Sunday, December 21, 2008

Analyzing Possible Picks

In preparation for Monday's trading I went back to the last three days of Stock Assault picks in order to see if I am too late to catch a ride on one. I analyzed ELY, CVX, DO, TTWO, CEC, NWL and MO. I first looked at the market's interest in the stocks by seeing the volume of their last trading day versus their 90 day average. ELY volume was up 58%, CVX up 44%, DO up 31%, TTWO up 159%, CEC down 4%, NWL up 45% and MO up 33%.

There is certainly a relationship to be drawn from volume and pricing, and it can be bearish, bullish, or neutral. When volume is way up, and the stock price is going down, then we have a confirmed bearish relationship. I found this in ELY, CVX, TTWO and NWL. I did not find this in DO, CEC or MO. If you look at chart #1 for all of these equities, you will see this volume-up price-down pattern four those four stocks.

On chart #2 you will see that slow stochastics confirms by the downtrend in %K. These will not be buyable until we see a %K bottom, confirmed by an upturn. However, you will notice on chart #2 for on DO,CEC, and MO we have an upturned %K on MO and CEC, but not DO. In fact CEC is overbought and due a pullback. MO looks like a buy here, and DO is a strong buy here.

I will be looking to see how Monday starts, but with the news of OPEC choking production to raise oil prices, the eventual outcome will be much higher oil, making DO a good hold for a while. MO looks good to go also. Of course, I'll be waiting to see SA picks for Monday also. Anyway, just trying to give you some insight as to how I sort through things.

Have a good one,
Roger