A swing trader's thoughts on the current market environment including stocks to consider for long or short positions.
Nasdaq looks oversold here and I would consider putting on long positions in QQQQ for a ramp up back to this year's open. However, I don't think this year the indexes will spend much time above the year's open due to concerns about a U.S. recession instilled in the minds of investors.
Cisco looks like a buy to me here after having retraced some 29% from its high in November. If market bounces, I see CSCO heading back to $28 over the next 6 weeks.
TOL looks to be setting up for a potential reverse H&S. I wouldn't touch it here though and wait for another dip into low $16s. Toll Brothers is in a weak sector - home builders. If you go bottom fishing, good luck on it but its something that caught my attention the past three sessions as it has been doing green while the markets have been bleeding.
Huge volume coming in over the last 4 days on Cititank, er, Citibank (C). Interestingly, Friday was a high volume day with a very tight bar. This could be a sign of reversal after a long down trend. Also note that $25 stops got taken out Thursday/Friday and then some. I would be looking to buy Tuesday with a 1% stop below Fridays low. Again, this is in a weak sector.
This week Oil Service HOLDRS (OIH) got a brutal beating and looks like it is damaged goods to me. I'd be looking to short in the $176 area on any attempted spike up if it attempts to bear flag. Looks to chop sideways $150-$165 land over the next few weeks.
Tonight Cramer said to buy Microsoft and get in on it before earnings this coming Thursday. Looking at the chart, I see a descending triangle and that isn't exactly all inspiring for a long term trader especially when the "R" word (recession) continues to float around. However, I'd bet he's right and figure it'll gap up to $36's while being held down in the $32s leading up to Thursday. We'll see.
Uptrend line intact and I drew it straight across the middle. Everytime it has dipped below this line, it signals a buy with a bounce coming several weeks later. Is it different this time? Target looks like its target (ahem) is to $56. $RLX (SP retail index - chart not shown) has come off some 33% off its highs and has bounced recently making higher highs, higher lows - suggesting that it has firmed and bottomed.
Note to self: Incredible gap down this morning as Asia and Europe got creamed the day before. Fed announces 75 basis point cut which so far has stopped the bleeding. Many financial companies have popped including Citigroup, Bears Stearns, etc. Starting to look like a hammer day.
Spanking of index coming in. SP Futs lose 1304 and we rollover with fleas with lots of scratching for the day (choppy down).