Thursday, May 20, 2010

APKT continues to hold up beautifully!

Despite the nasty sell off in the markets today with the DOW, NASDAQ and SP500 closing below their 200 day MA for the first time since early 2009 and right near their low for the day; APKT closed in the upper third of its daily range today and did not even touch the $24.00 support level tested twice before.

As long as APKT continues to act stronger than the overall markets on the intra-day and daily time frames and does not crack the major $24.00 support area on heavy volume, I will maintain it on my watchlist and look to go long of it.

Despite APKT's resistance, the sell off today did alot of damage. For instance, I do not find CSTR as attractive today as I thought it was yesterday. Also although APKT can be swing traded, the wide stop I would have to place on account of its wide candlestick today will mean a minimum target (3R profit) beyond the breakout level. At this point in the correction, I am not going to take a swing trade with what I consider a target with a low probability of being hit within 2 - 3 days.

What I am looking to do with APKT, however, is to position trade it off the weekly charts. Sort of like a swing trade except off of the weekly chart. So I will be looking to get long tommorow on a break through the pivot point of $27.75 with a 5% stop loss or if this does not happen next week on a break of the current week's high (possibly $26.32) with a 5% stop looking for minimum 20 - 25% move over a holding period of at least 3 - 4 weeks.

Unlike APKT and CSTR, I still like CRUS for a swing trade. Buying it above today's high ($12.75)with a stop below today's low ($12.00) gives me a minimum target of $15.00. This target is below CRUS' 52-week high and I believe the odds that this target is hit within 2 - 3 days if the trade confirms tommorrow is very high. Plus if CRUS breaks out to fresh highs there is the possibility that I can cash in on profit well in excess of 3R.

So I will be looking at CRUS for a swing trade tommorrow. I will also be keeping an eye on APKT in case it breaks above $27.75 tommorrow but if this does not happen which seems more likely, I will look to enter next week as outlined above for a position trade.

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