Sunday, September 16, 2012


After Feds announced the new round of quantitative easing market moved even higher than last week, establishing a new higher high.

I expect market to move further up on long term but it may cool off a little bit on short term since I see market 23 points above EMA 25 on two hours chart, a sign that market is overbought on short term.

As expected dollar was smashed after QE3 announcement and precious metals rallied. With weekly DMI turned positive for both silver and gold I see these metals moving further up for a while. Silver may not reach its top around 50 before a correction but gold may go back to 1,900 without hesitation.

Metals and mining rallied as well this week (CLF, X, WLT) but as I said last week they look technically very weak. One stock that looks good technically is CENX, with price above downtrend line and weekly DMI just turned positive.

Some of the stocks I mentioned last week (HL, CYTX) rallied and those I said looked vulnerable didn't perform so well, especially ORCL, but MCD didn't break bellow the support level yet despite the presence of the "death cross". Please note that these stocks are looking good or bad on weekly charts meaning that it may take weeks until a predicted pattern may form.

One stock I forgot to mention last week, a stock that stays on my "watch list since September 6 is HOV.

XNPT also looks pretty good at the moment, especially if manages to pass some resistance around 11. after that there is a huge gap towards 15 and gaps tend to be filled very fast.

All the stocks i mentioned above as good "buys" have the advantage that they offer a good entry at a low price (all they were hammered in the recent past) but they have the disadvantage that you may get burned, what it seems now as a change in trend may look soon like a trap. If you really want some stocks that are going to be bullish no matter how the general market is doing consider BIIB and LEN. Of course the disadvantage is that you need to enter at a high price but they are safer than the stocks I mentioned above. Once again I am going to mention that I am rarely trading individual stocks, I prefer index ETFs but I avoid 3xETFs for reasons I am going to tell you in another post soon.

All the best!


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