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New Trades - 12/23/08 -


Play Editor's Note: I have turned a lot more cautious on the stock market. Bullish plays are not working and we're starting to see more breakdowns and failed rallies. Investors confidence remains incredibly weak and instead of seeing a rally into year-end I suspect we may see a slow fade lower. I'm adding a few bearish candidates to the portfolio tonight.


NEW BULLISH Plays

symbol: AMAT -( Applied Materials )-

closing price: 9.72, today's change: -0.43, stop loss: 10.51

Picked on December 23 at $ 9.72
Change since picked:     + 0.00   			
Average Daily Volume:       4.6 million     			
Earnings Date          02/10/09 (unconfirmed) 

Strategy notes:
The semiconductor stocks are starting to see some profit taking after their impressive rebound off the November lows. AMAT has run into resistance near its 50-dma and the $10.75 region. Today's decline in AMAT is a bearish breakdown under support at the $10.00 mark. We want to use it as an entry point for bearish positions. An alternative entry point would be a bounce back to or failed rally near $10.00.

We're going to start the play with a stop loss at $10.51. More conservative traders may want to use a stop just above today's high ($10.24). We have two targets. Our first target is $8.75. Our second target is $8.15. I do expect some support near $8.50.

-chart-


symbol: AVP -( Avon Products )-

closing price: 22.46, today's change: -0.79, stop loss: 24.05

Picked on December 23 at $22.46 
Change since picked:     + 0.00  
Average Daily Volume:       4.6 million     			
Earnings Date          02/05/09 (unconfirmed) 

Strategy notes:
AVP's oversold bounce from its lows has run into resistance near the 50-dma and the $24.00 level. Now after several days of failing to breakout past this level the stock is rolling over. This looks like our chance to short the stock on a drop back toward the lows.

I'm suggesting bearish positions now with a stop loss at $24.05. You could argue that AVP might have some support near $22.00 so more conservative traders may want to wait for a decline under $22.00 to open positions. Our first target is $20.25. Traders should close most of the position here since the $20.00 mark may be round-number support. We are going to set an aggressive target at $18.75.

-chart-


symbol: JNPR -( Juniper Networks )-

closing price: 16.82, today's change: +0.18, stop loss: 17.25

Picked on December 23 at $16.82
Change since picked:     + 0.00   			
Average Daily Volume:       9.2 million     			
Earnings Date          01/22/09 (unconfirmed) 

Strategy notes:
The bounce in the networking sector is in jeopardy and looks ready to break the pattern of higher lows. The NWX index has already developed a short-term trend of lower highs. JNPR may be a good way to play any correction in the networking industry.

I would consider this a higher-risk play because the technical picture is a mixed bag. Bulls could argue there is still some support in the $16.00-16.25 zone. Today's session looks like a mini (bearish) double-top under $17.00. We'll start the play with a stop loss at $17.25 but you could try playing with a stop lsos closer to $17.00. Our first target is $15.25. Our second target is $14.25.

-chart-




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