include all of that volatility and much more.

Good trading all!

Monday, June 18, 2012

Chipotle Mexican Grill Inc.

Descending channel breakout to the upside. RSI also formed a price divergence on 3 prior price lows. You can also see a false channel breakout last week.

Buy list

PAYX above 32.39$, UNP on a daily close above 116.2$, buy HFC here, buy HSY here; Use 7% or appropriate stops as mandatory.

GDX and GLD are on the buy as well.


Sunday, June 10, 2012

Forest laboratories Inc.

Forest Labs (FRX) broke out of the consolidation nicely last week. I have a buy call for this ticker at this time with a stop below 33$, below which you go short on this name in case the breakout was false.

CMG has been trading in a descending channel for the last 2 months with the RSI forming a positive divergence with the price. RSI has been forming a higher low while the price was forming a lower low. I am looking for a channel breakout, not yet. There was a false breakout on thursday, so I would be looking for a close higher on the channel. Don't buy before the breakout, use a 7% stop.

Saturday, June 9, 2012

Priceline weekly options

You must be aware that the market rallied 20 points ($DJI) into the close yesterday. I was watching Priceline Inc. (PCLN) and the weekly options. I had no positions though. Priceline rallied from ~ 639$ to 644$ in 20 mins before close. I was watching the 640$ calls that expired yesterday. In 20 mins, the call options gained >700% from ~ 0.45 to close at 4.30$. Was the last minute surge on this big kahuna done to push the weekly options? I don't have material evidence to prove it. But, the volatility in the big names (GOOG, AAPL, CMG, PCLN etc) has increased a lot since the weekly options have been introduced. The OTM weekly options, expiring on friday, move 300 - 700 % in the space of 4 days beginning Tuesday afternoon or so. This is only for educational purposes only, I usually do not endorse options officially. This gives you an idea of another instrument in the stock market.

Below is the 1 minute chart covering the last 2 hours of the 640$ call options that expired yesterday at 4 PM ET.

Thursday, June 7, 2012

Market update

My stance on the markets:

US markets (DJI/ SPX/ COMPX) - Bullish - 5% stop
Commodities (/CL, /GC, /SI) - Bullish but I would be a seller of /CL which is the weakest of all in the group here.

Basis of the above stance is short term using daily charts.

Monday, June 4, 2012

Eur/ USD

Eur/ USD posted a price-RSI divergence on the daily chart. I view this development as bullish for the currency in the Intermediate term. Further, there is a strong support below the 1.2286 till 1.18. Resistances to clear are 1.2494 and 1.2622. 

If Eur/ USD can post a rally for few days, that should calm the markets down and we could see an short term bottom on the equity markets as well. Take into consideration that Eur/USD has an inverse correlation with the equity markets usually.

Friday, June 1, 2012

Market update

We are seeing price-RSI positive divergence on the daily SPX chart. For this divergence to convert to a market rally, the divergence must hold. Which means RSI should not post a lower low than the previous low marked on 05/18. If we see a bottom on RSI here, which is likely, the market has bottomed for the short term. Previous price low was 1291, so clearing 1291 higher would mean a good rally. There are 2 approaches: 1, Buy here or lower - with a stop at 1268. With this approach, you could lose if the lower low comes at 1200 (example). 2, Buy on a confirmation of the next rally with $SPX clearing 1292. Either way, stops and risk management is important.

Giving confidence to this approach is the support of the trendline from the 2011 top.

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