Observations so far this week

• Posted by Joe Fahmy
• on December 22nd, 2009

Let's review some positives and negatives so far this week:

Positive signs: The market continues to be resilient. The Big Caps are acting strong and many trading ideas are working out very well. Recent examples highlighted on this blog include $LULU +9.3% $HGSI +8.5% $CERN +4.9% $CML +3.8% $AAPL +2.5%. These are two-day gains!

Negative signs: The market rose Monday and Tuesday on lighter and lighter volume. Many China stocks are showing noticeable weakness and need time to setup again: $BIDU $HMIN $CTRP $CAGC $CAAS. The $VIX is making new lows, signaling some complacency among investors.

Conclusion: As I wrote this past weekend, I still feel the market will trend higher over the next 3-6 weeks; however, we will see some pullbacks along the way. If you are a swing-trader, my best advice is to lock in profits on stocks that might be short-term extended and look to buy them back near logical support areas such as their 20-day or 10-week moving averages. If you are a longer-term investor and you have decent entry points on your positions, try to stick with your winners and cut losses on your weaker or under-performing stocks.

Some ideas on my watch list:

1) If the market cooperates, we could see more upside momentum in: $FFIV $INFY $MELI $SLXP $ISRG $CTSH $SWM $EPAY $FIRE.

2) The following stocks are building the right side of their bases: $AAPL $CERN $ARST.

3) Miscellaneous ideas: $GOLD (finding support near its 50-day and 10-week), $GMCR (back above its 50-day, possible double bottom base on its Weekly chart, still highly shorted), $TRGT (possible pocket-pivot buy point above 22), $ASH (possible pocket-pivot above 40).

Please keep in mind that the purpose of this blog is to help people with idea generation. If you trade some of these stocks, PLEASE, PLEASE, PLEASE use stops. In other words, if some of these stocks turn against you and the market doesn’t cooperate…protect your portfolio! Thank you. Good luck trading!

Follow me on Twitter @jfahmy

Tickers: AAPL, ARST, ASH, BIDU, CAAS, CAGC, CERN, CML, CTRP, CTSH, EPAY, FFIV, FIRE, GMCR, GOLD, HGSI, HMIN, INFY, ISRG, LULU, MELI, SLXP, SWM, TRGT, VIX

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