Monday, November 21, 2005

Watch list for week of 11-21-05

The nasdaq has rallied right into a major multi-year resistance area. I wanted to post the weekly chart illustrating this but the chart uploading service seems to be down right now. I'll try again later. With that in mind, the highlights from this week's market homework software scan are also right at major resistance. If the market breaks down instead of up here, these stocks may make better shorts than longs. Here is the list:



Those links are all the daily charts, but I also look at the weekly charts. Of particular interest is the cup & handle pattern on CRUS's weekly chart. CRXL's weekly chart shows a long uptrend. ALY's weekly chart is interesting because you can really see the price action tightening up as the stock becomes more liquid. If you look back at the price action in TZOO before its monster runup, the price also tightened up in a very similar way as the stock gained interest. It is easy to see lots of volume move into both of those stocks.

This week will be an interesting one. At key turning points like this one, my activity goes way up as I make bets in both directions. I build on the positions that work and quickly cut the ones that don't. The trading range the nasdaq has been in since the beginning of 2004 has got a lot of people in short-term trading mode because it has worked better than anything else for so long. For example, Trader Mike switched exclusively to day-trading after being a swing trader for years. I'm also guilty of shorter term trading more than usual over the past 6 months or so, but I'm trying to orient my thinking more towards a longer term approach where positions are built over weeks and months.

I'd also like to shout out a special thanks to Gorden Gekko at The Knight Trader for giving me the heads-up on an amazing chart: SWSI. I'll be watching this one with interest.

1 Comments:

At 10:40 AM, Blogger Matt Norris said...

Jon,

Great read as usual. I can't wait until I have the time to get back into the market. Just too much going on with work right now to feel that I could responsibly handle my own trades. Of course, the thought of paying someone to do it for me also makes me sick. Guess I'll just keep reading and learning so when the time comes, I am at least sort of ready to get things going again.

Between this site and several of the links on this site, the amount of information available is incredible.

-Matt

 

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