Dummy Trade of the Day - TBS International Limited (Public, NASDAQ:TBSI)

TBSI set up a NRIB (NR7) at the base of the ORH in close proximity to the rising 5 period ema. I took a partial at R1 and exited the balance as price approached the whole $ number $36.00.

NVDA carved out 2 inside bars on declining volume at the base of yesterday's pivot high. Long on a break of the second bar high. Sometimes when I trade lower dollar value stocks I lose perspective with respect to candlestick range. The second inside bar has a range of 20 cents and I'm thinking NRIB, but it's not. The point is a NRIB is much more powerful than a regular inside bar, everything else being equal.

Eventually NVDA carved out a C&H pattern and I used the Fib extension of the ORL to the base of the handle to gauge my target. Again, after the C&H BO, it prints 3 NRBs as the 5 ema catches up to price and that seems to provide the coiled spring effect to boost this thing into price expansion. I took a partial as price approached R2 and exited the balance near the 100% Fib. extension.

Cup & Handle - NVIDIA Corporation (Public, NASDAQ:NVDA)

NVDA, from the watch list, set up a cup & handle pattern at the base of the ORH. The C&H pattern is fairly straightforward and easy to trade. If you have a nicely formed handle, the trade shouldn't go into the red. From experience I target a 100% fib. extension from the low of the cup to the base of the handle. Although the NVDA trade did extend well beyond 100%, it did retrace sharply after tagging it. That tells me that a lot of traders took their profits when I did.

Related Posts: C&H pattern Explained

Extreme Stocks Click Here

Pivot Point Trade - NVIDIA Corporation (Public, NASDAQ:NVDA) & Research In Motion Limited (USA) (Public, NASDAQ:RIMM)

The first chart is a line chart of the 15 min. time frame for NVDA. I think it might be a little easier to see the intra day pivot points from the line chart as opposed to the sticks.

NVDA is a stock I traded yesterday where it hit my preliminary target but not my secondary target. Today's OR hit the 2nd target in one fell swoop, then carved out a bullish tweezer bottom with a perfect green hammer so I went long. I took a partial as price approached the same price as yesterday's short entry. Price has a memory, or so I thought, but it just kept going up to the next resistance level.

This a line chart of VMW daily. It's very easy to see the PPs as marked by the blue lines. Ever since price moved above the lowest blue line, I've been thinking we could get some sort of short squeeze for a partial gap fill. But, each trade has been somewhat disappointing. Today's ORH tagged the swing high from Monday, retraced and carved out a bullish rounded base. Long on break of ORH. It hit the 38% Fib. extension of the previous day low to the ORH, after which I took a partial. After much chopping around, it failed as it retested the the daily high, so I exited the balance of the position.

RIMM was a beautiful short setup because there's so much space between yesterday's lows and the next pivot zone.

Trade of the Day - LKQ Corporation (NASDAQ: LKQX)

The pre-market mood was deceptive given the bullish tech M&A (MSFT/YHOO) story versus the disappointing jobs data. I didn't want to chase stocks that already had been in bounce mode prior to this morning à la CROX and CELG, both of which gapped and produced wide, green OR bars on the 15 minute time frame. The usual suspects and last year's big tech leaders were weak again off the open (AAPL, AMZN, RIMM, BIDU, GRMN).

So I decided to take my time and look at all the WL stocks. The setup taking shape on the LKQX 15 min. chart reminded of something I read yesterday on Tom C's blog. A long upper shadow can be bullish if it is followed by a bullish inside bar.

Basically, LKQX opened strong, tested gap resistance from Wednesday, and retraced, resulting in a long upper shadow. The next bar moves towards R1 and, as we can see on the 5 min. time frame below, carves out 2 NRBs, so I decide to go long. Price easily breaks through gap resistance and R2 on 3/15.

A quick look at the daily time frame and I map out my daily spots, the first of which is $19.00, a strong former support area, and now, a likely resistance area. As price approaches that level, I lock in some profit. There's not much else to say except, following a tight midday consolidation, it just continued up, closing just above the 50 DMA, halfway up to the next daily PP. Sweet!

My next trade was a low risk, B&B off of a NRIB in NVDA. The SOX was in the midst of a momo bottom reversal and this is my favorite semi stock.

Dummy Trade of the Day - NVIDIA Corporation (Public, NASDAQ:NVDA)

The first chart is the daily time frame for NVDA. The blue lines highlight the pivot points. The upper line is positioned on the pivot low from Friday and Oct. and the lower blue line marks the pivot high from July. Once the pivots were taken out, NVDA set up a nice short as we can see from the 15 minute chart below. The target was the green line above around $30.40.

After taking out the first PP, NVDA consolidated in the lower half of the previous WRB. Price could not regain the lost PP and the third consolidation bar was bearish. I shorted a break of $32.00 and took a partial as price approached $31.00. NVDA consolidated at the base of S2 (red line) for a lengthy period before continuing lower. It surpassed the target into the close on accelerating volume.

The chart above is the TSX chart for POT - very similar to the NYSE chart. POT opened very weak and as it was consolidating the first leg down, started printing lower highs leading into a NRIB which set up the perfect short. The BO bar was WR and closed on its lows, taking out the morning swing low. I was looking for three WRBs, but price started to consolidate after only two, so I took a partial. I was stopped out on the balance when POT rallied back up to retest the morning swing low (bummer).

Both NVDA and POT are watch list stocks. POT was also an HCPG pick from last night.

Dummy Trade of the Day - Southwest Airlines Co. (Public, NYSE:LUV)

LUV was upgraded to outperform at Bear Sterns with talk of a potential buyout. It gapped up on the open and carved out a WR red stick with a long lower shadow. I drew in two lines to mark the OR high and low and then watched as the second candle held above the OR low and printed a bullish reversal hammer. The third bar indicated bullish continuation so I started accumulating on the fourth bar. I added a few more when the OR high was taken out. My target was $16.00. Price ascended out of the U-shaped base in an orderly fashion up to the 38% extension level and just couldn't go higher, so I sold my position. This was a feeling more than anything else because the market was extremely weak, I felt it would pullback to its base before regaining strength to tackle the real target.

I re-entered a second time shortly after LUV tagged the OR high and rising 20 period MA and bounced. Again, it rallied up the 38% extension level and immediately reversed so I was stopped out at $15.82.

NVDA reports earnings tomorrow and it often rallies before earnings. Despite Goldman's cautious statements regarding NVDA this morning, it tested Friday's low and immediately bounced on very bullish volume. I entered long on a break of the OR high. Since this is higher risk, I adjusted my size accordingly. My target was resistance at $34.00. NVDA didn't disappoint me.

P.S. - I keep getting shout-outs to post my losing trades. People say that they can learn from my losing trades but don't provide any compelling arguments to make that point. I certainly can learn from my losing trades because its my money on the line and it hurts when it goes against me, however, I don't agree that there will be a big benefit to readers. Just for the record, I had no losing trades today. The above two charts encompass all of my trading activity for today.

Pre-Market - NVIDIA Corporation (Public, NASDAQ:NVDA)

CIBC notes after the close NVDA reported stellar Q3 (Oct) results of $821 mln in revs and pro forma EPS of $0.39 vs. consensus ests of $754 mln and $0.35. Firm believes the co continues to benefit from strong execution, capitalizing on the competitive opening provided by the AMD/ATI merger. Top-line upside was driven by improved mix and increased market share in NVDA's core markets of desktop, notebook and chipsets. With the hard launch of its flagship 8800 chip and Santa Rosa design wins, firm thinks NVDA remains well positioned to solidify desktop/notebook share in coming qtrs. Firm does not expect NVDA to sustain its strong position on the AMD platform, as AMD transitions ATI's chipset business to its own platform. Firm thinks NVDA could more than make up the difference on the INTC platform, though it may take some time. Firm anticipates investors will react positively to the report, despite heightened expectations heading into the call... ThinkEquity notes that NVDA is trading substantially above their Universe and faces more risks than Bulls care to admit: ASPs were down overall, die sizes are increasing, and ATI is likely to have a competitive offering in the near future. Yes, NVDA is growing faster, but firm believes this is already in the stock. Firm says NVDA EPS came in-line with Street consensus, and $0.01 above their ests. If firm keeps the patent license payments for NVDA's past usage, they get $0.35 ex-stock based compensation, not the $0.39. Firm raises thier tgt from $25 to $28. Firm believes Dell (DELL) is ramping AMD/NVDA chipsets and is now shipping consumer desktops, corporate desktops and consumer notebooks with AMD/NVDA chipsets. This is an obvious positive for Advanced Micro Devices (AMD) as well, and could begin to give DELL more of a fighting chance in the price war with Lenovo and Hewlett-Packard (HPQ)... Thomas Weisel sees multiple potential catalysts over the next six to 12 months that could drive rev meaningfully higher from current levels including 1) incremental boost from Vista rollout (not currently modeled), 2) ongoing notebook and workstation share gain opportunities, 3) expanding near-term chipset penetration, notably Intel-based solutions, 4) GeForce 8 rollout, 5) PS3 ramp, and 6) potential participation in upcoming video iPod (not currently modeled)...

Stifel downgrades NVDA to Sell from Hold following earnings. The firm says while NVIDIA turned in a very strong performance for the October quarter and they believe should continue to see share gain momentum carry over for the next several quarters, they are increasingly concerned about the potential for gross margin improvements significantly above the current guidance range. The firm believes potential for increased operational improvements is becoming more limited, and they believe risks associated with product mix shifts, increased competition from AMD in key end markets, and dilution from the proposed Portal Player acquisition could be countervailing forces that could cap gross margin improvements. NVIDIA upgraded to Market Perform from Underperform at BMO Capital (35.29 ) Courtesy of Briefing.com

NVIDIA (NVDA $35.29 +0.69) had a massive qtr on the top line and beat on the bottom line. As a result, we thought we would highlight some of the important points from the earnings call and the implications for the market. Co noted their notebook GPU revenue grew 47%-46% Q/Q and over 100% Y/Y. Co expects their share gain to continue through the year and then accelerate as they see should designs wins based on Intel's (INTC) standard notebook platform. On a non-GAAP basis, gross margins were 42.9%. The gross margin percentage was negatively impacted by the higher growth in the lower margin businesses such as memory, mainstream, desktop GPUs and MCT. However, co notes each individual business unit continues to make progress in improving gross margins. Despite what might appear to be relatively flat margins, co thinks they are continuing to make progress in improving gross margins. While the co gave limited info on the balance sheet, they noted accounts receivable were down by 20 million and inventory was down by 5 million. On the outlook, co noted the magnitude of their rev growth may be difficult to forecast but they are comfortable with 5% growth even if memory declines. Co expects gross margins to show continued improvement. While the co may not make their 45% target by year end, co is comfortable with gross margin increase of 100 basis points to more in Q4. Implications for the market: NVDA appears to be benefiting from the confluence of market anticipation of the Vista release in 1H07 and taking advantage of the window of opportunity to take share as the AMD-ATYT integration continues to take place. Given the multiple catalysts going forward (i.e., desktop, notebook and consumer electronics), strong institutional support and NVDA being the only pure play left in the graphics space heading into the graphics intensive Vista rollout, we would expect NVDA to continue to see upwards momentum in today's trading. NVIDIA: Hearing Bear Stearns raises target from $39 to $42; Soleil raises target from $36 to $41;/ FBR raises target from $36 to $40 (35.29 ) -Update-