Wednesday, May 14, 2008

Four More Earnings-Related Breakouts, Still Some Nice Charts Out There

Here are the earnings-related breakouts today. I actually reentered RCH after-hours as I think it may have a little more momentum to it - I would not be surprised if it pops again tomorrow. That being said, it will probably head down to $7. Quite possible some seller's remore there. CAAS held its 200 day moving average intraday and hopefully has a little more momentum in it as well. Both companies did put up tremendous reports.

RCH, CAAS
FSIN, CVLT
Charts From Telechart2007, Courtesy of Worden Brothers, Inc.

It might not be the best time to start longs with the nasty last hour of trading today, but there are still charts out there that look nice or will be nice with a few more days of rest. Here are the ones I see, although I don't plan on entering into any of them as of now. I would like to see where the market goes from here before committing more capital to any stocks.

MA, MEA
GXDX, IPGP
MORN, NCOC
PDO, DMLP
Charts From Telechart2007, Courtesy of Worden Brothers, Inc.

These are the short positions I took at the end of the day as hedges against the market heading lower. I don't know if it will - things certainly looked ominous for the Nasdaq today. It seems like the market is getting a little complacent here - midday, the VIX hit its lowest levels since July of 2007 before coming off those lows in the last few hours. If we do head lower, I really don't see a ton of great short setups besides possibly the agriculture stocks, so I would probably focus on some inverse ETF's instead of individual stocks. We have to break the support levels I mentioned earlier, however, before I would recommend getting heavily short. Remember that there are already a ton of shorts out there already betting against the market, so that may provide somewhat of a floor for any move lower.

QID, AAPL
SMN, DSX
Charts From Telechart2007, Courtesy of Worden Brothers, Inc.

Options expiration week always tends to be volatile, and it looks like this week will be no exception. We'll see what tomorrow brings and if the last hour was a sign of more things to come, or just a mirage. Best of luck Thursday.

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