Thursday, February 03, 2011

Technical Picture - Minor Gains Ahead of Jobs Data

Both the S&P and DOW have made new recovery highs since last Friday's sell-off. However, the COMPQ and RUT have yet to confirm. If the markets rally on tomorrow's jobs data, that would be ideal for confirmation. Without confirmation, it's hard to get overly bullish at these lofty levels.

GLD set up a nice short squeeze today as prices formed a solid setup out of a wide base. Looking for a gap fill as depicted below.

Note the small handle that forms at the baseline before price squeezes higher.


USD - Oversold technical bounce on test of the weekly trendline.


AMZN - bearish flag

UA - bullish flag

NR7 (price/volume contraction ahead of expansion) daily focus list APOL, FNSR, HOG, VRX

Earnings Gaps - Gap down - CSTR, LVS, PWER Gap Up - JDSU

These are not recommendations to buy, sell, hold or sell short. Everyone needs to think for themselves when it comes to trading their own accounts. First, it is the only way to really learn, and secondly,you are the only one responsible for your trading decisions. Think of these charts as food for further analysis. Before making a trade, it is important to have a plan. Plan the trade and trade the plan. The plan includes setting a trigger level, a target area and a stop-loss level. It is also important to plan for three possible price movements: advance, decline or sideways. Have a plan for all three scenarios BEFORE making the trade. Consider possible holding times. And finally, look at overall market conditions and sector/industry performance.

Good Trading!

8 comments:

Day Tradr said...

UA - beautiful bull flag. Kicking myself for not checking your blog yesterday.

Jamie, what criteria do you use for NR7 on daily?

Thanks

Jamie said...

UA was sweet.

The NR7 scan is my own simple design run through stockcharts.com. Here is the code:

20-day Simple Moving Average of Volume for today is greater than 500000
• 60-day Simple Moving Average of Close for today is greater than 10
• Daily Range for today is less than or equal to Daily Range for 6 days ago
• Daily Range for today is less than or equal to Daily Range for 5 days ago
• Daily Range for today is less than or equal to Daily Range for 4 days ago
• Daily Range for today is less than or equal to Daily Range for 3 days ago
• Daily Range for today is less than or equal to Daily Range for 2 days ago
• Daily Range for today is less than or equal to Daily Range for yesterday
• Daily Volume for today is less than or equal to 20-day Exponential Moving Average of Volume for today

chin said...

Jamie,

I have ThinkorSwim installed. I tried running pattern matcher for bull flag, got Gmcr as one stock. I am not sure if that is a bull flag. Can you please help clarify ?

I missed UA completely. Was busy trying to understand Lulu. Wasn't that short squeeze. It has a huge shorts float.
Thanks

Day Tradr said...

Thanks Jamie for the NR7 code. I have got the range part done. Will try to add the volume part. Just wondering how many stocks showed up in this scan today?

Jamie said...

Chin,

GMCR has not formed a bull flag. The 15 min. has formed a perfect C&H. Keep it on the WL for more upside.

LULU was a consolidation BO pattern. Not sure how much impact the shorts had. The stock is a momentum play based on good performance and strong expectations for future earnings.

Jamie said...

Day Tradr,

Too many. I've gone through the list. IBM is the best with NRIB NR7 in play. Also like BG and VRGY.

chin said...

Thanks for your response. CMG also seems to be a momentum play and has broken out of a tight range.
Do you see further upside on this stock ?

Thanks

Jamie said...

Chin,

CMG reports earnings on Feb. 10. I would not be looking to swing trade it ahead of earnings. Secondly, it has been up three consecutive days, and probably needs to rest.