Top Trade Ideas for the Week of April 11, 2011: The Rest

Here are The Rest of the Top 10 for the week:

Limelight Networks, Ticker:$LLNW

Limelight Networks fell from a double top at 8.35 in February and established a base above 6.10. The last two weeks it has risen from that base back to the previous resistance level between 7.25 and 7.40. f it can get over 7.50 then it has room to advance to 8.35 again. The rising Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicator support a move higher. Use the area just below 7.25 for a stop.

MBIA, Ticker:$MBI

MBIA is testing support at 9.50 in a descending triangle. This is the fourth test of 9.50 in 5 months. As it approaches the RSI continues to slope lower and the MACD indicator is turning negative. If it breaks 9.50 there is support lower at 8.60 from August 2010 and then 8.30 from September 2009 with the next level down at about 7.20. The tight Bollinger bands suggest a move to happen very soon. This has been a heavily shorted stock though with over 10% of the float in short interest. One way to play this short with less risk of being squeezed is to buy the May 10 Strike Put options, which closed at 1.02 on Friday, when the stock price breaks below 9.50. Use the 9.60 area in the stock price as a stop to sell the puts, and when the first target is reached consider rolling to a lower strike to take out some premium or selling the 8 strike puts against the 10’s if you can sell them for at least the price paid for the 10’s to be in the spread at break even.

Quepasa.com, Ticker:$QPSA

Quepasa.com has been basing between 5.50 and 6.00 for over a month after a long fall. During this basing the RSI has rounded and is starting to rise and the MACD has turned positive. If it can get over 6.15 then it has resistance higher at 7.00 followed by 7.50 and 7.91 during the move higher. Use the 5.90 area as a stop.

Timken, Ticker:$TKR

Timken is falling from the top of an expanding wedge or megaphone. This can be played short to continue towards the bottom of the wedge currently at 43.75. There has been some support previously at 49.00 which is also right between the SMA’s, and at 46.75-47.00 and 44.32 along the way. A stop can be placed at 52.00. Short interest is negligible for this name.

US Steel, Ticker:$X

US Steel is approaching support at 52 for the third time this year, this time from a lower high and with a weak RSI. If it can break below 52 then there is support at 48.50 followed by 46 and 41.70 below that. It has a high short interest at over 15% of the float, so to limit risk getting short exposure via the May 50 Strike puts which closed at 1.77 Friday may be the best option. Buy them when X breaks 52 with a stop out on X moving back above 52. As it hits either the first or second target you can roll them to a lower strike or sell the May 45 puts against it to create a put spread.

The First 5

Up Next: Bonus Idea

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

After reviewing over 700 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which looks for continued moves higher in Gold and Crude Oil as well as continuations lower for both the US Dollar Index and US Treasuries. The Shanghai Composite should continue its run higher but the Emerging Markets may need to consolidate before further upside. The Volatility Index should remain tame. The Equity Index ETF’s all show signs of a potential pullback or consolidation with the QQQ looking the strongest and the IWM the weakest. Use this information to understand the major trend and how it may be influenced as you prepare for the coming week ahead. Trade’m well.

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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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