Updating/weeding out the list

Today the market had very respectable and possibly encouraging gains. But judging from the volume on the major index ETFs, trading was not heavy enough to look at the day's action as a convincing change of sentiment in the market. This images shows a daily chart of the three majors since November with a 30 day Moving average. All of them have areas of likely resistance to overcome before any serious bullish posture could be entertained again. In addition to resistance levels from price action, the descending 30 MAs might just might provide another influential nudge to the down side.
It should be noted that they all are in a double bottom reversal pattern, but there are a few things to consider. 1) The pattern is meaningless until the resistance from the high between the two bottoms is broken. 2) A bullish reversal should come at the bottom of a bearish trend. The recent bearishness is really just the first breakdown of a very bullish trend and not yet a trend with lower highs and lower lows(I'm looking at SPY on a daily closing basis). So, looking for an upward "reversal" seems a bit premature.
(Click for a larger view.)


While the market is sorting itself out, this is an ideal time to rebalance our lists. Everyone should be working on a bearish watchlist. Despite the current state of things, I think we should always focus on the primary watchlist for the group as a bullish watchlist. After all, that direction is the ultra long term bias and nature of the market. Besides, many people may not be interested in or comfortable with shorting the market or trading bearish. When the market does resume its strength, we want to be ready with a list of well chosen stocks that are likely to be among the first and strong participants of a new rally. But first we've got to get rid of the current stocks that are less attractive at this point.
I mentioned a few thoughts about trimming down our list a few posts ago. Here's a complete run down on what I think should go and what should stay.
First: here's a look at the list and how it scores in the Investools Phase 1 and Phase 2 analyzer.


The simplest way to start is by getting rid of KBH, UNT and ZMH because they have a combined F/E score of less than 3.25. I'm a bit sad to see ZMH go, particularly as it continues to work on a new 52 week high. But the growth estimates is less than our ideal 20% and it is estimated to grow at a pace slower than its group this year and also in the next 5 years.

Also, because the Estimates score is forward looking, we'd prefer for that score to be the stronger of the two, if possible. For that reason, I'd also like to see CRDN, WCC, and BHI leave our list.
CRDN - Growth estimates are a low 7.5%. Also estimated to under perform its group this year and next. Set an alert on this one for when it breaks 62.50 and forget it.
WCC - Growth estimate is less than 20% and it is estimated to under perform its group this year and next. It's been in a range between 55 and 70 for about 9 months. Set an alert to notify you if it goes above 70 and forget it.
BHI - It is actually very attractive from a valuation standpoint. PEG is .45 with a P/E well under its group. But the most recent earnings miss and the current and next year's estimates for earnings growth well below the group look like red flags. The chart is a mess with the gap down on the recent earnings announcement. It has also not participated in the latest rally attempt in the Oil Services.

The others:
ICE - Has had an incredible run and the trend has broken. PEG of 2.19 looks a bit overpriced. I'll be looking for potential bearish entries on this on a bounce down from 135 or a break of 125.

NTAP - It had a strong reaction to the recent earnings announcement in February but couldn't follow through and with the market selloff on the 27th, it gave back all the gains from the earnings jump. 36 remains important support, recently confirmed by a nice hammer formation. But once that breaks, things don't look good. Again, this has a high PEG of 2.24. Institutions own 87% of the shares outstanding on this stock. Once they start selling, look out below.


HWAY - This stock has just been boring! The fundamentals are still quite good, but I'd like to get rid of it if or no other reason than that it trades well below an average 1 million shares a day. As a result, there's not a lot of open interest throughout the options chain.

VSEA still looks to be a reasonable valuation with strong fundamentals. So I don't see great fundamental reasons to take it off the list. But I'm nervous about the chart. It has seen great gains in the last 8 months. More impressive is the strength of its chart compared to the SOX index in the last 4 months and it is now working breaking recent resistance to an all time high. But the chart looks like it could be ready to roll over. It broke a long term trendline in January and rallied back up to find resistance on the underside of that line. It now looks to be in an ascending wedge, which tends to resolve to the down side. With a big bearish engulfing candle strengthening resistance at 50, a reversal could be at play here.


CWTR - Though the fundamental scores are still pretty good and the valuation is actually quite attractive, I think this industry comparison chart says it all. GONG!

RIMM is pretty expensive, but it has held up impressively in the recent market selling. We should wait to see what happens at the earnings announcement on April 4. Or maybe we should not include stocks over $100. Thoughts?

In Summary, here is my recommendation for the list:
KBH Cut
UNT Cut
ZMH Cut
CRDN Cut
WCC Cut
BHI Cut
ICE Cut
NTAP Cut
HWAY Cut
CWTR Cut

Keepers(for now)
VSEA Give it the benefit of the doubt until it breaks down
RIMM Hold 'til earnings, at least
COH This actually has 3 green arrows right now
AAPL Apple rolls out a bright iFuture
CTSH Just ranked 15th in the Businessweek 50 best performing companies. Setting up for a new batch of green arrows.

So how does that strike you? Please let me know if this assessment of things is agreeable or if you see certain stocks differently than I and would like to take different action. Once we agree on the stocks to get rid of, we can begin to find replacements. We still have over a week until our next meeting, but perhaps we can get some ideas flowing between now and then. If you respond with ideas, I'll try to respond and include charts. If you want to mock up a chart with what you're seeing, I'd be happy to post that too on that blog.

Market Posture and a few ideas

Greetings! Sorry for the long period of inactivity on the blog. I've been very sidetracked with my career pursuits. I'm thinking that may be more of a norm in the coming months, but I'll try to keep this alive if I can.

It was great to be back at the meeting tonight and see a great group of core regulars there. Good energy!

Though it may be obvious to most, I'll post our reading of the market posture having gone through the Market Posture grid.



The SPX itself gave quite an intra-day scare but didn't close with a lower low just yet, so there is not yet an official down trend begun. The rally in yesterday's action was pretty impressive, still that's just the action durin one day. The past two weeks have been decidedly bearish and abrupt. That this should just smooth over and resume a nice steady uptrend seems unlikely. In any case, we're cautiously bearish because we don't have the lower low yet.
(Click the image for a large view.)



Ray made the good point that just because the VIX is high doesn't mean the market will go down further, nor is it necessarily "time to buy." Unless it continues to go higher, than we should read it as neutral and wait for a turn back down as a bullish indicator. If it continues higher, that will be with further bearish action in the market. But the real value in this indicator is when it turns from being low or high.
At this point, we have a higher low, but not yet a higher high after the break above the 12.50 area. I think Ray's probably right that the VIX will form a new range roughly where it has been in the last two weeks. That doesn't really give us much to work with other than the knowledge that the market is now a bit more volatile than before. So it might be fair to read this indicator as neutral to bearish.


We talked a bit about the group list but didn't get to really dig into it. I want to get rid of a majority of the list. In fact, many of them might be good bear watch-list candidates now.

KBH, UNT, and ZMH need to go if for no other reason because they don't have an F/E score of 3.25 or higher. And have you seen the chart on KBH? OUCH!
With a move up to and bounce down from resistance at 37.50, that might be a nice entry for a bearish play. I'd look for a shorter term quick profit, though, because this stock has been beaten up for a long time. I think it is severely undervalued at this point. PEG of .67. And look at its P/E compared to its group. But the chart is what it is until it isn't anymore. It had an intermediate uptrend going, but that was obliterated a few days ago on the break of 47.50.


CRDN should probably go because it's 5 year growth estimate is only 7.5%. Remember that we're looking for a minimum of 20%.

ICE is quite overvalued with a very high P/E and PEG. It looks like its great run is over and if it breaks support around 127, there looks to be nice room for profits in bearish plays even with multiple stops for support along the way.



NTAP is also perhaps overvalued with a high PEG above 2. Looks pretty toppy as well with what looks like a relatively orderly turning over. A break below support at 36 would negate the hammer candle yesterday and be a nice entry for a ride down to 33, 31 or 29(two former areas of recent horizontal support and one diagonal support line from the low in 2004.)


More thoughts on what should get booted from the list soon.

For the long side just in case the market does look strong from here. NTRI is a potentially nice entry here with a higher low after being beat down by silly analysts changing with the wind. On strong earnings the recent gap up and low volume pullback seems as if people are ready to start buying this stock again. Fundamentals are very strong and the valuation is quite low. Look at the P/E compared to its group. PEG is .77. Very low, which is good. If you don't know what PEG is, do a search on Investopedia for the short and quick answer. But here's a more in depth presentation PEG from thestreet.com that is pretty good. Notice the date on the article and Cramer's mention of how undervalued MA was given its PEG. And look what happened to the stock shortly thereafter: It was up 160% at its high last month!

It's been a wide ranging year for NTRI, but more or less sideways. We're now at the bottom of that range with a symmetrical triangle that seems likely to break to the top side given the volume on the recent earnings announcement and gap up. An entry on a break above the resistance line or 47.50 seems pretty reasonable with a target of 60 or so. It's a touchy call with the state of this market right now, but with a conservative position size the potential reward may just justify the risk.


That's all for now.

Feel free to chime in in the comments section here.

List Performers

Since this post followed so quickly after the last one, I just wanted to point out that Jim left an insightful comment in the comments area for the last post on Oil. Check it out. And don't be shy about leaving your own.

So far, the 40/45 March Bull-Put spread on COH I suggested a few posts ago is looking good. I'm not going to claim victory just yet, as there's plenty of time before expiration, but it's nice confirmation when things begin to work as predicted from the start of a trade. (I'm paper trading it, so I'll let you know how it comes out.)
COH has put in a new high now and while it may keep firing higher, it would be prudent to look for a cleaner entry. The MACD and Stochastic have yet to turn lower, but I would imagine one or both will in the coming week as the stock regroups for further upside. With 5 up days in a row, it is reasonable to think there might be a bit of a healthy pull back needed. Also, I like to keep old trend lines on charts for a while to see how the stock reacts to the backside. You can see that the stock is coming right to the underside of the recently broken 5 month trend support. Given the angle of the line, I don't see it as some scarey point of reversal. It just seems a healthy reminder that stocks aren't supposed to go Parabolic and this one could use a few days rest. If it pulls back toward the MA and puts in a higher low, that would be a great entry. I will look to 45 for new support.
(Click for a larger view)


CRDN is in a group seemingly trying to fight its way out of the red. Notice that the Group Rank in Phase 1 is showing 64. After not a lot of follow through on selling after an analyst downgrade, we see a potential double bottom reversal pattern which would give a nice buy signal in a move above 55. This would also be very close to a fresh third green arrow on the MA. With earnings on Feb 26, this could be a nice short term trade up to 60 or so.


Earnings coming out tomorrow on CTSH and the chart looks very healthy. Of course buying on a pull back would be ideal. There's very nice, clear support at 82.50. Use this to define your risk and position size.


I'm feeling good about replacing ISE with ICE. Friday marks a new high for ICE on above average volume while ISE had a down day to erase much of its rally attempt the prior day. We'll see what earnings this week bring for these stocks.


The homebuilders have been doing very well lately and our KBH has been moving right along with the pack with a new high for the last 8 months on Friday. It's not quite ideal to buy after a week of very strong action. But the strength serves as confirmation that people are continuously embracing these stocks again. A target of 60 seems inevitable in the coming months. The trick is to get the entry correct.



RIMM has been moving sideways lately with some very toppy signals to it. The recent earnings announcement was met with a heavy volume and huge bearish engulfing pattern. Then a rally attempt at new highs was harshly batted down from resistance on big volume again. A few noticable up days this week look like another attempt is being made, but the volume has been less than average on those days. I won't have a whole lot of hope for this stock until it can convincingly break through the 140 area. Until then I will be looking more closely for a potential bearish position here. Obviously a bounce down off the 140 area for a triple top pattern would be a nice entry.
Paper Trade: On December 22, the day after the earnings announcement, I used the bearish engulfing as a signal that sentiment on this stock was changing. With a lower high also in place, I sold a January 140/145 Bear Call spread for a credit of $1.47. It expired worthless for a return of 41% in 4 weeks. The first week of January was a bit worriesome, but I held because it had not broken the resistance yet.


WCC had a stellar earnings announcement accompanied by news of a $400 Million stock buy back program. The market obviously liked this with some heavy volume gains. Notice that the day before earnings were announced was already an optimistic move. At this point a pullback would be a better place for an entry. 62.50 would be a good support level or maybe the MA will come up to provide support somewhere else. A move above the 69-70 area will be the real signal that this stock is going places.



ZMH is pulling back for a nice entry. 80 would be the most obvious, perhaps strongest support to look for now. But an entry on a bounce of the 82.50 level, the low of the day it gapped up, would be nice and clean. Don't forget the big volume spike that accompanied the gap. This is a major sign of sentiment on this stock.



But don't forget to look at the long term chart on ZMH. The 90 area appears to be potential resistance. What I'm thinking is that it might be nice to buy stock or a deep ITM, Long term call option here around 80 or 82.50 and then sell 90 calls as it approaches that level if it struggles with resistance there.


Have a great week.

FED relief

The FOMC released their statement today at 2:15 PM and decided to keep the target fed funds rate at 5.25%. It seemed a foregone conclusion that they would not cut rates, but judging from the action in the markets starting at 2:15, I'm thinking what people needed to hear was that there wouldn't be a rate hike. Even if slower, the economy is still growing and the bulls seem to want to run further. Look at today's chart with 15 minute candles for the SPX, Nasdaq composite, Dow Jones Indusrials (Thinkorswim doesn't support the ticker for the dow, so the DJX is the same thing at 1/10 the size) and the Russell 2000 small cap index. The red line is drawn before the 2:15 candle.
(click image to see it bigger)


Look at the total volume New York Stock Exchange for the past 4 days broken down into 15 minute chunks. The cross hairs on each day show the level right before the 2:15 period began. Today's trading increased significantly as the market pushed rapidly higher in the last hour and forty five minutes of trading. Perhaps that seems like a silly and obvious observation to make, but it is a good piece of confirmation for the upside sentiment.
(I still can't figure out why this Total volume chart doesn't' show the same numbers we see for total volume on the NYSE home page or Yahoo. Nevertheless, it gives a good relative picture.)

Though the Nasdaq and especially the SOX still look somewhat questionable in their technical strength, the Dow is back working on a new high and the SPX has jumped back above the 1431 resistance line I've shown on recent posts. So it seems the breakout may get another chance.
But most of all, I like the look of the Russell 2000 moving above it's relatively orderly period of sideways consolidation. This would indicate that small caps would be good stocks to look for buys, or you could just play the IWM, Russell 2000 ETF. Remember that even if you're wrong about a bullish stance, it's best to get in near support so you know where to get out for a small loss. It did come in more than the other indexes off the high of the day, but strength tomorrow could be a great entry. I would look to 79 for new support and aim for a target of 81 judging from the height of the sideways channel.


Notice that the FOMC statement mentioned tentative signs of stabilization in the housing market. The housing stocks have been rising steadily since September and were up nicely today even before the statement and more so after. Our KBH is looking well on its way. 55 may yet be a point of resistance in the short term, but 60 seems like an inevitable destination.


I'm kicking myself over ISE, which I discussed briefly in the last post. If had stuck to my original plan to give it room up 'til 47.50, I'd be feeling very good right now. I guess this is one nof the major realities of options trading. The massive swings in option price can really bring out the emotions. This is why we have to examine what we as individuals are comfortable with. Mine was a good analysis and the exit was not such a horrible decision either based on what I was seeing. But the added pressure of time decay and the leverage of the option are more what weighed on my decision, emotionally, than my certainty that it was going to go upward, the wrong direction.
I don't know what happened today, as there's no major news, but the stock is down on big volume. The ideal bearish entry to make here would have been on the first lower high after second of equal highs. That also was a bouncing down off the MA and had 3 red arrows. Would have been much easier to sit through the turbulence during which I bailed out. Double GRRRRRR!
That this stock had such a down day with no obvious news when the market rallied strongly does not say good things for it at all.


Happy Hunting. If the market is going to start a another leg up, this is the place to be looking for entries. The VIX, by the way, feel lower again today for a definitive lower high.

F$#%&@& ININ, spread orders, Technical Analysis

Double Sigh. (See earlier ININ post "Whipsawed" for the first one)

With two confirmed candle patterns testing the new support, the bull flag was broken yesterday for a very good entry signal. Apparently the rest of the world saw that too. But I didn't trade it.
Another case for the lesson about watching a stock deliberately and taking the signals that are there, even if you got stopped out for a loss already. In fairness, I have been hesitant to take on aggressive positions in this holiday time when the volume in the market is so low, but there sure was nice volume here on this one. Granted, the stock has almost doubled in under 3 months. But with all that volume backing it up, who are we to say that it's tired?
(Click on the picture to make it grow.)


In hindsight, I realize that my mistake was setting a stop loss order too tight for a volatile stock like this. I assumed the old resistance would provide new support when I should have sized for a stop under the old support and kept a mental stop below the new expected support to allow for intraday noise like we saw on the big hammer day. 3% below support is different on a stock like this than on a steadier big cap stock. To see the other posts with the story of this ININ play, click on the ININ link at the bottom of this post.

After my post yesterday, I watched BHI for the Harami pattern to be confirmed with an up day. It was looking stronger earlier in the day, but even with some selling toward the end of day, it was still an up day. Because of my distrust for the market at the moment, I decided to play it a bit more conservative and do a bull put spread. This way, it doesn't have to make the big potential move I see. All it has to do is close above 75 at Jan expiration. Jan 70/75 bull put spread. I actually placed it in two accounts.

Let's talk limit orders and negotiating. With options and especially spread trades, we very rarely want to place an order at the natural bid or ask. There is usually room to negotiate.
The spread was 1.25 at the bid, 1.45 at the ask. I placed the orders for each account for a limit of $1.35 at 3:07 PM. They sat there. I decided to negotiate a bit. I moved one of them to a limit of 1.33. It sat. Seconds before 3:15 I moved the limit to 1.30 and it filled in exactly one second while the stock was at 75.57. I let the other order for 1.35 sit. At 3:29, 22 minutes after it was placed, the order filled for $1.35 when the stock was at 75.48.
To my knowledge, the bid/ask on the spread did not change in that whole time as the stock moved in a relatively tight range. Whether it was the difference of .09 in the stock price or just antsy market makers, I got the fill I wanted by waiting and still did better than the natural bid on the order that I did bring down my ask.
The moral of the story is that we must not forget that this is a market place and therefore a place for negotiating our price. Sometimes we have very little room to negotiate, but other times we have more. With the bid ask spread in options chains and the resulting spread in a combination of two options in one order, there is often room to negotiate, even on more heavily traded options chains. In a very heavily traded stock and options chain, the market will be tight, yet there will be a spread. Depending on the stock price the theoretical price of an option or spread position will always be right about at the mid of the bid/ask spread. We will rarely fill right at the mid since the market makers need something of an edge to want to play. But we can most often negotiate somewhere between the natural(bid in this case since we're selling a spread) and the mid. Notice on this options chain (after hours) that because the stock is very heavily traded, the options have quite high open interest. High liquidity makes a tight market. A tight market shows the bid and ask straddling the theoretical price. That's what we want to be aiming for.
Options markets are super efficient and any talk of market maker manipulating your position is nonsense, particularly if it is a liquid market.

Note that the shorter term in-the-money option has a slightly wider spread. It's hard to count on after hours prices as exactly accurate, but I'd read this as bullish. The ITM option has more intrinsic value and less time value to burn. Therefore, the seller of this Jan 70 option is taking on quite a bit of risk, more so than the ATM and OTM options with all time value, and widens the spread (the their cut of the action) to compensate for upside risk.

Now look at the chain for the Vertical spreads. The bid/ask spread is wider than for a single option on almost every spread. Yet the theoretical price is just about exactly in the middle. Because there are two individual sides to the trade the market can fill them individually or together. Whatever the case, we don't care, as long as we get the combination filled for our price somewhere near the theoretical.

Notice the odd fill I got for each individual side of the bull put spread. Someone out there in the market is willing to negotiate in odd prices. It's also possible that each side was filled in different places. Regardless, I got my fill for 1.30, better than the natural of 1.25.


I hope that was helpful. However, I want to make sure to distinguish between this kind of negotiating that with a normal stock purchase. Most stocks trade with a far smaller spread and this will not be nearly as much a consideration as it is with options. If you want to get filled on a stock order and don't want to wait around hoping for a dip and miss the boat(which I've done too many times...and then chased it like an idiot - don't chase it like an idiot), buy with a limit order on the ask price.

In other news, KBH looks read for a break of this flag and some upward movement. Ideal entry on the break of this line. Good reports from homes sales today and yesterday could mean a touch of enthusiasm for home builders.



Finally, if this chart of ISE doesn't convince you that technical analysis can be very useful in observing what's going on and being in sync with the market, I don't know what will. Do you think other people are drawing lines on this same chart too?

Some strength in the list

I won't go through them all, but we do have some strong ones in our midst.

The $SOX index has been struggling a bit lately. It broke both diagonal and short term horizontal support and has been drifting since. It's still above the 200 MA, though, and hanging onto the 50. So I'm not counting it out yet, but it's looking kinda ugly.


In contrast, however, our own VSEA has been very impressive. We're all so proud! Breakout on big volume. The news isn't obvious to me as to why, but the volume doesn't lie. It's a bit extended right now for an entry, but it's definitely one to watch for an entry point, particularly if the SOX and the Nasdaq get their act together. I wrote about the Semis in this post. Don't forget about the increased money for buy backs.



CRDN broke above a bull flag pattern I mentioned in Scrolling Through the List. I think it is probably debatable where to draw the flag pole, but the theory is that once the Flag (The area of consolidation between two lines) is broken to the upside, the stock should continue the distance equal to the height of the pole. Since late November showed consolidation after a big move up off the 41 area, it was a bit of a flag pattern too. I'll place the pole of the most recent flag from the low of Nov. 30 at 51.78. The high of Dec. 5 is 57.15. In round figures, the height of the pole is $5. Taken from the place where the flag was broken, about 55.80, the target would be 60.80. I almost took this trade on Tuesday, but chickened out because I don't trust the low volume in the market during this holiday season and the volume on this one was very low on the bullish candle. Regardless, resistance is at 62.50



Looking at it more closely, I think the move off 41 in November could be seen as a flag pattern with a pole that is about 13 pts. long. It was a big move on earnings and kicked off with major volume. From the breakout on 12/05 above 54, the target would be 67. The breakout was on more than 150% average volume and the subsequent pullback and successful test of new support was on average volume, a bullish sign.
It may seem a lofty target, 67. But looking at the 5 year chart, it doesn't look so absurd. They just announced a follow up order from the Army for 133 million bucks, the largest single order it has ever received. The PEG on the stock is under 1. The 67 area just may be in the cards.



With a positive New Homes Sales report out, the Housing sector looked strong today. KBH looks to be ready to move higher. There are many resistance points along the way, so an options trade will be trickier. Profit targets would be good. Otherwise, a stock position would be ideal.


Crude oil has been week in recent days.


Yet the $OIX confirmed a bullish Harmai pattern today by closing higher than the two day pattern.



Our UNT did form a bullish engulfing pattern today at support, but I'm not in love with the technical picture on the chart and I'm sure there are other oil stocks out there that are stronger.

Like the OIX, the Oil Services Index shows some good bounce potential with a bullish engulfing pattern right at the 50 and 200 MAs for support. The index is just below the support line I'd have liked to see hold, as well as the 200 MA, but it's not yet a convincing break.



From that sector, our very own BHI looks very promising. The harami formation today needs a higher close tomorrow for confirmation. The stock is poised on horizontal support and the 200 MA with the 20 rising through it. Very bullish potential. Low risk entry here with upside to the order of 7 or even 12 points.
Remember that this one trades at a discount to its group and has a PEG of about .50. Very low. Very good.


That's all for now.

Scrolling through the list

As the Nasdaq is looking ever more questionable and the SOX has definitely broken its uptrend support line, AAPL seems to have broken down in perhaps a very significant way. It has Definitively lost the horizontal and diagonal support and now it looks like the 50 MA too. That makes three strikes. Next likely support is at 78. The 200 MA is all the way at 70.

(Click images to see them larger.)



BHI is holding above 74.50 support and the 200 MA. Yesterday's inverted hammer made a bullish Harami.



The continued strength from COH warranted a mention from Mike Coval in Wednesday's Market Commentary.



CRDN is in a bull flag and holding above the 20 MA.



CTSH has a trend that looks a little long in the tooth and might be ready to break its Uptrend support and the 50 MA in one shot.



CWTR doesn't look very pretty and just bounced off the underside of the 200 MA. Chart shows a couple bearish divergences with the MACD in the last year. Interesting to see how common these are and how powerful a signal they seem. Here's an article on the subject.



HWAY looks to be warming up to breakthrough the 200 MA with the help of the 20 MA and support just below at 46.50.


ISE looks more likely to test the 200 than climb back up to the 50. The intermediate uptrend is coming in jeapordy with a test of the latest low.
A few posts back, I suggested a 50/45 bull put. I paper traded it and on the break of the support line closed it for a small loss.



KBH seems to be respecting the 200 MA and looks inclined to use it as support now. There is decreasing volume on the pullback from the recent high.



NTAP is right a the crux of testing horizontal and diagonal support and shows a potential double top with a bearish divergence on the MACD. Volume spikes recently have been on buying days.



RIMM had earnings today after close. There are a lot of writers pointing out overvaluation. The stock has more than double since August. But with earnings coming in at a penny more than the analysts' expectation, the stock was up over 5% after hours. Here's a good summary of the announcement.
With a fresh bounce off the 50 MA, if Friday closes up above 141, this could be a nice bullish entry for further upside movement. A Bull Put spread might be a nice conservative approach.
Implied volatility on RIMM ran up above 55% into this announcement. Perhaps there will still be a nice level of it to sell tomorrow.



UNT still has a longer term downward bias, but may find support at 48.80 and its 50 MA.



VSEA broke out big today, 5.7% on a day when the SOX is down 1.3%. Only news I could find was of a live webcast for their coming earnings announcement in January.



WCC looks to be having trouble. Continued selling today on big volume. 56.50 is likely support. Peter R. at Shadow Trader always says that volatility contraction leads to volatilitiy expansion. Notice the three Moving Averages coming together over the past few months. With the price now below the 200 with the others likely to follow, could this be the beginning of a more meaningful move down?
Perhaps a bounce a bounce off the 56.50 area support level could be played with a bull put spread for a bounce with the intention of buying back the short on continued breakdown.




ZMH wants to go higher though couldn't quite make it beyond resistance today and formed a shooting star which technically still needs confirmation, though the past few weeks have shown a number of bearish candle patterns.



It's interesting to look through the list and find that I'm still bullish in the short term for 10 of the 15 stocks. However, some of those "bullish" stances could easily change very soon: NTAP, CTSH, CRDN