Wednesday, August 30, 2006

Pre-Market

TZOO and PCLN downgraded at Stifel Nicolaus:
TZOO from hold to sell; PCLN from buy to hold. Too bad because TZOO was consolidating its recent gains very nicely and setting up for a potential breakout.

Watch List:

I'm sticking with the usual suspects going into today's session. Specifically, I'm looking at names that closed the session on or near their afternoon highs: AKAM, NVDA, JCOM, AAPL, BRCM, CKFR. Also don't forget CHS, profiled here on Monday night. It is setting up for a bullish retracement on a trading basis (not an investment recommendation). It was mentioned as a possible bullish island reversal on CNBC by the guest host this morning.

6 comments:

monkeydust said...

Wow, they sure played TZOO. Big runnup and then the downgrade.

I'm still in NVDA. They had a curious drop at close though. Profit taking?

SNDK is looking good too.

monkeydust said...

I think CHS is probably a good play. Look at RACK. That stock got hammered and has made a hell of a comeback lately.

Jamie said...

I hope so. I bought some at $18.00 and I'm swinging the trade into tomorrow. The RACK comeback was amazing bit I'm not expecting such a big move from CHS. I just hope it picks up the pace tomorrow. We had an uptick in volume today and the daily chart is carving out a nice rounded bottom (a series of higher lows)with means there's a lot of demand at these prices.

Jamie said...

NVDA has had three successive higher closes so you're right about profit taking. The real bodies of the last three candlesticks on the daily timeframe don't overlap, so as far as I'm concerned the rally continues until we get some overlap. For example, if tomorrow's open is lower than today's close, we'll see some overlap. I don't worry about a few cents, but if we open a lot lower, that could be the beginning of a consolidation phase.

TZOO ended the day near its lows so we'll probably see further weakness tomorrow.

monkeydust said...

Thanks, Jamie.

One problem I've always had was selling too early. How do you know when it's time to get out? How can you tell the difference between a minor consolidation before another upswing and an extended drop?

Oh, and how about RMBS? That one going to keep going? We saw it happen before earlier in the year.

Jamie said...

A minor consolidation will take place on much lower volume than the preceding move. A healthy pullback usually has diminishing volume as the pullback progresses. On the other hand, if a stock pulls back sharply on high volume, its not a good sign. Rounded tops usually result in a sharp correction. Rounded tops followed by a gap down are deadly.

RMBS is in the midst of a technical bounce off of a key pivot point in the $10.00 area. I must be slacking off, beacuse I missed it completely. I'm going to go over a lot of charts on the long weekend. I don't want to miss any more like this one.