Top 10 trade Ideas for the Week of January 3, 2011

After looking at over 700 charts, I have found some good setups for the week. This week’s list contains 8 long ideas, and 1 short setup and two that could go either way. The process was less transparent and the notes are abbreviated due to Holiday time with my family, but I think you will still find them interesting. These were selected and should be viewed in the context of the broad market. Over the last two weeks I put forth my longer term views for all macro sectors (Looking Ahead) which are very bullish for equities. The weekly and daily charts fit with these views, although the US Dollar Index looks to be giving ground, at least in the short term. A quick review f the weekly sector charts within the equity markets shows the best sectors look to be Materials, Energy and Financials and the weakest Health Care, with the rest stalled for the time being.

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

Here are the top ten for the week in alphabetical order:

1. AOL, Ticker: AOL

Printed a bullish Hammer on the 200 day Simple Moving Average (SMA) which has been support since mid September. If it continues to hold look for some resistance at 24.34 to 24.50 before reaching 25.20.

2. Capital One Financial, Ticker:COF

In a bull flag with support at 42. A break out higher over 43 sees resistance at 45 on the way to a target of 46.50.

3. CSX, Ticker: CSX

Has been in a long consolidation string of small price moves and is now rolling higher. The Moving Average Convergence Divergence (MACD) indicator has just crossed higher suggesting a move up. Look for a target of 68.50.

4. Edwards Lifesciences, Ticker: EW

In a bull flag after pulling back from highs. Has worked off overbought Relative Strength Indicator (RSI). If it continues to hold 80 then the target higher on a measured move would be 100. Support lower if the flag fails is at 70.42 to 70.50. Take which ever it gives.

5. Harmonic, Ticker: HLIT

In a bull flag with support at 8.50. If that holds and it moves higher the target is 10.75. If the flag fails then 7.60 is support.

6. KeyCorp, Ticker: KEY

In a bull flag after breaking higher out of a channel. If it gets over 8.9 then the target would be 9.90 but with resistance at 9.25 along the way.

7. MedQuist, Ticker: MEDQ

All bad news. Lost the long consolidation string lower. RSI Lost support of 50. Under the 50 day SMA. MACD accelerating down. Look for 8.25 and if that fails a target of 7.25

8. Regal Entertainment, Ticker: RGC

Both the price and MACD are starting to curl higher. If it gets over 12 then the first target is 12.72 to 12.78 and then 13.50.

9. Reliance Steel & Aluminum, Ticker: RS

In a bull flag. If it gets over 52 the the target is 55 on the way to 58.

10. MEMC Electronic Materials, Ticker: WFR

Price and MACD are both curling higher. Look for a first target of 11.71 on the way to 12.18.

Bonus Idea: United States Steel, Ticker: X

In a bull flag with support at 58. If it can get above 59.25 then the target on a measured move is 70.

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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