The market's recovery off today's intraday low is bullish but I think it's only short-term bullish. Stocks look poised for an oversold bounce but I don't think the rebound goes very far. Thus I'm reluctant to add new positions either bullish or bearish. I am adding one new play but if you do choose to jump in use small positions to limit risk.
Wednesday could see a lot of volatility. The ADP employment report will be a precursor to Friday's jobs report. Plus the FOMC will conclude their two-day meeting. Their announcement on interest rates and their comments on the economy should be released around 2:15 p.m.
NEW BULLISH Plays
Southern Copper Corp. - PCU - close: 32.71 change: +0.71 stop: 30.95
Why We Like It:
Copper miner PCU has found support near $31.50 for several days in a row. Today's bounce from its 50-dma also produced a bullish engulfing candlestick pattern. This reversal needs to see confirmation. I'm suggesting a trigger to buy PCU at $33.80. If triggered our target would be a new 52-week high at $39.50.
Commodity-related stocks are bound to be volatile with the dollar moving so much. I'm suggesting small positions (25% to 50% your normal size).
Entry on November xx at $xx.xx <-- TRIGGER @ 33.80
Change since picked: + 0.00
Earnings Date 10/22/09 (confirmed)
Average Daily Volume: 3.5 million
Listed on November 03, 2009