Saturday, November 18, 2006

Watch List for Week of Nov 20

Bullish engulfing candles:
  • AEE - stock in an uptrend. The bullish engulfing pattern is at the support trendline. It's also a Piercing Line candle relative to the down candle on 11/15. MACD and Sto are low and curling up.
  • GIS - long-term uptrend. ADX above 25 on weekly chart. Stock trading near its all-time high. Stochastic showing bullish breakout signal. MACD is low and curling up. The bullish engulfing candle bounced off the 30-EMA with 150% volume. Bollinger bands are squeezing, and an upside breakout from the bands would mean closing at a new all-time high.
  • NTLI - stock in a 10% trading range. Bullish engulfing candle bounced off support around $24.10 with 300% volume. Possible bullish trade with quick exit (or sell half) around $27.
  • PDS - stock in downtrend (so warning). But, stock has shown two bullish engulfing patterns in a row at a major 2-year bottom, with the second engulfing pattern gapping up from the first pattern with 350% volume. MACD histogram just gave its bullish breakout signal, and Stochastics is about to. Even a move up to the 50-EMA would be a 10% rise. If the downtrend is over, the risk-to-reward is excellent. Even if not, could exit half (or all) of the position if the move reaches ~$27.30. A hesitation at $25.50 resistance would be a warning to get out fast.
Bearish engulfing candles:
  • EWBC - stock in short-term downtrend, intermediate-term 10% trading range. The downswing in Oct pushed ADX above 40, but after the more recent upward retracement, MACD and Stochastics are now both in the overbought zone. Bearish engulfing candle came with 120% volume. With ADX still above 25, and -DI over +DI, and the candle bouncing down from the 20-EMA, this seems to point toward a further move down. A close below $36 would be a new significant low.
  • LUV - stock in a downtrend. Bearish engulfing candle comes after what may be an exhaustion gap with a (somewhat) hanging man candle. Possible bounce off upper Bollinger band. Fibonacci retracement (from high on 10/13 to low on 11/03) shows the bearish engulfing candle bouncing off the 61.8% retracement level.
New 200-day highs with volume:
  • TKLC - uptrend, ADX above 40 and rising, +DI above 30 and rising. Made new high with more than 170% volume. If take the trade, stay in as long as the close stays above the 10-EMA.
  • MLHR - no clear trend, but the 13% up gap on 9/21 was a new-all-time high and it recently made another new all-time high. There was a recent breakout from a consolidation flag, which coincided with a breakout from the Bollinger bands, but with not much volume, and it looks to be coming back for a retest. ADX shows strength in both weekly and daily charts and is rising in both charts. If the flag pattern plays out, there should be a move to at least $39.50, based on the height of the flagpole.
  • ALV - recent upside breakout from a long trading range that ended with an ascending triangle. Appears to be coming back to test the $57.65 old resistance/new support level.


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