Top Trade Ideas for the Week of August 21, 2011: The Best

After reviewing over 800 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 Saturday which saw the entire rubber band of the market is getting a little stretched but expect it to continue next week. Gold looks to continue higher as Crude Oil continues to sell off. The US Dollar Index appears comfortable continuing sideways while US Treasuries move higher. The Shanghai Composite and Emerging Markets look ready for more downside. Volatility looks biased higher leading to the expectation that Equity Index ETF’s SPY, IWM and QQQ continue lower. Remember that a stretched rubber band can result in two outcomes: a snap back, or the rubber band breaks and the real carnage results. Stay nimble. 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.

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

Here are the first 5 ideas for the week, to get you started:

Endeavour Silver, Ticker: $EXK

Endeavour Silver is holding in a bull flag with resistance at 11.00. The Relative Strength Index (RSI) is turning lower and the Moving Average Convergence Divergence (MACD) indicator is fading. If it can break the flag higher over 11 it has resistance at 12, followed by 12.50, but if loses 10.15 then there is support lower at 9.50 followed by 9.15. Wait for the break either way.

First Cash Financial Services, Ticker: $FCFS

First Cash Financial Services has fallen to the uptrend support line, and printed a long legged doji Friday, signalling indecision and often a reversal. If it loses support at 41.50 then there is support lower at 40 followed by 38. The RSI and MACD suggest this is the easiest path. However if it holds and starts higher then there is resistance at 44, followed by 45 and then 48. Short interest is over 5% and may help the upside.

Mentor Graphics, Ticker: $MENT

Mentor Graphics is heading to 10.56 with resistance higher at 11.02. The RSI is rising strongly and the MACD has just crossed up. Using 9.70 as a stop ride this train higher, easy peasy lemon squeezy.

Nevsun Resources, Ticker: $NSU

Nevsun Resources has held the channel between 5.12 and 6.54 during this volatile downturn. The RSI has just turned higher off of the mid line and the MACD is positive, but may be fading. If it can get over 6.54 it has resistance at 7.60 followed by a target of 7.96 on a measured move on the break of the channel. If however it loses support at 6.05 it can be played short with support at 5.60 followed by 5.30 and then 5.12.

STAAR Surgical, Ticker: $STAA

STAAR Surgical made a new multi-year high Friday, with levels not seen since January 2007. Sitting in a bull flag, a break above 7 has a target of 8.00 on a measured move higher. The RSI and MACD support more upside. A tight stop can be placed at 6.50 or a bit looser at 6.20.

Up Next: The Rest

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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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