Friday, January 23, 2009

I Got Fooled

Looks like the market isn't as whooped as I thought. A good recovery is underway, and most picks are faring well. I think we will swing positive before the day is over. Looks like a good positioning day after all. If you are on the sidelines, you might want to look at an entry at this point. Let's hope this is sustainable throughout the day.

Have a good one,
Roger

Here We Go Again

I'm used to down days after a big run up, but today looks to be a repeat, if not even worse, of yesterday. There is so much uncertainty in the market today one has to wonder when it will ever settle into a stable rise.

New investors are getting frustrated by the seemingly unsettled vacillation, and seasoned investors are plain-out fed up by the inability of the market to "make up its mind". It should be no big shock that 4th quarter earnings are off for many companies, but the market reacts as though it's been blind-sided by the news.

Even though the market is unsure, we must be sure of what we are doing or we will get hammered. Even in a big down day some stocks perform really well which is always the case, but they are hard to find.

Sometimes you just have to stand back and wait for the dust to settle, and this may be one of those days. Even though the market may start by falling flat on its face, it could easily turn positive at the drop of a hat as the day wears on, but that's the nature of the beast, so to say.

Try and have a good one,
Roger

Wednesday, January 21, 2009

Bottom Resistance Met

Remember how I said we will bounce around between 8000 and 9000 on the DJI before we make a break? Well, the bottom is in which means we can look forward for a few days of recovery, starting with today. At least I sincerely hope so.

The futures are pointing towards a good day today. A break through the bottom resistance would mean a major leg down, but I don't see it happening. If you have taken my advice and waited to pull the trigger on some trades until we have an up day, I think today is the day to bang away.

If we ever break the 9000 barrier we will have a very nice bull run, but the weakness of the financial sector will be dragging everything behind it. When that sector breaks loose, look out!

Have a good one,
Roger

Monday, January 19, 2009

Quick Way to Sort Picks

I'm often asked about days when several picks are fired-off. For instance, last Friday there were 23 picks delivered to my PC, and I was quickly able to narrow that down to a possible 5 by simply looking at the %K(15,3) of slow stochastics.

I hope that most of you use some kind of charting software, even something as simple as Yahoo Finance. There are some free ones out there, but I like my Amibroker and StockShare v2 charts. I'm kinda partial to the 15, 3 settings for %K, but I have also received messages about other settings that work well. It's really what you feel comfortable with that matters.

Anyway, I was able to quickly filter the picks by choosing the ones with a %K value of less than 20. This generally yields extremely oversold stocks that are most likely to bounce up. The results from that left me with DLX, DOW, ADSK, LAMR, and NWL. I sifted through news to get the dirt on each, and I was left with two with impending earnings announcements, one with a failed joint venture, one with a bunch of downgrades, and one hitting a 52 week low, but decent earnings.

Remember, any stock, good or bad, goes through the same up-down cycles. Its just that the good equities have larger up cycles than down. We can make money either way, and even stocks high in %K can still bolt upward. This was just a helpful pointer on a way that I use to sift picks.

Have a good one,
Rog

Sunday, January 18, 2009

Looking at Some Picks

I thought I would share some more on how I look at picks. Three potentials fired off for Monday include BGG, CAI, and MCO. I started by looking at Yahoo Finance for something on each one. BGG showed some new star ratings of 4 and 5. This stock also recently topped wall street forecasts on earnings. That's always a good thing. Looking at CAI, I saw some new contracts it had recieved, and some good looking financials. It's a money-maker. MCO showed a history of EPS surprises. Very good. I then opened each one in Amibroker to look at some charts.

BGG shows a dive towards resistance of around $14 which is where I placed the red dotted box as a possible Buy Zone. The %K shows that it is oversold and due to bounce. The dotted red box shows the area where we would expect to see a bottom and a turn. Notice the volume bars outlined showing heavy selling far above the 50 day moving avg. for volume. The price movement and vol. in the short term is bearish,but technically it is due for a bounce.The weekly Bongo shows good momentum. I also threw in the pattern explorer recognition showing a bullish expanding triangle patter

CAI shows a pullback towards the 100 day moving average of $44.50 which is the buy zone indicated by the red dotted box. The %K is above 70, indicating that it is oversold and may retract some more, but if you notice its history, it never seems to make a full retracement before rising again. The Bongo weekly also shows good momentum. Pattern Explorer also shows a bullish rising wedge.

MCO shows a lateral move across a very predictable price channel indicated by the black dotted lines with a buy zone indicated by the red dotted box. %K has a dotted red line showing possible retracement, and the volume bars have shown heavy selling well above the 50 day moving avg. for volume. I would not expect it to fully retract due to the previously mention price channel action. Bongo again shows a good weekly momentum,and the patterns show both a rising wedge and an expanding triangle.

Again, I hope I have given some insight into how you can technically break these picks down. There are actually several more charting tools that I use, but it would take several pages of blog and illustrations to show them all. The one thing that I love about Stock Assault is that it spots stocks BEFRORE they make a move up. Too many other software systems have gotten me in during the middle or at the top. In summary, the stocks I have reviewed are more of a lesson in how I look at stocks, and when I would enter, and are not reflective of how you or someone else would do it. I am most likely wrong on BGG moving that much lower, but I play it safe a little too much. While good charting software is a plus, it is not required to use SA; it just like a security blanket for me.

Have a good one,
Roger