Navivest Stocks and Options Blog

Technical Trader – Cummins Inc

Jul 21, 2010 Options, Stocks, Technical Analysis

Cummins Inc (CMI) is up $1.51 to $74.05, currently one of the strongest performers among S&P 500 stocks. However, the stock will form a double top if continues to advance and hits its next resistance area of $75. Traders might want to look at shorting the stock above $74.50 or selling call the September 85 calls, which are asking $1.20.

Tags: cummins inc, options writing, sell calls, Technical Analysis

Google’s Stock Falling As Markets Rally

Jun 21, 2010 Stock to watch

Google (GOOG) is down today and falling, even as the broader stock market is rallying, with all the major stock indices posting very strong gains.

At 10:38, Google is down $5.22 to $494.81. There is no news out on the company. that’s impacting the stock and this might be more of a technical trading issue, with Google shares facing resistance at the $500 area, which the stock has had a time clearing in the prior four sessions.

Tags: google, Technical Analysis

IBM Leading Dow Rally With 4% Gain

May 12, 2010 Company News, Stock to watch

Shares of IBM (IBM) are up $5.09 to $131.98, helping to boost the Dow to a 132.63 points gain in late trading. The company announced this morning that it will be spending $20 billion on acquisitions over the next five years.

Tags: ibm, Technical Analysis

The Technical Trader – Google

May 3, 2010 Uncategorized

Google’s (GOOG) stock, which closed at $595.30 on April 15, have fallen to $530.60 (05/03/10). At current levels, the stock may not only have found support, but is also forming a triple bottom. Multiple bottoms are generally bullish technical signals and we could see Google shares rebound from current levels, assuming the stock market holds up.

On March 24, with Google having pulled out of the mainland China market, we posted a Google Baidu (BIDU) trade that recommended shorting Google and going long Baidu. Google was at $541.33 and Baidu was at $610.42. Google is down $10 since then and with Baidu closing at $708.99 on 05/03/10, we are up $98.57 in those shares. Obviously, we are closing out the Google short position here.

Tags: baidu, google, Technical Analysis

The Technical Trader – Genzyme

Mar 21, 2010 Technical Analysis, Trading Idea, Uncategorized

Biotech company Genzyme (GENZ) had the second best performing stock among S&P 500 stocks on Friday (Precision Castparts was the best performer with a $2.44 move to $121.79), climbing $1.98 or 3.45% to $59.39. The shares traded 4.6 million shares, compared to a most recent three-month average of 2.6 million shares.

On January 5, the stock, which had been in a downtrend since October, hit a bottom of $48.18, and started rebounding. This was a very bullish signal, as the stock had long-term support at $48, which was maintained. The stock has tested or fallen to the $48 area four times going back to August and each time, the shares bounced off that area.

Since the January rebound, the stock has had a nice upward formation, culminating in Friday’s decent move.

GENZ is once again butting against resistance, but we would look for short-term buying opportunities. If the shares are moving to the upside, we would enter and look to capture two to three points.

The April 57.50 calls are asking $2.85 and a $1 move to the upside from here on Monday or Tuesday could mean a better than 40% gain.

Navivest provides subscription based trading advisory services and newsletters for options, equity and ETF traders. More information on our services can be found on our website at http://www.navivest.com

Tags: genzyme, Technical Analysis

The Technical Trader – Sterling Construction

Mar 17, 2010 Technical Analysis, Trading Idea

Sterling Construction

On Monday, before the stock market open, Sterling Construction (STRL) reported earnings that disappointed Wall Street. The stock gapped down, opening at $18.44, from a close of $21.15 the Friday prior and ended the session at $17.64. On Tuesday, there was further erosion of the company’s market capitalization, as the stock lost another $1.59.

On Wednesday, on an upgrade from KeyBanc Capital Markets, Sterling Construction rose $1.50 to close at $17.55, an incredible one-day gain of 9.35%.

With the turnaround, the stock is giving off some bullish technical signals, which could be a signal that there are some nice quick profits to be had in the shares. The $16 area is a key support area, which we did not want to see violated and while the stock did hit an intra-day low of $15.91 on Tuesday and $15.56 on Wednesday, the stock closed above this key area on Wednesday.

Sterling Construction may look to break above $18 and hit $19 near-term, which would be an 8% gain and while we would look for major resistance at $19, we may even see some more upside in a bullish stock market, as the stock looks to fill the downside gap created this week.

This would be a short-term play and a long trade should be initiated only if the stock is moving to the upside. Upon entry, we would look to take quick profits, exiting the trade on a 5% gain.

Tags: sterling construction, Technical Analysis

Technical Trade of The Day – AboveNet

Mar 11, 2010 Uncategorized

AboveNet - 03/10/2010

AboveNet (ABVT), which provides high bandwidth connectivity solutions to businesses, yesterday fell $7.70 to $55.46, a huge 12.19% decline, after the company reported fourth quarter and full year 2009 results. The company also provided guidance for the 2010 guidance, all which served to disappoint investors.

The stock hit an intra-day low of $53.32, but managed to cut its losses. With the rebound in the shares off the day’s lows, the stock held above $55, which is a support area. However, we don’t expect to see the stock rebounding immediately and we should see a retest of that $53 area again.

A drop of $1.50 from yesterday’s close would be a 2.7% gain and traders shorting the stock here should realize that over the next five trading days. With this trade, take quick profits.

Tags: abovenet, Technical Analysis, trading recommendation

The Technical Trader – Google

Mar 10, 2010 Stock to watch, Stocks On The Move, Technical Analysis, Trading Idea

Google (GOOG) was up 2.9% or $16.26 to $576.45 today, a strong performer in an otherwise flat market. On March 2nd, in a post on entitled “Google Could Be Heading Much Higher” (access here), we recommended the stock based on a technical analysis of the shares. We were looking for the stock to move to $580, with some possible resistance at $560.

With the stock now at $576.45 and the stock up better than thirty-six points since our recommendation, those still holding need to assess the trade.

From a technical analysis standpoint, the stock has performed exactly as one would expect, hitting a triple bottom (pattern formed between November and February) at $520 on February 25 and promptly turning around and closing higher every day but two since then.

As such, we should expect the same might hold true and the stock might soon get checked as astute traders take profits from the current run.

We would hold still to maximize profits, but put in a very tight stop, maybe 5 points below current level and if the stock keeps moving up, adjust stop upward a point for every one point gain in the shares. While the shares might continue their upward march into next week or even beyond, we recommend exiting the trade by the close on Friday. Otherwise If the market is weak on Thursday, exit.

Tags: google, stock recommendation, Technical Analysis

The Technical Trader – Apple

Mar 7, 2010 Stock to watch, Technical Analysis, Trading Idea

Apple (AAPL) hit a new 52-week high of $219.70 on Friday, although the stock pulled back a bit, to close at $218.95. From the start of 2009, through October of that year, Apple’s stock was basically moving in a straight line upwards. Since mid October however, the shares have traded in a range, albeit a wide one, between $190 and $210, while briefly hitting a high if $215.55 on January 20.

With the move of $8.24 to $218.95, the stock finally broke above $215, which has proven to be a strong resistance area for the past two months and that could be a very bullish signal.

Should the markets look to head higher today and Apple is moving in tandem as well, we would look to buy the stock here. Of course, we would look to take early profits, as we still have a huge amount of volatility in the stock market.

If an entry opportunity is presented, we will follow through with this trade, so visit the blog often for updates.

Tags: apple, Technical Analysis

The Technical Trader – Ross Stores

Mar 4, 2010 Stock to watch, Stocks On The Move, Technical Analysis, Trading Idea

Apparel retailer Ross Stores (ROST) was a strong performer today, as retail stocks rallied on the back of strong February same store sales among the group.

Ross Stores - 03/04/2010

Ross Stores was up $1.61 to $51.06, a gain of 3.26%, with the stock hitting an intra-day high of $51.55, which also happens to be the new 52-week high for the stock.

The stock has closed higher in seven out of the last ten sessions, forming a very nice bullish pattern in the process.

We can start looking for a pullback pretty soon, but for now, we are banking on more upside. If the stock market is strong on Friday, go long Ross Stores up to $51.40. Once in, put an order to sell the stock at $53.61, which is about five percent higher than current levels.

Monitor the stock aggressively and exit if ROST is down a percent or more. If by Wednesday March 10, we have not hit our target, exit. If by Monday or Tuesday, the stock is up to $52.75 or higher, exit.

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Tags: ross stores, Technical Analysis, technical trader