Top Trade Ideas for the Week of February 7, 2011: The First 5

After looking at over 700 charts, I have found some good setups for the week. This week’s list contains the first five of which are below, to get you started early. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which looks for Gold to continue higher with Crude Oil to continue consolidating with a bias to the downside if it breaks. The US Dollar Index looks to continue higher with US Treasuries lower. The Shanghai Composite will start trading again mid week and looks to continue higher with emerging markets continuing their broad range consolidation with a bias to the upside. The Volatility Index should remain volatile but not so much that it dictates direction of the market. The equity index ETF’s look to continue their moves higher next week.

(As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

Here are the first 5 ideas for the week, to get you started:

Alpha Natural Resources, Ticker: ANR

Alpha Natural Resources has been in a pullback lately. The Relative Strength Index (RSI) is falling again after testing the mid line from below and failing. The Moving Average Convergence Divergence (MACD) indicator went sharply negative lately and remains near that peak. After losing support of the 50 day Simple Moving Average (SMA) it now looks to head lower to the 100 day SMA first and then support lower at 47.50 from October before testing the 200 day SMA at 44.73. It also appears that the price is roughly retracing the pattern shown from July 2009 through to June 2010, where it roughly doubled and then retraced over 80% of that move. So far the doubling has occurred and now the retracement is happening. If this holds the ultimate bottom could be at 38. The short interest is only 4% on this name so a stop could be placed at Firday’s high of 54.45. Also, be aware that ANR is involved with a combination with Massey Energy (Ticker: MEE).

Atlas Pipeline Partners, Ticker: APL

Atlas Pipeline has been in a consolidation channel since mid November after gapping higher. It is now piercing the top of the channel with positive support of the Bollinger band expansion, an increasing MACD that has just crossed, and a rising RSI. A hold above the 25.30 break out suggests a measured move to 28.60 based on both symmetry with the gap up move and an equivalent move to the width of the channel.

Diana Shipping, Ticker: DSX

Diana Shipping has been in a long descending triangle for more than a year. Since December it has been in a downtrend as noted by the dotted trend line. It is now testing that trend line on lighter volume and printed back to back potential reversal candles. The RSI is tapping on the 50 mid line area which has been resistance since the downtrend began, but the MACD has just crossed up. This could be played short looking for a retracement back to support at 11.50. If that happens it wold continue the series of lower highs and lower lows and expect a retest of the 11.16 support. A stop could be placed at 12.25 and a break of that could trigger a long play looking for a target of 12.51-12.61 initially. The short interest ratio is pretty low at 1.3% so do not expect a squeeze to run it much higher.

SunPower, Ticker: SPWRA

SunPower is testing the 15.20 resistance level for the 5th time and second in a month. If it can get through then the next resistance comes at 17 followed by 18. If it fails there is support at 14.70 and then 14 lower. The MACD suggests that a move higher could occur but the RSI has just turned lower. Also supporting a move higher is the expansion of the Bollinger band as it approaches resistance. Wait for the break to confirm.

Uranium Resources, Ticker: URRE

Uranium Resources is breaking a consolidation area higher after bouncing off of the 38.2% retracement of the broad move higher. Friday it went through the 50 day SMA on good volume. The MACD has crossed higher and is improving and the rising RSI retested the mid line and now looks higher. The next resistance is at 3.60 from the end of December and then a retest of the highs at 3.98. A stop could be placed at 3.25.

Up next The Rest.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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