Good evening traders. What a day! The buyers are still stepping in doing everything they can to keep the market propped up. I mentioned last night that often times when markets whipsaw back and forth it is a warning signal that a trend change may be happening. All of this back and forth means there is a lot of indecision and it has been quite a battle between the bulls and bears. Someone will eventually get exhausted and considering all of the buying over the past six weeks I would use caution on long positions. Earnings reports from Amazon and Microsoft looks like it will put more pressure on the indices overnight as investors were not really enthused. So until we find out who wins stay nimble with your position management and be sure to protect profits.
BULLISH Play Updates
Excel Maritime Carriers Ltd. â€“ EXM â€“ close 6.60 change -0.08 stop 5.90
EXM was under pressure early again today but buyers stepped in and the stock closed well off of its lows. On the intraday chart today EXM formed a bull flag, however, it closed the day unresolved. For the flag to be resolved to the upside EXM needs to break above $6.65, on the downside it needs to break below $6.55. $6.55 this has also been acting as key pivot level for the stock over the past several weeks so I am happy EXM closed above it. The stock is also still holding its daily uptrend line and is above its 20, 50, and 100-day SMA's, but it still needs to deal with its 200-day SMA at $6.73. I am looking for EXM to break through the overhead resistance levels (near $6.85) and retest its highs from January, which is near our target of $7.45. Readers who have not entered positions can do so if there is any weakness in the stock. Our stop is below the 50-day SMA at $5.90 but we plan to raise it if the stock breaks above $6.89. Our time frame is several weeks.
Current Position: Long EXM stock @ $6.55
Entry on April 20 at $6.55
Earnings Date 05/19/10 (unconfirmed)
Average Daily Volume: 1.2 million
Listed on April 19th, 2010
Medicis Pharmaceutical Corp. â€“ MRX â€“ close: $25.33 change -0.24 stop: $23.95
MRX gapped down at the open today and the selling continued until about noon when buyers finally stepped. The stock closed near its highs but was still down -0.94% on the day. After strong upward moves on Monday and Tuesday, Pharmaceuticals have been under pressure the last few days and MRX has not been spared. We still have a gain in this trade but the stock keeps getting knocked down at the $25.80 level. Traders should consider selling or tightening stops if MRX rallies into this level. Today's close was below the 20-day SMA which is currently at $25.47. Hopefully the recent declines are only retracements from the gains earlier in the week. Our stop remains at $23.95, which is below the 50-day SMA. Our first target is $26.50 and our second target is $27.75, which is just below its 52-week high. I am not suggesting new positions at this time.
Current Position: MRX stock @ $25.00
Entry on April 14 at $25.00
Earnings Date 5/06/2010 (unconfirmed)
Average Daily Volume: 1.0 million
Listed on April 13th, 2010
Patterson Companies - PDCO - close: 32.12 change: +0.16 stop: 30.49
PDCO recovered today closing higher +0.50%. PDCO almost traded up to Monday's high of $32.23 before backing off at the end of the day. We are now up about +2% in this trade and I am still urging readers to be cautious. It still appears PDCO wants to test its highs from 2008 near $33.25 but if the indices can not break to new highs, PDCO may not be able to get the legs to follow through. The stock is also forming a bearish wedge pattern and if it breaks too far below $31.00 I don't want to be involved. Officially our stop is $30.49. I would like to lower our target to $32.50 and will gladly take profits should PDCO trade to this level. Conservative traders should consider taking profits now or use stops to protect profits.
Current Position: PDCO stock at $31.50
Entry on April 14th at $31.50
Earnings Date 05/17/10 (unconfirmed)
Average Daily Volume: 975 thousand
Listed on April 6th, 2010
BEARISH Play Updates
Powershares QQQQ Trust - QQQQ - close: 50.31 change: +0.28 stop: 50.95
After weakness this morning QQQQ closed over $1 higher off of its lows. The ETF peeked its head above last week's highs, but the NDX futures sold off more -10 points in the after hours after Amazon's earnings report. Amazon and AAPL really propped up QQQQ today, while QCOM and Google were a drag on the index (GOOG has been for several days). After Microsoft and Amazon reports today I expect QQQQ to be under pressure again tomorrow. Last night I said I expect the NASDAQ to be volatile in the coming days as the markets are being driven by earnings and news. Well, this is obviously still happening as evidenced by today's action. I am getting impatient on a break down but am still willing to give this time. In my opinion buyers can't keep showing up as they will get exhausted. But my opinion doesn't matter. If QQQQ trades down to $49.45 tomorrow traders may want to consider exiting positions, or at least tighten stops. This is a key point where the selling has stopped and the stock has turned recently. QQQQ has still not touched its 20-day SMA (currently at $49.01 and climbing) since February and it is way overdue for a meaningful pullback. Our aggressive target on this trade is $47.00 but we are looking to exit if QQQQ trades down to $49.45 tomorrow, which will be a small loss. Our stop is $50.95.
Current Position: Short QQQQ at $49.05
Suggested Position: Buy PUT May $49.00, Ask at entry, $1.00
Entry on April 12th, 2010
Earnings Date Not Applicable
Average Daily Volume: 49.4 million
Listed on April 10, 2010