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Chop! Chop! Chop it up!!

Author: Varun Kanotra (info)
Website: http://www.targetsix.com/
Posted: November 30th, 2006 at 12:54 am EST
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Sorry folks for being out of commission for a while. I had some unexpected travel that came up.

Let’s do a quick round up of the market and see where things stand.

The DOW:

The DOW respectfully bounced off the 30 day moving avg. It seems that the 30 day moving average has been posing as nice support since june. I see this as a bullish sign for the market. We could see higher highs forming in the near future.

Here’s the SPX:

Similar story on the S&P right? Not much different here except for a similar bounce which could bring the bulls back.

NASDAQ:

The NASDAQ appears a little more bullish here since we gapped up on the open today and went higher, even though there was some resilience by the bulls to go extreme. However, we could see that momentum come in as early as tomorrow.

The semiconductor index ($SOX) which tends to lead the techies closed nicely around support. The fact that it did not break-down back into the channel speaks to the unwavering support the bulls have in this market. If we continue higher in the next couple of days, we could close the month (and the year) on a positive note. If you think about it, that is the path to least resistance right now for the market.

Here’s a closer look at the SOX so you can see what I’m talking about:

If you’re interested in trading the semi-conductors, take a look at the SMH. You can trade it like a stock.

Here are some trade opportunities and follow-ups:

HYDL:

Volume in this stock surged almost 4 times today as buyers pushed the stock out of its recent consolidation. I like this one for a short-term bullish play although there is some head wind around 79.40 or so.

GOOG:

Google sold off nicely and is positioning itself for some bullish action. Some consolidation and resting here would help the stock make new highs. I would watch cautiously for a decent entry point, there are several. I don’t see this stock shedding off more gains. Worst case it should consolidate. If it does break down below 475, I’d turn bearish on the stock for sure. The selling today on weaker volume just don’t make me sense any bearishness in this stock.

AAPL: This is a $100 stock. Its just a matter of time. I like this one here. Enough said.

RIMM:

This one has been indecisive for the last couple of days. The extreme bearish action yesterday and the buying today does not seem to create enough reason for Research in Motion to pick a direction. When a stock is confused, its best to wait to see what will happen. The chances are that the stock should continue its primary trend, which is up in this case. However, we won’t speculate and will wait and see what some more time decay brings.

SHLD: I like this one for a bullish trade. It’s sitting at some firm support at right below 170 or so. $185 would be a good first target.

Keep those stop losses on at all times, hence the title of today’s blog.

See you tomorrow.

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