Wednesday, November 21, 2012

11/21/12 Wed Watchlist

$SPY is retesting key res 139.4, which it failed and panicked on the first attempt but rebounded quickly to retest toward eod. Judging by the vol and assuming there is no exceptional economic news, I see it failing again and today being a red day; it was able to break trendline and find some supp so it could fade sideways until it cracks and loses trending supp.

Short Set-ups
Notice that I have some earnings winners as potential shorts, for two reason: (1) these get over-extended quickly with alot of momo and hype buying; and (2) they are usually easy to borrow, which is a problem I run into with stocks that have poor fundamentals. Until I open an account with IB or the like, I'm probably stuck shorting strong stocks when they get grossly over-extended.
SideNote: Someone asked me in TimAlerts chat why I don't short weaker set-ups. Well like I said earnings losers are hard to borrow at SureTrader. Secondly, I short recent earnings winner rather than those announced weeks because recent winners get much over-extended obviously due to momo and excessive hype so they come down much nicer like ES did just days after its earnings rally.

VVUS - is fundamentally poor imo as it recently missed its earnings (11/6). I shorted it yesterday at 10.60 and covered 10.40 for 100buck scalp, shortly after it would panic 15cents more. Key levels are near 11.2, 10.7, 10.2, and 9.9. It has already proven it could break thru 10.2 so an aggressive short squeeze could take it to 11.2 to test but I don't see it happening with this fundmentally poor stock (only good news can cause such a rally). Potential short on any spikes under 10.2.

FB - is a big earnings winner that will continue to try to zap shorts until it runs outta fire power. Key levels are near 25.9, 23.3 and 22.3. It has already proven it could break 23.3 so I would not short as it could and probably will spike to 25.9 because it is fundamentally solid stock with alot of supp and hype. Ideally, i'd wait for it to test and fail near 25.9 to short it aggressively but only if it fails 25.9 which I expect judging by the fading vol.

KKD - this is yesterdays earnings winner that is spiking, zapping, and squeezing like an earnings winner should. Its not nearly as aggressive at squeezing shorts like FB but respect it. Key levels are near 9.7, 9.3 and plenty of supp near and below 8.2. It has already proven it could break 9.3 so I would wait for it to try spiking towards 9.7 for my ideal short entry.

Note: Over-extended earnings winners are as much a buy as they are potential shorts in my book so be prepared to buy into short squeezes and short the end of the squeeze.

Long Set-ups

JVA - spiked with vol yesterday as it bounced where it seems to be basing now; i sold my 6.68 position at 6.64 to cut loss and wait for the breakout. It could breakout any day now so be prepared and watch vol because that tells all. It has a spike/fade pattern so you much be prepared to enter or you'll miss and chase. Key levels are near 5.7, 6.3, 6.4 and heavy res at 6.9 with upside to 8s from there. It closed above 6.4 so watch for vol today as it will need it to hold above 6.4.

SYNC - is really trying to base here about 4.8 but it hasn't been able to hold above 5.17. Keep in mind that this was an NIA pump and dump that was pumped from 8 to 18 so imagine how many angry bagholders there are out there selling into any spike to cut there losses for taxes. But this is also trying to rebound with several catalysts including earnings and NIA repumping it. Its a battle worth watching at these levels as it tests at its all-time low. Just wait for the breakout on this one. If you don't know what a breakout is, get Tim Sykes' two PennyStocking DVDs and learn the breakout patterns.

HOV - this stock has been trending and breaking out for months on nearly all time-frames. I've been scalping it on and off. Today 5.50 is he breakout to watch as it could hit more 52week highs. Key levels 4.96, 5.50 and 5.95. I will be buying the breakout if it breakouts. Its a potential short if it fails at 5.50 (meaning if it fails to hold above 5.50).

Happy trading and happy Thanksgiving! Gobble gobble. Peace.

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