Thursday, October 14, 2004

Today's plays

I saw 3 great trades and took two of them. The one I passed on was shorting UCI. UCI has been in a 6 month long up-trend without ever wavering. I was looking at its chart last night and noticed a large expansion of volume over the last week, but a curiously well defined price ceiling around $35. UCI was getting hit with distribution and was starting to roll over. It opened today at $34.75 and closed down 12% at $30.41.

Early in the morning, nothing on my watch list was working out the way I figured it would except for PARL. PARL ran from under $10 to a peak of $16 over the last 2 weeks, trending beautifully as it did this. I noticed it was starting to droop, just like a lot of other stocks right now and put it on my watch list as a short. I got shares short this morning at $14.02. PARL closed down a little over 4% today at $13.78. I'm still holding the short because the MACD on the naz shows that we are entering a down-trend and I expect a lot of the stocks I am seeing rolling over right now are going to get hammered.

The 3rd great setup I saw today was EXM. I've been sitting on a bunch of cash for about a week now waiting for one of two stocks to confirm a new up trend: HRT or EXM. EXM is a sea transport stock, and HRT is a medical stock, so the odds are that only one of them will be a good long play at a time. Commodities won out, making EXM the play. The stock closed up 13% today, I got in after about 11% of the rise at $34.80 because of a really bad execution. Incidentally, I tried to get into HRT on Monday and got stopped right out for a tiny loss the same day. I'm guilty of jumping the gun sometimes, but using a well positioned stop keeps me out of any serious trouble: HRT lost almost 10% today! Stocks are so volatile right now because oil and the indexes are thrashing around trying to figure out which way they will go! In the mean time, stocks that are set to go up are going up in a huge way, and stocks that are set to go down are going down big. The volatility is great for making $$$ right now if you know what you are doing and are lucky enough to not get caught in a reversal.

A few stocks to watch tomorrow:

TOPT - watch on the long side

TASR - will break from its range one way or the other someday!

RIMM - just started an uptrend, but dangerous to be going long right now IMHO

FMD - looks like it is rolling over


Oil will dictate what the market does for the rest of this week, so keep your eye on that! It probably got enough kick today to bring it back into an uptrend, which makes the oil stocks tempting =)

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