Top Trade Ideas for the Week of April 4, 2011: The First 5
- Posted by Greg Harmon
- on April 3rd, 2011
After reviewing over 700 charts, I have found some good setups for the week. This week’s list contains the first five 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 to bring higher prices for Gold and Crude Oil. The US Dollar index looks to continue lower as US Treasuries join that move. The Shanghai Composite looks to continue to consolidate but with an upward bias, while the Emerging Market ETF continues the move higher. The Volatility Index should continue in a tame and relatively low range allowing the SPY, IWM and QQQ to continue higher. Of the three the IWM looks the strongest followed by the SPY and then the QQQ.
Here are the first 5 ideas for the week, to get you started:
Anadarko Petroleum is creeping up against a 123.6% Fibonacci extension of the down move from April 2010 to July 2010 at 84.23. It is currently in a bull flag near that level. The Relative Strength Index (RSI) is moving higher supporting more upside but the Moving Average Convergence Divergence (MACD) indicator is stalling and may be rolling lower along with the 50 day Simple Moving Average (SMA). If it can break the flag higher then there is a target on a Measured Move (MM) of 92.75. There should be supp at 82 so a stop just under there, or a short entry for a quick ride to to the 50 day SMA, would be appropriate.
Peabody Energy is testing a top at 73.75 for the second time in two weeks. As it approaches this time it is from a higher low, and the RSI is solidly in bullish territory, however the MACD is rolling lower. With all the SMA’s sloping strongly higher the trend is up though. If this can break 73.75 then it has a MM target of 83. A stop can be placed just below the break out level.
Continental Resources has printed a short series of doji candles the last few days. This signifies indecision. The RSI is solidly in bullish territory and the MACD is flat but positive with rising SMA’s so the bias is to continue to the upside. If it can get above 73 then it has a MM to 83. If the indecision resolves lower, a hold at 70 might also be a good long entry point.
McMoRan Exploration has been in a 15 month ascending triangle with a resistance rail at the top at 19. it is now heading for that rail for the second time in 2 weeks with a RSI that is rising and a MACD that is in creasing, and off of a higher low. If it can get through 19 then it has a MM target of 22 from comparison to the mid March move higher and then a target of 28 from the break of the ascending triangle. A stop can be placed just under the top rail at 19.
The United States Natural Gas Fund, UNG, has tested and failed at the down trend line 6 times since October 2009. Having recently failed and with a MACD that is decreasing and a RSI that is falling with a steep slope, expect the trend to be down. If it can get below falling 50 day SMA at 11.07 then it is a good short to 10.40 and possibly 10.20 below that. Use the a stop just above the 50 day SMA.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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