Smoking Securities

Half Baked High Finance

Archive for the ‘Business’ Category

New High Short Squeeze ($PCLN)

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PCLN090810Priceline.com has been a winner since breaking past 119 on July 20th, subsequently rising 25% in less than a month. As a stock making new highs with a large percentage of the stock short, the squeeze has been a thing of beauty as PCLN flies past 2008 levels.

Trading in an uptrend above a rising upper Bollinger is an indication that the online reservation business is strong, and that the market expects continued prosperity in this sector. At the risk of sounding like a paid endorsement, I use Priceline’s hotel room bidding service to find great deals on four star hotels, often 30-50% cheaper than advertised rates.

A break below 133.2 would start a secondary downtrend, suggesting profit taking, but PCLN looks like a great investment in a well branded company so long as it can stay above 99.2. In a perfect world, a pullback to the 120’s before resuming the upward path would provide a great entry point, but only time will tell.

Written by chucklesamadeus

August 11, 2009 at 12:15 am

Twitter Ticker ($FRE)

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FRE090810Freddie Mac is hot on StockTwits as the government sponsored mortgage giant surged over 125% after reporting a profit. As I mentioned here, try to ignore public perception, financial companies related to mortgage securitization are prospering; look at AIG and Fannie Mae.

Breaking to multi-month highs with strong volume, FRE is trading in an uptrend above a slightly rising upper Bollinger, suggesting real buying interest. A move below 1.37 would begin a secondary downtrend, but the primary trend will remain intact so long as Freddie holds above .68.

As time passes, more indications of a strengthening economy can be seen, and the market continues to reward risk takers with new highs and broad based participation. Pullbacks will occur, but dips look like buying opportunities as money continues to come off the sidelines.

Written by chucklesamadeus

August 10, 2009 at 11:56 pm

NASDAQ McClellan Oscillator ($NAMO)

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NAMO090805The NASDAQ McClellan Oscillator, a short term breadth indicator, began a downtrend on Wed. Whether this turns into a sustained move lower remains to be seen, but it is an early warning sign that you should be aware of.

To my dismay, I was stopped out of one of my favorite leading stocks, STEC. Weakness in a market leader is never a good broad market sign, so I’m growing a bit wary of more bullish proclamations.

Though the trend is technically higher, it is likely that I will be cutting any positions that are underwater and raising my stops to protect my gains. Tops and bottoms take days, weeks and months to form, so I’m not selling the farm yet. Trade what you see, not what you think.

Written by chucklesamadeus

August 6, 2009 at 9:32 am

Twitter Ticker ($AIG)

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AIG090805American International Group was hot on StockTwits as the insurer opened below $14 and closed at $22, a remarkable daytrade indeed. Whatever voodoo catalyzed the squeeze remains to be seen, though my sources tell me it involved monkey flatulence and Franz Geithner.

Though AIG is in a primary downtrend, the secondary trend is above the 20sma, suggesting a target of $30.8. A move below $18.20 would neutralize  the secondary downtrend, but $11.70 is the last visible support on this timeframe.

Regardless, the financial sector continues to skin every last bear, even the blokes at Fannie Mae and Freddie Mac are catching a bid. Shorts are fighting the Fed, and judging by the higher lows and higher highs, the printing press is working.

FNM090805FNM had a major breakout today, and it’s in a much better technical position relative to AIG. Trading in an uptrend above a rising upper Bollinger is quite bullish in this market, and it has a price target of 1.09. A trade below .68 would endanger the uptrend, but .49 is the last known support.

These government shell companies are casino stocks for savvy traders with a keen sense of position size and time horizon. There is plenty of money to be made, but bear in mind these stocks can move up 300% and crash 75% a few weeks later.

Written by chucklesamadeus

August 5, 2009 at 7:32 pm

S&P 500 Bullidex ($ES_F $SPY $SPX)

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BPSPXVIX090804The S&P 500 Bullidex formed a new high as it rose 4.05% to close at 308, indicating an increase in the number of rising stocks relative to volatility. Although the S&P 500 has yet to trade above the September 2008 level, the Bullidex shows internal strength comparable to May 2008.

With volatility making lows and more stocks on the rise, the chances of buying and holding a stock for a profit are good, so put your money to work. There is no telling how long the trend will last, or where it will end, but I do have a 1140 price target for the s&P 500.

SPY090804After breaking out on July 16th at $94.32, the SPY hasn’t looked back, and remains in a strong uptrend above a rising upper Bollinger. So long as the SPY can stay above $85.70, equities look like a good way to keep purchasing power.

Written by chucklesamadeus

August 4, 2009 at 11:07 pm

Twitter Ticker ($RIMM)

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RIMM090804Research In Motion is getting attention on StockTwits as many technicians are seeing breakouts. On June 19th RIMM was trading at 72.78 when I posted this, “a break below 70.87 may encourage more selling, but trading above the upper Bolllinger in a rising trend calls for buying the dip.”

Looks like things have played out according to plan, and the prognosis remains the same. So long as RIMM can stay in an uptrend above a rising upper Bollinger, this is a good stock to hold. My only cause for concern is the recent secondary downtrend from June to July, which technically made a lower low.

A breach of 62.28 would jeopardize the bullish thesis, but I’m counting on a break of 86.36, despite the downside price target of 54.89. Fundamentals, macroeconomics and valuations be damned, broad market strength continues to carry everything up, so don’t fight the rising tide.

Written by chucklesamadeus

August 4, 2009 at 10:39 pm

New High Short Squeeze ($WFMI)

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WFMI090804I posted a tweet about Whole Foods awhile ago, suggesting it was a strong candidate for technical reasons with a solid brand name to boot. @NoDoji agreed, and today that cat tweeted a call to load up on WFMI before earnings.

Much of WFMI stock has been sold short, so Tuesday’s earnings report may precipitate a covering frenzy. Looking at the after hours market, WFMI has risen $3.40, up over 13%. CHA-CHING!

Technically Whole Foods remains strong, breaking out on July 20th and trading in an uptrend above a rising upper Bollinger. The price target is 32.04, but I treat this number as a guide, and not a profit taking marker.

Written by chucklesamadeus

August 4, 2009 at 6:34 pm