CCJ En Fuego, ZHNE, and More!

Hey Gang:

CCJ is "En Fuego," the stock is just a machine right now. Uranium prices are soaring and CCJ is benefitting nicely. So today, the stock broke through the Ascending Channel I drew so now what can we surmise from the chart? Let's take a look:


It looks like the stock has found a new base to jump off from (see Blue area), so we could (not a recommendation) buy here, and set a 1% Swing trade trailing stop and see how high this could go.

Let's look at yesterday's suggestion, ZHNE. I stated that there was heavy insider buying, and a classic three Green Arrow signal. I got in today, so let's see what happened:

BIG pop relatively speaking. Sure, it was only $0.16, but on a $1.33 stock, that represents a 12% move. That's pretty big, and look at the volume the last two days. The stock also smashed through the 200 DMA which now becomes support. Something BIG seems ready to happen here, hopefully something GOOD!

A couple of more plays I am interested in:

BBY

SBUX
Until next time...Happy Trading!

Quadruple Witch is Dead..now what?!?!

Hey Gang:

Hope y'all had a good weekend. Last week we had some more volatility with a $240 drop, then some recovery. Is this the "End of the Rainbow" for the Bears, or a "Bull Trap"? Let's take a look:

Here is a portion of the 5-Year Weekly Chart of the $INDU (Dow). You'll notice that we have begun to head down towards the top of the Major Resistance Line (support for us now) of the Major Ascending Channel (in Blue). If we bounce from here and continue up, this may signify a NEW Ascending Channel may have formed, and we could then use those support and resistance lines for analysis. But let's stay with what we DO know now. Let's take a closer look:

You'll notice that the $INDU has bounced off the aforementioned Major Ascending Channel Resistance line a couple of times already. Also, the MACD and STO are favorable towards an upward push. However, that being said we also have some other things to contend with...bad economic news, the forthcoming "Sell in May and Go Away" mantra, and more importantly, that Diagonal Resistance line I drew from the recent price action. At this time, it almost looks like a Decending Triangle since we are making Lower-Highs, and Equal-Lows. There is also talk that this "correction" is not over yet.

In Wall Street terms, a "correction" is a market drop-off of ten percent (10%). I have marked where that would fall to in a green box with "10%" in it. Once it hit there, it MAY be time to get into some positions. That would be an area where there could be some bargain hunting. Of course, I said "MAY" because if it hit there, we would be in a downtrend up to that point, so you need to be careful.

By the way, SBUX hit a bounce (like I predicted as a Triple Bottom) and took off on Friday. Full disclosure, I got taken out of this by my stop-loss on the -$240 day and did not re-enter due to Quadruple Witching Week which is always volatile. Anyway, keep an eye on it, it may come back a little bit.

Happy Trading!

Come Into My Trading Room

Hey Everyone:

Keith Volz has asked me to post the charts for the recent plays I made, and I am happy to do so. The charts should be pretty self-explanatory. I do this with ALL my charts, I set my BUY target area (or "bounce" area), as well as my "Target Price," which is one of my decision points to either take profits at resistance, or sell a Covered Call. By putting these right on the charts, it is very easy to see where I am in my trades. Reviewing them takes all of 2-5 seconds.

You'll notice that my plays usually are entered when the stock is at support and my MACD and STO are at their very bottom (or as close to them as possible). I normally DO NOT WAIT for 3 Green Arrows as I find that while it may be more "convincing," it is also less profitable. By playing earlier (when the MACD and STO begin to head up) I am buying at a lower price and therefore have less risk if I just play the 3 Green Arrows.

If I see a severe bounce, I may nibble a bit to test the waters, then wait for a pullback and buy more shares near support. The nibble gets me into the trade and if it soars from there, at least I have something. If it pulls back to support, I buy more because the Stop-Loss is the same (1% Swing, 3% Trend below recent support), but my entry price is lower, exposing me to less risk if the stock falls.

BHP
CLF
GRMN
PCL
PICO
SWK
Calling a Bottom

I also got into a small position of SBUX today. Now, from the looks of the chart, you may ask, "why would he buy a downtrending stock?" The simple reason is, "I believe it hit bottom." Here is the chart:You'll notice it hit this level twice before and bounced. It has bounced again and I got in a small position. I really don't know how high this could go over the following months. I suspect maybe those horizontal resistance levels may come into play, or even some Fibonnacci lines too if I draw them. Anyway, my reward/risk ratio seems pretty good, so we'll see how it plays out.

By the way, I bought SBUX back on 9/12/06 when it bounced making a Higher High and a Higher Low. That trade worked out very well! Needless to say, after exiting that trade (after 2 Covered Calls), I have waited patiently for it to come back to me. Maybe it has? Or maybe not?

Finally, let's revisit HUM:
The stock has definitely made a bounce here (making a Higher high) and I would consider getting in. You see a couple of Price Targets, make sure your portfolio positioning is reasonable (I never expose more than 1% of downside in any one stock), and go for it (not a recommendation to buy).

Happy Trading!