Saturday, August 7, 2010

Three stocks on my radar...

1. PWER: I had highlighted this stock as a potential for Friday's trading. However, I passed on it in the morning since it triggered while the overall indexes were tanking hard. So I did not want to take a position only to be stopped a few hours later. In addition, I am either at or close to three day trades in the past five days. So I do not want to take any chances with this rule. Although I could have entered later in the day. Again my focus was not on the markets and since I was not following price action through the day, I was not comfortable taking a position. So again I passed. However, I will be looking at PWER for a swing trade off the 30-min charts next week.

2. SPRD: On the long side, SPRD is my best idea at the moment. Under the current set of market conditions, I would take this trade 10/10 times. However, SPRD reports next Thursday. There is no way I am going to buy and hold SPRD into earnings and put my account at risk of a 20% - 25% draw down thats completely unnecessary. I will keep it on my watch list and see what it does after earnings. Then I will look to enter if it offers a good set up.

3. V: I am still looking to get short Visa for a position type trade as opposed to a swing trade. I highlighted the set up in Visa in one my previous posts so I will not bother to go over it again. I have my eye on this position in case so that if the markets break down I would not be caught off guard and will have at least some exposure on the short side.

I have no idea what the markets will do on Monday or any other day. I just swing with the odds. The current uptrend means that swing longs are higher probability trades than swing shorts. Especially after the showing of strength on Friday, this is even more true. However, on the intermediate term time frame, position shorts are higher probability trades than position longs as the T2108 my main tool for timing intermediate term trends has been overbought for a couple weeks now and indicates that a steep correction could be on the near horizon. Still it must be kept in mind that the rally can go on for weeks before the trend of the markets changes.

Hence the reason I have prepared my self for both scenarios with swing longs in case the up trend continues and one position short if we get a correction. Thats my plan.

Good luck with your own!

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