It’ll be interesting to see what effect oil breaking down through alleged support at $55 will have on the stock market. (I’m reminded of that old trading rule – “Bear markets have no supports and bull markets have no resistance.”) Most of the oil plays I see are too oversold for me to try to short them here. Besides that, I hate the way oil jumps around, so I’ll just leave that sector alone like I usually do.
On Today’s Calendar:
- nada
More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic
Potential swing trades:
See one of the recent ‘Chart Reading‘ posts for some potential swing candidates.
Potential day trades:
(From Briefing.com)
Gapping Down
ESCL -23% (to be delisted from Nasdaq tomorrow), HELE -12%, AGIX -10.5% (co says its heart drug trial results will not be available until late in Q1; the stock had run the past few days on speculation results were imminent), TLB -10.5% (guides below consensus), EMAG -10% (provides disappointing guidance; also Wachovia and JMP downgrades), S -9% (provides disappointing guidance, cites margin pressure; will slash 5,000 jobs; also multiple downgrades), LFC -7.6% (profit taking after 12% move yesterday), CELG -5.2% (disappointing guidance), LWSN -4.5% (reports NovQ, misses by $0.01, guides FebQ revs below consensus), AES -4.3% (down on news of Chavez plan to nationalize power cos; AES owns 82% of Electricidad de Caracas, the largest privately owned electric utility in Venezuela), VIMC -4% (Morgan Stanley downgrade), ACGY -3.5%, GRMN -3.3% (Merrill downgrade), ADO -3.3%, STO -3.2% (down on Chavez news), BP -3% (likely to miss production target – WSJ), REP -2.7% (Deutsche downgrades to Sell), SFLK -1.8%, E -1.3%
Gapping Up
ACLS +9.4% (reiterates Q4 guidance, says it is seeing high order activity), HIHO +7.3% (extends recent momentum), OPTM +6.9% (Cramer bullish on Mad Money, calls it the most overlooked IPO in 2006), CAKE +6.1% (reports Q4 revs above consensus; also Raymond James upgrade), ANGN +6.7% (reports Q4 revs), CPSL +4.6% (extends recent momentum), TASR +5% (CEO appears on CNBC), CYTK +3.3%, STEM +3.6% (extends momentum, +40% in 4 days), NOVL +3.5% (JMP Sec upgrade), AMR +3.3%, SGEN +2.7% (Needham raises target to $10), BSX +2.5% (to cut 600 jobs), PHG +2.3%, GLW +1.3% (reiterates Q4 guidance), AAPL +1% (MacWorld opens today).
Disclaimer & How I use this list
$54.60 a barrel right now.
USO down of course. I agree about the plays in that sector being over done. Heck a short came up on my scan for USO @53.34 and I passed on it. Man, do I look chicken now! ~:>
BTU came up on my scans last night as a possible short. Pulling out a year on that chart is just ugly, but one has to wonder: how much worse? Obviously, everything can fall to zero, but it looks like the bear party is in the 11th hour on some of those stocks.
Then again…the bears partied pretty hard in some of those tech stocks after their big run years ago.
Either way, it should be interesting to see where the oil producers step in to protect the price.
Better to wait for a base to form before going long oils/crude. Venezuela is down more than 8% today and halted. We had Thailand down 15% in december, Russia is down 6% today. Don’t tell me this is not going to become another “contagion”?!! I am shorting, though this bull continues to baffle me
My long swing trades have barely turned a profit for the past month. Holiday trading is tough…just not enough volume to push the stock prices around.
Anyway, I like this falling oil. Maybe it will help spur the general markets to new highs…it’s just wait and see.
I’ve switched to day trading gap plays and I’m meeting some success. Does anyone else day trade gaps? I like the combination of minimal risk (tight stop loss) combined with strong momentum from the volume surge that can net a hefty 5% profit or more in a single day. I’ve been using the 3 Bar Rule on the 5 minute chart to create buy/sell signals. Does anyone else use this technique? Here’s the website that explains the 3 Bar Rule for morning gap trading strategies:
http://www.hardrightedge.com/wheel/hremorninggaps.htm
I’m interested to hear how other people are trading stocks that gap (both for day trades and swing trades).
Anyway, I like day trading gapping stocks because you can do it even in whippy market conditions like today. I was able to net a 2R gain with minimal risk today even though the market was all over the place. All the extra volume flowing into the stock from the gap move really helps the stock to beat its own path during the whippy market. Any comments, suggestions on how to improve gap plays?
thanks,
van
Thanks for the link Van! I am a beginner looking for techniques to try in my demo account.
Could you please tell me what do you mean by “2R” ? Is it 2 percent ?
Makutaku, you must be a new reader of my site. Check out “R Multiples Defined”
Van, there are tons of gap traders at Trader-X’s site. I’m sure you can get some good info over there.
I’ll post on the sector rotation tomorrow. Lower energy costs are good for business in eight of the nine S&P 500 sectors … and good for the transports … and good for tech …
Bill
I kind of disagree that “Lower energy costs are good for business in eight of the nine S&P 500 sectors”. I don’t disagree entirely, but I think it depends. If lower costs are because of lower business demand for energy, then it means those sectors are already in trouble. This is why crude rising in 2005/2006 was along with rising stock market/economy. Now crude is dropping, I bet you stock market/economy will be dropping at the same time. The drop may come from lower demand. See more analysis/comments at my blog.
Your assumption appears to be that oil (and perhaps other commodities) were as high as they were entirely because of fundamental factors. I believe that oil, copper, gold, natural gas, and silver were excessively high based on speculation and not supply/demand. Therefore the money coming from those commodities, and eventually from the corn/ethanol sector, will be looking for another speculative home. Perhaps that will be equities.
We’ll find out together, won’t we?