Top Trade Ideas for the Week of June 20, 2011: The Rest

• Posted by Greg Harmon
• on June 19th, 2011

Here are the Rest of the Top 10:

American Express, Ticker: $AXP

American Express found support near 48 after pulling back and is now testing the 50 day Simple Moving Average (SMA) at 48.79. If it can get through that and over 49.00 it has resistance at 50.50 followed by 52. The Relative Strength Index (RSI) is moving higher and the Moving Average Convergence Divergence (MACD) indicator is improving, supporting upside.

NCR Corp, Ticker: $NCR

NCR fell out of an ascending triangle and moved lower. After basing at 18.00-18.25 it now is primed to head lower still. It printed a Bearish Engulfing candle Friday just above previous support at 17.61. If it can get through then below the gap fill at 17.23 followed by 16.37 and 15.50 are support. A stop can be placed at 18. Short interest is not a factor.

GT Solar International, Ticker: $SOLR

GT Solar is testing resistance at the top of an ascending triangle at 13.55 after a move higher. If it can get through that resistance then the target on a Measured Move (MM) is 16. Short interest is high at about 10% so it could also benefit from a short squeeze.

Pharmasset, Ticker: $VRUS

Pharmasset has fallen back to the channel it broke higher out of and is testing support at 108.40. If it continues to hold 108.4 then can attempt to move higher to resistance at 120. It if fails to hold then there is support at 103 and then the channel bottom at 95. The RSI is at the mid line but looks to be turning and the MACD is at about to cross negative. These indicators are diverging giving little guidance of the next move. There is decent short interest at over 7% in this name which is over 5 days volume to cover so if it gets moving to the upside it could benefit from a short squeeze. This is likely the source of the price and volume spike that occurred two weeks ago.

ZAGG, Ticker: $ZAGG

ZAGG has been moving higher along the ascending trend line resistance. The past week it built a classic bull flag with a top at 12.70 on declining volume and with the RSI high but not extended and the MACD is positive but waning. If it can get through that top then it has a target on a MM to 14.75. There is resistance near 13 from the trendline along the way. This has monster short squeeze potential with short interest well over 25%.

The Best

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(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 ($GLD) to drift higher while Crude Oil ($USO) heads lower. The US Dollar Index ($USDX) is primed to continue its upside move while Treasuries ($TLT) consolidate with an upside bias. Both the Shanghai Composite ($SSEC) and Emerging Markets ($EEM) should see continued weakness. The Volatility Index ($VIX) will be important next week and is poised to move higher. US Equity Index ETF’s, are mixed but generally biased to the downside. The $QQQ is the worst looking with the $SPY mixed but biased lower and the $IWM looking as it may consolidate. Watch for a move in the Volatility Index over 24 to trigger coordination among the Index ETF’s and a move lower. Consolidation in the weaker Indexes should bring the Volatility Index back under 20 and could lead to a trend change. 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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