Top 10 Trade Ideas for the Week December 13, 2010

After looking at over 500 charts and posting my thoughts on many of them, I have found some good setups for the week. This week’s list contains nothing but long ideas. These were selected and should be viewed in the context of the broad market daily and weekly trend, reviewed Friday, which looks looks for equity markets to continue higher and longer term they look very bullish. The shrinking Volatility Index will only help this trend. US Treasury Bonds should peak soon and the reverse to resume their trend lower. Crude Oil and Gold are preparing to move higher and the US Dollar Index may join them, if only for a brief time. The Shanghai Composite will look to break its flag, probably lower and the Emerging markets ETF will bounce around as it consolidates in a longer term trend that looks higher. From the Sector Review the best sectors continue to be the Energy and Consumer Discretionary sectors and the worst Utilities.

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

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

1. Advanced Analogic Technologies, Ticker: AATI

Advanced Analogic broke out of a descending triangle in October. In November it retested the downtrend line of the triangle and held. It is now moving higher and testing the high achieved on the break out. With a rising Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicator it is poised to move higher. There is resistance at 4 and if can get above it further resistance comes in 20 cent steps up to 4.60 and then at 5. A good place for a stop would be support at 3.9.

2. Dorman Products, Ticker: DORM

Dorman broke to new highs from a higher base in November. It is currently in a Bull flag, with support at 44 then 42.2 below that. A continuation of the flag higher above 48 would look for a target of 60 on a Measured Move (MM).

3. GameStop, Ticker: GME

GameStop is breaking out higher from a 20 month descending triangle. If it can hold support of the downtrend line at 22 then there is resistance higher at 25.85 followed by 28.50 and 33 on the way to a target of 38 on a MM. The strong RSI and improving MACD will assist.

4. GMX Resources, Ticker: GMXR

GMX Resources has been knocking on resistance at 5.50 several times over the last month, this time from a higher base. The rising RSI and MACD support it moving higher now. If it can get through 5.50 then there is resistance at 6.36 from the 200 day Simple Moving Average (SMA) followed by 6.50, a level of previous support and resistance.

5. Huntington Bancshares, Ticker: HBAN

Huntington has participated in the recent rally in financial stocks to the extent that it has broken through a historical support/resistance level at 6.75, and out of a long base in the channel between 4.96 and 6.75. The rising RSI and MACD suggest it has more room to the upside. The next level of resistance is at 7.24 and a target on a MM of 8.50 above that.

6. Magic Software Enterprises, Ticker: MGIC

Magic Software is in a bull flag after breaking out of a long basing period at the 2.50 level and a pause at 4.25. A move out of the flag above 7.00 would suggest a target has a target of 10.25 initially. Having just worked off some pressure on the RSI it could be ready to go.

7. Newcastle Investment, Ticker: NCT

Newcastle is also in a bull flag after moving up from the last bull flag base at 4.75 to 5.00. If it can get over 6.25 the expected move would be to 7.25. The RSI is turning higher and the MACD is beginning to improve, both adding weight to a move higher.

8. NPS Pharmaceuticals, Ticker: NPSP

NPS is breaking a resistance level at 7.00 and heading higher. If it continues t hold above 7.00, as is suggested by the rising RSI and MACD, then there is resistance at 7.46. Through that level and it can really start to move higher. Nice reward vs risk ratio with a stop near 7.00.

9. Rubicon Minerals, Ticker: RBY

Rubicon was a short play last week and looks to have found its supp with a Hammer at the tail of a bull flag on Friday. Using 5.25 support as a stop, if it can get back to the top of the flag and above 6 then the target for a move higher is 8.75 to 9.00.

10. Valeant Pharmaceuticals, Ticker: VRX

Valeant is testing the top of a broadening wedge and in a bull flag. A break of the flag higher will see resistance at the top of the wedge at 28.55. I it can get through that, the target for a move higher is at 31. One could use the top rail break level as a stop or 27.50 now.

Bonus Idea: Superior Energy Services, Ticker: SPN

Superior Energy is in a bull flag after a move higher out of a base near 27. If it can break the flag higher above 35 then 43 is the target on a symmetrical MM. Support at 34 can be used as a stop.

Trade’m well!

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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.

blog comments powered by Disqus
Dragonfly Caps Blog