Stocks looks ripe for further upside

Dear readers, no matter how bad the headlines may seemed at this moment, the charts are hinting at further upside for stocks as beaten down financial stocks are now bouncing off long term support with signs that longer term players are stepping in to purchase the stocks at these levels. These behaviors exhibited by the financials are very positive indication that the financial stocks have bottomed. Let's check out the weekly charts for stocks in this post (click on charts to enlarge).

Bank of America (weekly)

Citigroup (weekly)

Casino stocks are also breaking their immediate resistance level and are now free to move higher. The weekly  charts indicates that Las Vegas Sands (LVS) has broken out of the Ichimoku Clouds and is starting a new trend.

Solar stocks did not took part in any upside moves at all ever since the European debt crisis was reported in 2010. This sector is severely beaten down. We could see solar counters moving higher soon as oil prices looks to resume their uptrend and the fact that many of these solar stocks have bounced off long term support. It would be good risk to reward to initiate your long positions at these beaten down bargain prices.

Yingli Green Energy (weekly)

Renesola (weekly)

Do keep an eye on the financial stocks as i believe that we could see them finally waking up and leading the charge for the overall market in moving higher! Have a great week ahead.

Good opportunity to load up! Buy buy buy!

Dear readers, the news on the Greece default and that the world markets reacting on a sell-off had dominated headlines around the world this week. Despite how gloomy the news are currently, let's just focus on the price action. Interestingly, the charts are telling us to buy the dips. We should see higher stock prices to come in the weeks ahead. Solar and the financial stocks looks beaten down and could possibly have formed a bottom. Good time to load up. Gaming stocks are also on a roll.

S&P500

Las Vegas Sands

GT Solar

Yingli Green Energy

US Steel

American International Group (AIG)

More downside risk in the weeks ahead

These are gloomy times for the markets and investors but not so for traders as good money is being made as the markets appeared to be trending lower. Rallies to resistance were pounced on by new short-sellers and desperate investors wanting to dump their stock holdings. Many stocks from different sectors are already at favourable level to initiate low risk shorts. I have an earlier post here last week (click to read) whereby i had discussed on the failing energy sector as oil prices look like they are ready to drop as dark clouds loomed over the weak economy. This is a 'short the rally' market. Any bounce in prices are good opportunities to offload your holdings if you are still not in cash position. Do not fight the downtrend.


ERY Drexion Daily Energy Bear 3X

LVS - Las Vegas Sands

APKT - Acme Packet Inc.

CAT - Caterpillar

GE - General Electric; widely know as the bellwether stock of the economy was seen leading the charge down through the 200day MA. Definitely a sign of bad times to come.

Prices for precious metals are also breaking down as the Greece fiasco played out in the media. The markets are forward looking and I believe they are already pricing in for a higher US dollar environment. I have no idea what it will mean for Greece though but the markets apparently doesn't think its good !

Gold

Silver

The financial sector looks beaten down. However i wouldn't touch them yet. I am keeping a close watch on the financial stocks for any signs of life as they should be the sector that will lead the economy out of this bearish market.

Good weekend to all.

Time to Short Sell

Dow Jones and S&P500 plunged big time on Wed on huge volume. My sense is that we could be having a near term correction. We are also seeing more volatility and the erratic price action of stocks could be interpreted as topish signals by the bear camp.

Dow Jones Index

S&P500 Index

Las Vegas Sands (LVS) retested its 50day MA and was currently rejected at the level. It has a reversal hammer candlestick pattern on high volume which to me is tell-tale signs of an overhead supply area. Price action is currently below the Clouds and is a short-selling trade, in my opinion.

The financials are breaking down again. They are looking cheap but i wouldn't touch them until they display strength again. The saying "What is low does not mean it will not go lower" really does hold true!

The chart patterns are looking increasingly like the short patterns depicted in William J O'Neil's book "How to make money selling stocks short". I have got an earlier post here. Do check it out.

Its best to be in cash if you are not shorting the market. We will have to wait for proper bases to form before going long again. Patience is the key.

Dead Cat Bounce or Not ? 27 May 2011 (Friday)

The Dow Jones Index bounced back up for the past 3 days to retest its resistance after dropping huge on Monday this week. My bias is to the downside though as many stocks are exhibiting topping patterns. My interpretation of the general market sentiment is that this should be a dead cat bounce and we should see more downside coming in the weeks ahead. Of course, do take my forecast with a pinch of salt should the markets rally even higher.


Dow Jones Index

 

Nasdaq Composite

Las Vegas Sands

Caterpillar Inc.

Contrasting fortunes: Banks and Casino stocks

The Dow Jones shed 140 points on Monday and is just nesting at the 50day MA now. It needs to close above the 12272 mark to show that the uptrend is in place or we could see more selling taking place. This could also be a double top formation for the Dow. I would not recommend going long at this moment in time until we see the Dow at least displaying some strength. Be in cash position and wait for the market to show its hand.

The banking sector looked weak. Any rally should be sold until selling has subsided. Some signs to look for would be low volume and narrow price action.


Bank of America (BAC) gaps down on high volume.

Our financial barometer broke its trend line yesterday when it gap down. This could trigger more selling if it fails to get back above its symmetrical triangle chart pattern. Not looking good. Either be in cash or shorting the market at this moment.

Let's take a look at JP Morgan as its stock price experienced a huge volume sell off. Its stock could make an attempt to fill the gap and retest the lower channel of the trend line to confirm the weakness if it fails to get back above into the triangle chart pattern.

Casino stocks are experiencing remarkable strength despite the weakness in the overall general market. I am impressed.

Las Vegas Sands

Melco Crown Entertainment (MPEL) - Strongest of the pack

MGM Resorts - Weakest of all casino stocks

Have a good day!

I hope I am not being too PARANOID !!!

Something just doesn't felt isn't right... Look at the daily chart of the Dow Jones Index (Click to enlarge chart). A break of the neckline will confirm the double top. Long way to go however, one can take note of the mental stop at Ichimoko support at 12003 points. It is of course too premature to make a call for a double top.

Recommendation: Go to cash position! We can always buy back our shares but losses are normally very hard to reverse. I am just reporting what i am seeing now on charts. (Click on chart to enlarge)

What's more.. JP Morgan reported earnings yesterday and beats expectations but its stock sell down on above average volume. Not a good sign. Charts never lie.. remember to Trade What You See! See chart below (Click to enlarge). Nonetheless, i am now in cash position after I was stopped out of my BAC trade.

Some more clues:
Remember the bullish triangle on weekly chart of MGM i posted about 1 week back? Upon zooming in onto the individual candlestick, this is what we see: (Click to enlarge)

 

This is what we see on daily chart of MGM. Weekly charts and daily charts are not kinda synchronized as compared to the October 2010 period. Not a good sign? Maybe...

I will definitely trade what i see but something just doesn't feel right at this moment.. I am on my guard now. Trade what you see.
Recommendation: Go to cash position.

United Steel (X) & MGM Resorts International (MGM)

Looking at the weekly charts of both X and MGM, one cannot help but feel that prices are indeed going to break higher for now unless the lower channel trend line of both stocks are violated. While it may seemed too premature to said that the both stocks are now forming the last leg of the lower lows of the bullish triangle on the weekly charts, one cannot deny the fact that the bull run is pretty much intact. The charts do not lie.


United Steel - X

MGM Resort International - MGM
MGM looks to be a low risk buy now based on weekly charts.