Top Trade Ideas for the Week of August 7, 2011: The Rest

• Posted by Greg Harmon
• on August 7th, 2011

Here are the Rest of the Top 10:

Biogen Idec, Ticker: $BIIB

Biogen Idec has fallen with the market last week but printed a long legged doji Friday on the 100 day Simple Moving Average (SMA). This signals indecision between buyers and sellers. As it contemplates the next move the Relative Strength Index (RSI) is bouncing off of the 30 technically oversold level and the Moving Average Convergence Divergence (MACD) indicator is growing more negative. If it resolves lower, under 93, then there is supp at 90.65 followed by 86.57 and then 83. If it resolves higher, over 95, then there is resistance at 98.50, followed by 102 and 107. Be nimble and play whichever side she gives you.

Hi Tech Pharmacal, Ticker: $HITK

Hi Tech Pharmacal has been heading lower since early July and looks to continue heading lower. The RSI is sloping down and has lots of room before it is over sold, and the MACD is beginning to grow more negative again. If it gets under 26, then there is support at 25 followed by 24 and then 23. this has high short interest at about 10% so playing it with options can limit your downside and remove the risk of a short squeeze. The September 25 Strike Put traded last for 1.10 on Friday and could be spread against the September 22.5 Strike to save about 40 cents.

KeyCorp, Ticker: $KEY

KeyCorp has fallen to support at 7.20 as the RSI pierces the 30 technically oversold level and the MACD continues to grow more negative. At this support level it is also outside of the Bollinger bands. If it holds 7.20, then it has resistance higher at 7.42, followed by a progression through 7.73, 7.92, 8.25 and finally the resistance at the top of the channel at 8.55. If it fails to hold 7.20 then there is support lower at 7 followed by 6.60. Short interest is not an issue with this name.

Newcastle Investment Corp, Ticker: $NCT

Newcastle Investment is heading lower with support next at 4.1 under 4.75. The RSI is sloping down and the MACD is growing more negative. If the support at 4.75 holds and it bounces then there is resistance at 5 followed by 5.16 and then 5.50. Short interest at 5% is not enough to avoid the short side but could add some weight to an up move.

Timken, Ticker: $TKR

Timken started falling from a Diamond Top two weeks ago. It has a Measured Move (MM) lower to 31.80 with support at 35.50 along the way. The RSI is oversold territory though at 16.52 so it could bounce or consolidate to work off the oversold condition. If it bounces and gets back over 40, then there is resistance at 44 followed by 46.

Up Next: Bonus Idea

The Best

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

After reviewing over 800 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 Saturday which looks for Gold ready to consolidate, if only for a couple days within the uptrend while Oil may consolidate before continuing the fall. The US Dollar Index looks to drift higher in the 73 to 76 range while US Treasuries pullback. The Shanghai Composite appears headed lower toward support and Emerging Markets may consolidate or bounce a bit before doing the same. The spike in Volatility looks to have more room to the upside but shows signs of pulling back at least early in the week. The Equity Index ETF’s SPY, IWM and QQQ appear set to bounce early next week, but the SPY and IWM charts look broken on many timeframes and headed lower. The QQQ is a bit of an enigma as it has maintained a hold at support. The QQQ’s continuing to hold and move higher would be a signal that the broad downturn may be ending. On the other hand if the SPY and IWM continue lower as expected in the intermediate term the QQQ will likely join them lower. 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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