July 30, 2009

Oil Technical Analysis

Crude oil has really been trading well on technicals lately. It's actually been trading on technicals to the T. So easy to read the important spots. Here is an older technical trade set-up on oil that turned into a good trade for me.

I was actually going to post this a day ago the night before the beating it took yesterday. Sorry about that. Anyway, I actually missed the trade because I wasn't watching oil.

The first circle on the left is a somewhat weak shooting star candle. Just means sellers were particularly strong by the end of the day. Buyers were not in control. The significance was it was at the peak of price resistance. Next circle. Big doji right at resistance. Very bearish. The doji means there was a battle between buyers and sellers and it reflects major indecision in the marketplace. When a doji occurs at the extreme end of a trend it often indicates a reversal in trend. I noticed going back a lot of months a doji was a good signal of an earlier trend change to. Both of these clues taken together leads the chart to read more downside. It definitely happened after that doji. Yesterday was a huge drop. That day isn't on this chart but USL closed at 35.50. I think oil finished at 62 a barrel.

Also, if you are going to go long on oil for a longer term trade from what I understand USL tracks better than USO because of the way they rollover the contracts.

disclosure: no position USL

July 24, 2009

Dow Jones Index Technical Analysis

I pulled out a longer term chart of the Dow and there is what looks like a potential rounding bottom formation and failed signal on this last breakdown. Both of these are bullish. The fundamentals are hard for me to get a hold of here on a lot of stocks and the economy. I'd say stock prices are more likely to be overvalued fundamentally. I also strongly believe we will be in a range-bound market for many years. I'd be very surprised if we saw new highs on the indices anytime this year or next year. I'd actually be scared because I fear what the next crisis will be like. I think the economy and stocks should have cooled off and consolidated with the savings and loan crisis at the least.

All of that totally conflicts with the current market forces that are driving stock prices higher. I don't think market forces are always intelligent but using technicals can give me a better read on the short and mid-term direction. I don't have much experience with the indices technically so I'm treading pretty lightly here. One type of bottom formation is a rounding bottom. It looks very similar to the long term chart on the S&P and Dow. Confirmation would be about 10,000 on the Dow.

I like this next one the most right here. We were stuck in that range from May until just recently when it looked like the market was going to breakdown. The arrow points to that move. We actually did make a new low there below the chop. Then those sellers and skeptics got wiped out as the market forced them higher and prevented a breakdown. That was the failed signal. What that means is the strength here is very strong. If it can't go lower we can only go higher technically. This is beginning to be confirmed as new highs are being made out of this range signaling more upside potential. If we hold these highs or retest and run there could be much more upside in this rally. Really though, a no brainer time to go bullish and get long was when the failed breakout pushed above the trend support line. I didn't even think about the failed signal because I was expecting more lows and didn't flip the picture around which this chart says to do.

July 23, 2009

Top Short Watches

Congratulations to anyone that saw my Twitter post that GAEC was going to tank. I put that alert up a couple days ago before the annihilation when the stock was at $2.20s. The stock crashed today to $1.10 and closed at $1.60.

These are some of my top short watches.

FRZ sells ice cubes. See a pattern here?

Newspaper company.

Another newspaper

Yet another

full disclosure: no positions

July 21, 2009

Festival of Stocks at Modern Graham

Check out Modern Graham and the festival of stocks for some investing articles. My post I did on IFON and LDIS is there. I just took off my IFON for a gain of 20%. Post coming up on that and on my 2009 net-net performance.

Net-Net IFON Trade

I'm glad I learned technical analysis because it really helped me out with IFON. Actually, the way it is going right now it may have been the difference between a nice gain and tiny profit or loss. I used that red trend line(in my platform though) to see that the bull run was still alive after it had fallen back to $1 and slowly started creeping up around the same trend line. After I longed it at $1.58 all I did was watch it continue up the line. As it approached the $1.99 resistance from the other week(first red line) without breaking it strong intraday I saw the potential for a double top and pull-back. Not worth the risk of loosing the profits because of that possibility so far into this run it has had. I actually sold it yesterday at 1.92 before that last red day on the chart which is today's action. This exit looks about perfect right now because yesterday IFON only hit a high of 1.96. And right now it is looking like that was the end.

It very well could get a push over $2 but there is just something about those round numbers. Notice it never traded at $2. And I noticed that the buying has been coming every day and that had to end eventually. Drew that with a black circle. I was also thinking about the valuation. No longer in net-net territory here and not the kind of net-net I know well enough to run past that valuation. A buy right around $1 off that pull-back would have been sweet in retrospect because the technicals were there for it to be had but I'm happy with this trade. I had a loss today chasing a momo penny stock so this is offsetting the loss.

full disclosure: no position

July 20, 2009

Net-Net FSI International FSII On Move

I was looking through some scans and this chart stuck out. I drew the resistance line for the range it has been in.

This breakout looked interesting so I checked out some fundamentals. The stock happened to be a net-net. I think it actually rings a bell as a perennial net even though I don't scan for net current asset stocks as often as I used to. Unfortunately, it is a semi and I hate the history of its fundamentals. The fact that someone is buying this here on more than its average volume and taking it up is interesting. I'm thinking that someone may be coming in late? I've noticed some micro-caps like PXG would get accumulated after the bigger companies in the sector all got rotated into. I guess that would make sense because naturally the street is going to go after the Microsoft's first because of the liquidity then when that is exhausted and they still have money to put to work the only place left is smaller market caps.

Hard to find much good going on here. This is possibly better. "The Company intends to manage its operations with a goal to end fiscal 2009 with greater than $10 million in cash, restricted cash, cash equivalents and marketable securities." There is no long-term debt but there has been declining revenue growth and income for years.

Not very excited with the little info I have on the company fundamentally. Just watching this one right now. This isn't a good stock to invest in surely. To trade. Possbily. The technicals point to more potential upside with this rounding bottom and breakout if it holds another day or so. I've been up as much as 6% or so so far in net-net IFON. So far the stock is holding up well.

full disclosure: no position in FSII, long IFON

July 16, 2009

Net-Net in Play, Stock Daytrading Watches

I noticed these two net-net's awhile back because of the nice uptrend they were in and just longed one of them. I longed IFON at $1.58 because it is doing what I wanted to see. I wanted to see a bull flag with a good signal like I mentioned in that other post.

Well, I've missed a lot of this move off the flag but I feel good here because there were some big blocks of shares coming in today. Not to mention this is a tech name and a net-net play to boot. Thing is this is a high beta stock so it's probably just going to ride with the market good or bad like it has so far. I've got my exit scoped out and it will be if it breaks below this trend line it is in right now probably. I might also think about stopping out if it cracks below 1.20 because this is more of a key area right now.

LDIS is holding up well and just got a flurry of big volume days recently. I longed that one in this portfolio tracker I'm going to be tracking my net-net performance with. I had to enter a symbol to start up the account. I would have preferred to buy LDIS right here at .73ish on whatever fill I could get. From here on out I will always make a post before I place a buy in that tracking portfolio. I think this should be viewable by anyone even without an account there. Let me know if you can't view that page. I put up a great watchlist for daytrading and even some swing trading on my twitter page. It has been really good past couple days. http://twitter.com/StockPursuit

full disclosure: long IFON

July 14, 2009

Borders BGP, LivePerson LPSN Quick Look

I'd imagine forward EPS estimates are hard to get very accurate on. BGP is really volatile intraday. Good for daytrading. Consolidating now.

Stock didn't want to take out and hold resistance. PE Multiple looked a little rich. Didn't look that rich on asset valuation. My bias long-term on the stock is it goes much lower because of the business and the consumer but this thing keeps making higher lows on this uptrend here. Retail sales are later this morning. Good watch.

LPSN forward earnings estimates have been boosted. This one is holding that new support well. Very nice uptrend. Has been getting upgraded because of low valuation vs peers.

full disclosure: no positions

July 12, 2009

Stock Pursuit Ultra Links

Some good summary of some of the core principles of value investing. I left a couple comments on value investing in the comments section. Using fundamentals on the future and sometimes even the past will get you into trouble a lot. Most of the time I feel you are either a total contrarian or dead.

Simmons below wants to change some things. Yes, Glass Steagall! I read my college history paper thoughts on the present at the bottom here a couple times since the panic...I really was on to this crisis there...and my China call. Maybe if I remind myself and type this enough I'll figure out what held me back from selling my shirt to leverage up on shorts last year.

If you Google " 1907 Crash " that paper is 2nd out of over 1 million just to Wikipedia. It ranks for some other keywords to. When the crisis was raging at its height last year I got dozens of hits a day for those keywords as people were freaking out I guess. Funny as the stock market bounced a little the searches went to almost none a month. These past few days I've gotten 2 or so views a day and there was an increase before the sell-off. Could be insignificant and spurious correlation but interesting.
Ideas for fixing the $11 TRILLION of debt the US owes

Half the volume on the exchanges now is program trading and Goldman's system might have gotten out. I heard Goldman is notorious for manipulating Level II with disguising size.

Paul van Eeden is right again

Mohnish Pabrai lecture at Columbia U

July 9, 2009

Family Dollar FDO

Family Dollar FDO looks like growth at a reasonable price and is still a recession resistant company. Institutions really loaded up yesterday with some nice blocks. That volume was higher than it has been for 5 months.

Forward EPS is looking like atleast $2.20 so there is a 14 PE multiple. EPS growth will probably be low double digits. I think it could easily make it to 34 a share. Not sure how much follow through there will be if the market takes a major dive here. I'd bet on 34 atleast though. I like this stock here. click below or post title to continue

I like the steady uptrend that always reacts to the trend lines I drew. The circles I made are gap up days. Very consistently after a strong gap up day like we had yesterday and big volume spike the stock has kept getting picked up. Guess what this gap up and volume spike on trend line support yesterday tells me the stock is going to do? Take that with the fundamentals and this is a good entry.

full disclosure: no position

July 8, 2009

Oil Double Short DTO ETF

Oil is dead right now technically. I put my DTO oil double short ETF entry up on Twitter the other day. I put it on at 89.50. I noticed there was a messy double top and that oil was a leading indicator of the stock market on the way up. I'm real bearish here on stocks because nothing seems to have really changed enough. On the chart I also noticed oil made a big breakdown on a gap day that I drew the arrow to around 35 which is a powerful signal. I entered the trade on that breakdown gap. There was actually a gap down the day before to which was key as well.

I drew some key support lines. It looks like it is already starting to take out the next support at 33. I'd imagine there will be a little bounce here soon. I'll probably tighten my stop loss here tomorrow or just take my profit.

full disclosure: long DTO

July 6, 2009

Net Cash Stock MATH Special Situation

Thanks to a reader who left a comment on MathStar MATH in the last post. They look poised to liquidate for $1.25-1.40 a share. Tiberius Capital just upped the offer to $1.25 a share this morning. It's 7:58 am EST right now. Stock closed at $1.18 Friday. I just found a couple more net cash potentials one seemed to be in the liquidation process. I'll post them up later.

full disclosure: no position at time of writing