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21 Mar

Wednesday March 21, 2012

by

Good Morning!

Most Asian markets fell overnight on continued worries about China’s economic growth. Europe is rising this morning led by banks, oil and pharmaceutical stocks. U.S. futures rose steadily overnight and continue to climb this morning. On the economic calendar existing home sales data for February will be released at 10 a.m. EST.

Important Updates

Friday March 30th is my last day on Profitly – your membership to the new site will be ready on March 28th

Create a temporary username / password here for chat http://chat.thestockmarketwatch.com/chat7/stockchat.aspx

We have a webinar Thursday at 9 p.m. EST and I plan to try a new software

Open Trades

HL – 5,000 shares at $4.59 (current $4.62) swing long. I’ll add size at some point with a goal of $1 per share profit into the $6’s.

LYSCF – 20,000 shares at $1.30 (current $1.21) swing long. I won’t be shy to add size and plan to hold this one for the $1.70’s.

PCX – 6,000 shares at $6.72 (current $6.96) swing long. Should be smooth sailing to $8 from here and it’s possible this heads higher.

PZZI – 10,000 shares at $4.64 (current $4.67) swing long. Higher lows is a good sign so far, I like this trade back into the $5 to $7 range soon.

TVIX – 5,000 shares at $18.59 (current $15.08) swing long. Just waiting for the VIX to climb.

Understanding the Watch List

My watch list approach is to stalk three technical patterns; oversold, continuation and breakouts while researching for excellent catalysts. Every Monday I’ll introduce new swing trade ideas for that week. The target market cap is between $50 million and $2 billion with a Beta of 1 or higher priced between $.25 and $10. Daily liquidity of is a must so $500,000 or more for consideration. My goal is to bid support and sell strength making 5-10% profit per swing with a tight stop loss when the trade goes against me. The ‘Swing’ time frame is 1-4 day holds and the ‘Swing long’ time frame is 1-20 day holds. There’s also a Nano cap category called ‘Penny’ featuring a basket of companies with market caps below $50 million, these are not sorted by the three technical patterns. If I initiate a trade from my master watch of about 100 companies it’ll come to you by chat, text and email in real time.

1. Expand 2. Play 3. Select 720p for HD

Oversold – HOGS, CAST, HUSA, HDY, NSU

Wednesday – HOGS candle over candle is working off the $8.11 bottom, in today’s bullish market a move to $9 or more is reasonable. CAST confirmed Tuesday as well over the $4.38 low and should test $5 today before settling around $4.90. HUSA gave too much back to begin with Monday and another 4% Tuesday so no trade for me anymore because there will be sellers just ahead now. HDY does not look like this week will bring the move into the gap but if it holds $1.29 today I might test my entry as that would be the 4th higher low since the gap down. NSU textbook bottom bounce and I think it could test $3.75 today but no play now with earnings after today’s close.

Tuesday – HOGS saw some buyers return today after it gaped down at the open, the new low to work off of here is $8.11 so if we get candle over candle Tuesday morning don’t be shocked if I move on this swing for $1 per share, they’ll probably be some shorts looking to get out but watch out for big sellers moving into strength if it does continue, added caution in a bear market. CAST candle over candle is in but the problem was the open which saw shares move from $4.45 to $4.71 in the first 10 minutes before it drifted lower and closed strong, I was honestly hoping to see it drift lower first to increase the trading range between the price and resistance at $4.92, I’m watching close but probably won’t enter based on risk reward. HUSA retraced about 10% which is to be expected after Friday’s squeeze off the bottom, now we watch for it to creep up and if it does candle over candle entry applies with Monday’s low at $6.30 acting as the stop, overall I was hoping to see it hold the high $6’s to illustrate strength. HDY would you please just move into the gap for crying out loud, tomorrow watch for a creeping action around $1.45 to suggest it wants to test $1.52 resistance this week and run into the gap, something tells me this trades above $1.52 this week so I’m watching close. NSU is textbook candle over candle but volume dried up today after the initial squeeze, let’s see what tomorrow brings because earnings are Wednesday after the close so maybe $3.75 to $4 before the call.

Monday – HOGS selling volume is slowing, but in a bear market this could still wash again, right now watch $8.27 for support. CAST should find support soon, right now $4.38 is the number we’re going to work with and assess daily. HUSA is a great example of why I put this list out, we were in this trade last week but got out because I feared another pull, which it did before jumped 30% Friday… it’s on the list because it’s still oversold and could head up another $1 to $2 per share from here before resistance. HDY into the gap could be coming soon, watch $1.52 resistance and volume for your trigger but this would only be a swing given all the bad news out of the company lately. NSU is a great chart off bottom, the low to watch is $3.21 and if that sticks a move to $3.75 or even $4.35 is possible.

Continuation – HERO, PWER, RENN, LOCM, XIDE

Wednesday – HERO should break $5.22 today and if it closes above that level I believe a breakout at $5.60 could happen by Friday provided the overall market remains bullish which appears to be the case right now. PWER retraced a little but snapped right back to hold the upper range of Friday’s move, watch for a $4.75 break today with a stop below Tuesday’s low of $4.51. RENN‘s CEO was featured on CNBC Tuesday night and the stock moved up after hours but pulled a bit before the 8 p.m. EST close, I think a move to $6 this week is possible after which I do believe shares will hit $7 once Facebook’s IPO dominates the media again, this tight consolidation pattern might break today, close watch. LOCM continues to hold the 50 Moving Average so key $2.70 to $2.80 for the $3.20 move, stop below the 20 Moving Average of $2.54. XIDE is rejecting a move into the gap and if it doesn’t break into there soon I’d expect a profit taking dip to at least $3, possibly triple bottom at $2.68.

Tuesday – HERO trended lower across the day on sizable volume, if it holds above $5 or the 20 Moving Average watch for buyers on the bid and if they line up a move to $5.60 might be in store this week, this week or next though watch HERO to $6.50 soon, I think this pattern is leading to a breakout at $5.60 if the market stays strong. PWER didn’t do anything today so you’ll be shocked to here me say that’s great but it is, consider Friday’s big move and it held range today leads me to believe it could pop out of this pattern to $5.30 later in the week, I’d feel even better if it held above the 50 Moving Average but that’s a real tight stop and probably not reasonable for this trade. RENN is a trade I’ll be in soon and I’m watching daily to position with size on the bid, right now I continue to think just above $5 is where I want it swing long to $7. LOCM above the 50 Moving Average is key which is currently $2.61, hold that curl and if $2.79 falls I’m fairly confident $3.20 resistance will be tested. XIDE really looks like a big candle could develop this week so watch it close, the bid will be the tell here just before it goes so knowing your level II goes a long way and mark $3.23 as your gap down resistance.

Monday – HERO worked out of consolidation Friday and should be heading to $5.60 at which point it’s a possible breakout. PWER on the curl looks great with resistance at $5.30 and $6, support at $4.47. RENN is one of my better catalyst based plays right now, I figure buyout speculation and Facebook’s IPO could send shares to $7 again soon so keep it on watch, especially given their last round of solid earnings. LOCM is one of my favorite swing trades and I’ve neglected to work it recently off the $2.11 low back in January, this curl toward $2.80 makes me believe a move to $3.20 or even $4 is coming soon. XIDE is pushing into the gap and a break of $3.15 could lead to a solid swing move.

Breakout – BPZ, PWAV, REE, DVR, COCO

Wednesday – BPZ pulled a little Tuesday with the bears but held above $4 so it’s still in play but if volume doesn’t increase today resistance new resistance at $4.24 could slow a breakout. PWAV I pegged for a breakout last week Friday but my timing was off, Tuesday the price bounced off $1.72 so there is support at the 50 Moving Average which might make today a good time to test this one out, $2.05 resistance is the breakout key. REE continues to hold above $6 and if volume increases today I’d expect a move to $7 soon. DVR pulled 5% Tuesday which is typical for breakout pending plays when the market is down, that said no play for me here now but I would not be shocked if is snapped back today and tested $3.60’s. COCO still looks good especially if it recovers today so I’m watching it close for a move into the $5’s.

Tuesday – BPZ is itching to burst but the only question is will it have enough juice to sustain a move around $4.50 if it gets there, pattern is still in play and I think tomorrow will be the test, key volume near the high of day on a 5 day 1 minute chart as always on breakouts. PWAV is holding range and if it trades between $1.70 and $2.05 I’ll keep watching close for that monster move I think it’s capable of making up to $3 or $4. REE rejecting resistance around $6.50 and while I won’t play this one because I already have my rare earth play with LYSCF, I do believe it could trade around $8 and possibly higher swing long if China continues to cause problems here. DVR just keeps creeping higher and while I don’t trust this stock it wouldn’t stop me from trying to bag a quick 5 to 10% if it starts to breakout because there is no resistance until $5, light volume Monday suggests a pull in a bear market so tight stops on all breakout pending plays. COCO is one I moved on today in the day trade room but it didn’t quite take off, however I think tomorrow will be the day so I’m watching close as not only a swing to $5.20 but a solid day trade as well.

Monday – BPZ solid chart suggesting it wants the upper $4’s. PWAV sure looks like a move to $3 or even $4 is right around the corner. REE is a rare earth play for those who could not get in LYSCF, I think the China situation could take this to $8 or even $10 swing long. DVR just continues to sit in this uptrend but one of these days it’s going to jump and hold 20% and my guess is sooner than later, with clear skies to $5 you’d be wise to keep this one on watch. COCO must have some huge bids behind it and this pattern here suggest a move to at least $5.20 is coming.

Penny – LEE, PEIX, GSX, PLUG, MCZ

Wednesday – LEE only did 85,761 in volume Tuesday so it’s just on watch for now but when the bulls return I’ll probably swing it because this is popular stock that goes in cycles. PEIX continues to hold above $1.10 but yesterday’s 3% pull leads me to believe a move to $1.30’s might be wishful thinking this week. GSX pulled form the breakout and this is a good example of what happens to a breakout pending stock when the markets pull, no play for me here obviously but it did snap back nicely off bottom. PLUG is drifting lower as expected, target bid remains $1.50 to $1.35. MCZ ‘Oh baby you, you got what I need…’ darn I should not have been so stubborn last week at $.54 but oh well, nice to see this one confirm from the watch list in our desired time, I think this could see $1 again but clearly $.62 resistance is putting up a fight so sideways for a few days while it consolidates and moves up again is what I’d expect.

Tuesday – LEE tight accumulation continues here so watch for volume and a move to $1.27 and probably this week. PEIX continues to hold range but the more I look at it the more I think the recent move on huge volume will create a lot of resistance should it pop, on watch but probably not trade for me. GSX was the watch list winner up 14% at the close, see if it breaks $.38 and the door is open to the mid $.40’s. PLUG had no buyers today which says it’ll likely head lower in a bear market meaning this probably isn’t the bottom yet so $1.50 is my new target to bid, maybe even double bottom at $1.35 depending on how it washes out of this pattern when the overall market is down and the bears are roaming. MCZ nice move to $.62 but it couldn’t hold the run up about 20% from the recent low, $.62 is key resistance now and no trade for me since I was hoping for a $.50 bid, however I still like it to $1 swing long so I’m watching daily for my ideal entry since it’s a light volume play.

Monday – LEE talk about a consolidation pattern, NEOM’s intraday chart looked the same as LEE’s daily, a move to $1.20’s would test short term resistance and if it can climb then $1.73 would be a huge profit. PEIX moves in waves and it sure looks like another wave to $1.30’s or even $1.50’s is coming. GSX is not my favorite chart but if $.33 to $.37 goes it could see the mid $.40’s which would be a nice score from here. PLUG is a decent nano cap with some big clients, not saying I’d buy right here but watch close for a curl off that $1.70 bottom. MCZ I won’t chase because I want it closer to $.50 but the pattern is curling here and could pop to the $.60’s soon.

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2 Comments

  1. Randy Key

    Im in GSX at .31. Do I hold for .38-40 or sell at market?

    Reply
    • Jason Bond

      Hi Randy I can’t give financial advice sorry, rules are rules. Look at the chart I’d think it should bounce back up today personally, market conditions and all.

      Reply

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