Thursday, April 28, 2011

Technical Picture - Modest Gains

A slightly weaker open following higher than expected initial claims (429k vs. 390k). We chopped in a narrow range for most of the session, but managed new recovery closing highs by EOD. Next short-term target is 1362.

Stocks in play for tomorrow - RIMM - Q1 earnings warning - big gap down. CAT earnings in pre-market. Since Caterpillar last reported, the stock has gained 17.5% versus the S&P 500, which is 4.8% higher. Also, since CAT last reported, it purchased Bucyrus (previously BUCY).

Biotech/Pharma ETF IBB has been one of the best performing sectors since the March correction as depicted on the chart above.

AMGN rebounded strong this week after last Friday's earnings sell-off. Now ESRX, a pharma related name, is doing the same following earnings weakness on Monday evening.

AMRN another Biotech, set up a sweet dip buy as depicted below. Also setting up a C&H pattern for tomorrow.

Two trades in AMRN. 1. Long bullish rounded bottom; and 2. Re-enter long when price corrects back to its trendline as depicted on 1 min. chart below.


timo4sho said...

Hi Jamie,

as usual ... great trades!!!

Im curious as to how you find your trades (like the ESRX example)? Do you find them using a scanner (Trade-Ideas? what scan?) or by manually browsing through your watchlist?

What are your current criteria for putting together your daily watchlist?

Thanks for the info!


timo4sho said...

Thanks for sharing your wisdom ;-)

TJ said...

Hi Timo,

Thanks, ESRX was an earnings mover on Monday and I kept it on my focus list as it developed a base. I do use Trade-ideas scanner, but during earnings season I like to focus on earnings gaps.

AMRN is on my focus list for several reasons: 1. long-term position trade from $6.00, sold half on the big gap up, 2. potential buy-out target as per CEO on CNBC, 3. continued successful drug trials.

I like to focus on widely held names that have event driven gaps/ and or momentum. I find these from, Esignal hot lists, momentum scan, and Trade-Ideas scanner.

I also subscribe to HCPG daily newsletter for BO candidates.

Criteria for finding good candidates in an uptrend is to look for stocks trading on higher than average volume with RSI above 60 and trading above previous day's range.