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The opening gains this morning are fading fast. Initial reaction on a reaction? Just does not look good. Confidence in the broad markets remains weak.
I don’t need to worry about GRP anymore. GRP hit my stop point and my trade closed automatically. So that takes care of that.
Current swing trade GRP is set to report earnings after the market closes today. Normally I would sell any swing trade before earnings are released to limit risk. I am currently calculating the downside risk if I were to hold through earnings. I am expecting GRP to report in line or better than expectations based on previous press releases and business updates from the company. And that the energy sector has been good over the previous few months and this should be reflected in this quarter.
Before the day is done I will post an update on my GRP position and if I will sell or hold before earnings.
A divergence is a powerful leading indication of what is to come. When you look at a stock chart and see the price dropping but technical indicators are going the other way that is a ‘divergence’. And it can signal a pending change in the works. Acme Packet (APKT) is one of those types of charts. APKT went public last year and like many IPO’s they sell off to the level that the ‘market’ thinks they are worth. And in many cases the sell off is over done and it results in a period of settlement. In the settlement period the sellers and buyers reach an agreement on what the price should be. On the APKT chart you will see 3 point where the price hit a point and each time buyers would not allow it to go any lower. This happened 3 times at the same price point. This is significant in itself. But more important is the divergence in the technical indicators. Examine the MACD, RSI, and the CMF. Notice how they have been trending upward while the price was working downward. What this shows is that the market is starting to change it’s mind on APKT (in the case of the CMF indicator, even before the bottom was reached). When ever you come to a chart where you see a divergence of price vs indicators take notice! Something is in the making.
A good day for the RebelTrader portfolio. This morning I entered a new swing trade on NightHawk Radiology (NHWK) at $19.40 (1/2 position to start with). NHWK continued upward throughout the day and closed the day up 7.4% ( up 3.9% from my entry point). I had NHWK on my watch list since Tuesday and today it performed very well and met my buy point. I will monitor NHWK for the next entry point for the remaining 1/2. With the big gain today I expect to see some pullback on profit taking but I don’t see that lasting too long before it continues up again.
Today I sold NetGear (NTGR) because I saw what was starting to look like it was topping out. That means that there just was not enough buyers left to out number the sellers and that we were going to end the day with a doji (doji: The name given to a chart pattern which signals indecision). With that trading pattern developing I decided to take the gains and close the trade. NTGR provided a 5.1% gain in 10 days. Remember that it is not important to squeeze every penny out of a trade, what is important is that you have more winners than you do losers. Don’t focus on how big the gain is, instead focus on keeping the losses small. The gains will add up.. Every gain is a winner!
Both posting additional gains for the Rebeltrader portfolio. BIG is trying to stay green. Not giving up on BIG just yet. GRP also posting more gains to the portfolio this morning.
RebelTrader open swing trade received an upgrade this morning from Bank of America. They raised their rating to ‘buy’ and a new price target of $67.00
GRP is already performing well since I first entered the trade. This upgrade should bring some additional gains in the coming days.
Right out of the gate this morning it was looking like it was going to be a really bad day. By 1pm the indices were down hard and it was looking ugly. The financial sector was a big killer of the market today and it was for the most part expected. That ugly sub prime issue was on the table again after that announcement late yesterday from Bear Stearns regarding two of their hedge funds being worthless. And some earnings from Intel and Yahoo were not great which put an ice cube into the hot tech sector. But by the end of the day the ice cube had melted and we had a fairly good recovery across the board in the last two hours. We still ended the day down but no where near the levels we saw earlier in the day. Financial stocks were still badly beaten down at the end of the day.
Oil hit $75.00 today and that did not help the overall market either. With that the energy sector was one of the few sectors today which saw buying interest. The railroad stocks were one of today’s winners after CSX topped expectations with their record revenues. Investors were also looking for Ben Bernanke to say something to lift their spirits but he only added more gloom by saying that the sub prime issue had deteriorated significantly.
At the end of the day the big money started buying into the beaten down prices in the hedge that today’s market drop will be short lived and we will once again resume an upward march.
Rebeltrader open swing trades GRP and WWAT saw gains today with WWAT getting 17% on news of a new solar array farm to be installed in Spain. I expect some profit taking on the WWAT surge tomorrow but that is to be expected on anything that runs up 17% in one day. I won’t panic if I see some early profit taking. I did say at the beginning of the WWAT play that it would likely experience some large swings and that is normal as it works it’s way up. I may sell half of the position tomorrow to lock in the gains and let the remainder ride for a while longer. But I will wait to see how the trading looks tomorrow before deciding.
One observation I have today is that I am seeing the number of “sell the news” reactions increasing. I am somewhat disturbed by that in that I sense some large money is taking their gains very quickly off the table these days. Almost like a squirrel will bury his nuts for the winter. Lets hope that the increase in “selling on the news” reactions I am seeing is not a sign of the bulls getting ready for a long winter. For now the charts say we are still bullish so bullish it is still, albeit cautious still.
After the market closed today Ebay released their numbers and they were solidly good. Also the numbers from IBM were good. If we can get the financial sector to recover then we will be on our way to green again.
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