Thursday, April 17, 2008

Not a Ton of Super Charts

After going through my scans, I have been somewhat disappointed for the second straight day. There were some nice breakouts today in stocks like DAR, DGLY, and MEA, but I didn't like any of these charts enough before today based on the indicators I like to use. I would consider DGLY if it pulls back because it appears to have broken out of a cup with handle pattern today, but it is very thin (65 K average trading volume) and cheap (only $7.50 before today). Perhaps when it gets over $10, more volume will come in and I can enter then. I try to remind myself often that I am looking for the best of the best, not just any chart that may go up. I want to try and get big winners, and I like using Telechart's BOP and Moneystream to help find those possible big winners. WSCI, BKE, and GU, my three current holdings, showed the type of patterns that I like to see and I am overall happy with my holdings. I just wish the market was presenting more of those really nice, exciting charts right now.

I put a few charts below that I am watching but none excite me. The energy, steel, and agriculture stocks are the ones showing strength right now but I am not buying them up here - way too extended. I have some of those in the watchlist to see if they can rest or pullback to support on lower volume. Solars are another group I am watching, but they got beat down today, supposedly on some Senate issue, and I am a little more hesitant to enter a stock like CSIQ.


Shippers all look like they have similar, coiling-type patterns that they could break out of. You can look at the charts of DRYS, EXM, EGLE, and ESEA. Unfortunately, these are not leading stocks and I don't really like buying stocks that have been beaten down so much. Maybe I'll take a shot if they do breakout.

Charts from Telechart2007, Courtesy of Worden Brothers, Inc.

Taking this lack of great charts over to the general market, I am now somewhat questioning whether or not we will be able to break above this resistance and turn this rally into something special. Yesterday was very nice, today was OK considering we were up big yesterday, but I want to see what tomorrow brings. I want to see a few more days of nice-sized gains on big-time volume. That being said, the trend is still up until proven otherwise, and I will respect that. I would recommend doing the same. If charts you like pop up, then it is probably still OK to start small positions and add upon seeing follow-through, like I did today with GU. It's looking, though, like the time to enter stocks was at the end of last week or beginning of this week, and hopefully you were able to do so. Don't chase here - remain disciplined. I am interested to see what the great report from GOOG brings us tomorrow. Let's hope a nice-sized rally to end the week. Best of luck!

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