Top Trade Ideas: The First Five

• Posted by Greg Harmon
• on January 17th, 2011

After looking at over 700 charts, I have found some good setups for the week. This week’s list contains the first five of which are below, to get you started early. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which looks to bring lower prices still for Gold but the bleeding could end soon with support nearby, and higher prices for Crude Oil. Treasuries look to resume their walk lower and the US Dollar Index looks to find support shortly and then move back higher. The Shanghai Composite looks to head lower but the other Emerging market are poised to move up. The low Volatility Index does not look to rise materially any time soon facilitating a further rise in the equity index ETF’s.

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

Here are the first 5 ideas for the week:

Caterpillar, Ticker: CAT

This stock is ripe for a breakout. It has been in a strong uptrend as shown by the rising near parallel Simple Moving Averages (SMA’s). The Relative Strength Index (RSI) has retreated to a level where there is plenty of upside and the Moving Average Convergence Divergence (MACD) indicator is starting to turn for the better. Nut most interesting is the Bollinger bands are now about as tight as can be. A breakout over 95 can run to 110 on a measured move based on the symmetry of previous moves. Support lower can be fond at 93 and then 90.

Cliifs Natural Resources, Ticker: CLF

Cliffs consolidated the last half of the week last week near 89. The RSI is high but not a real concern and the MACD is rising. If it can break through 89 then a measured move would suggest a target of 98. A stop could be placed at 87.

EZCORP, Ticker: EZPW

EZCORP broke out of a consolidation zone on Friday. The MACD is curling higher and just made a bullish cross. The RSI is rising as well. The target on a measured move would be 33. Watch the open for initial direction. It moved out of the Bollinger bands Friday so it might retrace first giving a better entry price near support at 28.80- 29.03.

Huntington Bancshares, Ticker: HBAN

Huntington Bancshares has been consolidating for two weeks near the April high of 7.36. If it can break through it then the target would be 8.25 on a measured move higher. A stop could be placed near 7.10. Watch the MACD for a turn and cross higher as the entry signal.

Magnum Hunter Resources, Ticker: MHR

Magnum Hunter looks to have broken out of a bull flag Friday but only just short of the previous high of 8.05. If it can get through that level it has potential to 9.75 on a measured move. The RSI is rising and the MACD crossed higher suggesting the time is right. A stop could be placed at 7.50.

Up next, The Rest.

Trade’m well.

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