Stock Trading Predictions & Technical Analysis

Wednesday, December 23, 2009

Quick Updates - DOW, RIMM, SNDK, NVDA, CSIQ, MGM, AIG, AAPL

DOW - BUY SIGNAL: DOW has now given us a BUY SIGNAL after breaking over its resistance at $27.50 and its down trending channel.

RIMM - WAIT: After pulling back from its big +15% move last week, RIMM appears to have given us a bottom signal, after hitting a lower low than in the past few session while bouncing back up from its critical support level. To confirm this observation, RIMM needs to hit a higher low and higher high than today. A fall below $66.00 could send RIMM back down towards its 50 day MA around $62. I expect RIMM to continue higher in the upcoming sessions, and I don't see it a hit a lower low than today as this represents a critical support level.

SNDK - HOLD: Since the beginning of the month SNDK has gained now more than 50%. In the last 18 sessions, SNDK has consistently hit higher highs while only having 2 sessions with minor losses. As SNDK continues higher, you should HOLD on. However, the volume has been decreasing the last few sessions despite being relatively strong and over average, which may hint that the pullback is near. However, for the moment SNDK is a HOLD and from all the over 200 stocks I'm following this is the top performer of the month.

NVDA - HOLD: NVDA appears to be about to top, and today's high is possibly the top with the OBV having a negative divergence. NVDA currently stands around $18.00 and could be pulling back around $16.00 in the short-term. The major up trend remains strong. NVDA is about to give us a SELL SIGNAL for the minor trend (short-term).

CSIQ - HOLD: Here is another stock just like SNDK that has gained over 100% since the beginning of November, and remains a HOLD. Volume is still relatively strong, so for the moment there are not any imminent signal of a significant pullback. CSIQ has been in a major and steady up trend for nearly 2 months.

MGM - WAIT: Today MGM has jumped as much as over +5.00% and has bounced back up its support level of around $9.00. MGM is giving us a sign of a bottom today, and for the moment we can only expect a move back towards $10.50 at its 50 day MA. Only when it will break the 50 day MA will the major down trend be broken. You may profit in the short term from taking a position right now, but the trend is still down and I would rather wait for a clean break up over the 50 day MA. Today's move is very encouraging though and MGM does have strong potential of starting an up trend now.

AIG - WAIT: After giving us a BUY SIGNAL yesterday after a move of over +10.00%, AIG has pulled back around -5.00%, and is now back just under its 200 day MA. Again, we want to see AIG break the 200 day MA and stay there for at least 2 days to consider taking a long position. Keep in mind that there is still some significant resistance around $34.50 at its 50 day MA.

ABX - WAIT: After having a strong pullback ABX has hit higher lows in the past 4 sessions and bounced back up its support level of around $38.00. Today, ABX has made a big move up that we haven't seen since the last up trend. ABX currently stands just below its 50 day MA and if ABX manage to trade and close around $41 and above we will have a BUY SIGNAL. Today's move is very encouraging and the first sign of a bottom, but we first want to wait for a a 2nd up session with a break above the 50 day MA before calling a BUY SIGNAL. Today's move has to do with a little bounce back up GOLD had, however it's too early to say if GOLD has bottomed and will resume its up trend. We are now waiting for an imminent BUY SIGNAL, but if ABX pullsback again and fails to break the 50 day MA, you may see it trade sideways for a while between $38 and close to $41.

AAPL - HOLD: After giving us a BUY SIGNAL, on Monday, AAPL has been continuing higher for a 4th straight session hitting higher lows and higher highs. AAPL managed to break back above its 50 day MA, and should at least head back around its 52 weeks high of over $208 before facing any significant resistance. A move above the 52 week high would give us a STRONG BUY SIGNAL.

LONG RIMM
LONG ABX
LONG AAPL

DRYS - In a Major Down Trend

DRYS - WAIT

DRYS has been in a major down trend since mid-September, and has since narrowed while still continuing lower. As things stand right now DRYS is still trending down and has the potential to head down as low as $5.50 and possibly $4.75. However, DRYS is heavily oversold according to the stochastic and slowing down trend may signal that it may be nearing its bottom. However, even if DRYS breaks back above both its 50 and 200 day MAs, the major trend down would still not be broken. A break above $7.25 is required for any BUY SIGNAL. DRYS seems to be trending in a minor down trend within the middle of the major down trend. In the short term DRYS could head one direction or another, and if it's up you could make a reasonable gain despite having the major down trend still intact. However, at this point this is pure gambling, and any stock who is in a major down trend will have more tendency to trade down rather than up. So, until we get a clear BUY SIGNAL with a break above $7.25, taking a long position with DRYS is too risky as it could go in one direction or another. For now DRYS is a WAIT, and possibly a long one.

FAS - WAIT for the BUY SIGNAL

FAS - WAIT

FAS trading sidrways since early November, and has decent support at about $69, with the upper channel line trending down. FAS has since had 3 consecutive up sessions and the stochastic had given us a BUY SIGNAL. However, since early November FAS has been trading below its 50 day MA which it has yet to cleanly break and stay above, and that is why FAS is a WAIT. FAS is now trading just below its 50 day MA, and break above it around $76.00 would give us a BUY SIGNAL. However, I would wait until FAS trades at least two consecutive sessions above its 50 day MA before taking a long position. If FAS manages to hold, the 50 day MA will become the support level. FAS will still have to deal with resistance around $80 to $95. So despite a BUY SIGNAL and possibly start of an uptrend, it may take a while after before it can have a steady trend up, as it may possibly start trading sideways around $80 to $95.

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TECHNICAL INDICATORS

BUY SIGNAL: Indicates the possibility of the start of a new up trend or the continuation of the current up trend. This signal may be often given in the early stages of a potential new up trend that was preceded by a down or sideways trend. Such signals do not always succeed and may fail at time.

BUY: Indicates that the current up trend is already in motion and a BUY SIGNAL was already given earlier. A BUY does not necessarily indicate that the stock will continue higher from here, but simply that the stock is trending up. The further into the trend you decide to take a long position, the more risk you have of seeing it reverse back down sooner rather than later.

STRONG BUY SIGNAL: Indicates a stronger, more significant and reliable signal than a BUY SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG BUY: Indicates that the current up trend is already in motion and that STRONG BUY SIGNAL was already given.

SELL SIGNAL: Indicates the possibility of the start of a new down trend or the continuation of the current down trend. This signal may be often given in the early stages of a potential new down trend that was preceded by an up or sideways trend. Such signals do not always succeed and may fail at time.

SELL: Indicates that the current down trend is already in motion and a SELL SIGNAL was already given earlier. A SELL does not necessarily indicate that the stock will continue lower from here, but simply that the stock is trending down. The further into the trend you decide to sell a position, the more risk you have of seeing it reverse back up.

STRONG SELL SIGNAL: Indicates a stronger, more significant and reliable signal than a SELL SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG SELL: Indicates that the current down trend is already in motion and that STRONG SELL SIGNAL was already given.

HOLD: Indicates that traders who already hold this stock, should hold on as long as the trend persists. This signal is usually given during an up trend for which it would be considered too risky to take a long position at this point.

STRONG HOLD: Indicates that the current trend has been in motion for a while and rarely deviated away from the trend. Although the stock may continue higher, there may not be enough potential up side to trigger a BUY SIGNAL. This type of indicator usually means that the stock has very strong support levels which may have been tested but not broken.

WAIT: Usually given during a sideways trend for which we are waiting for a move that would trigger a BUY SIGNAL or SELL SIGNAL. This could also indicate uncertainty and the risk that would be taken if you were to take a long position at the current level. Taking a long position after giving a WAIT indicator is considered a gamble.