Nothing But Stocks

• Posted by Joe Fahmy
• on December 27th, 2009

I'm going to keep the Market Commentary brief because I have many stocks to cover. I mentioned in last weekend's blog (click here to read) that the market would breakout to the upside over the next 3-6 weeks. Last week, this upside move began with a +3.3% gain on the NASDAQ Composite. Of course, the market will back and fill along the way; however I feel there is more upside coming and here are some stocks to focus on:

1) $AAPL: I mentioned Apple on Friday 12/18 at $193 and highlighted it in my blog last weekend. I felt this was a low-risk "pocket-pivot" entry point or "cheat area" and I expected it to run to 220 or higher into its January earnings release. If you entered the stock then, you would be up +16 points in less than 5 trading days! If the market corrects/pauses this week, AAPL could build a handle. If the market continues higher, AAPL could run and build a high-handle.

2) Other Big Caps: I tweeted last week that $GOOG was breaking $600 and could make a quick run to $620, $ISRG would break $300 and run, $AMZN was bouncing nicely off the first test of its 10-week (and it gained over $10), and how strong $PCLN was acting. Although $BIDU has been weak recently, I would not bet against it and I expect it to continue its recovery. Bottom line: If you have a good entry point on any of these stocks, be patient as I feel there is more upside coming. If you missed these stocks, look to enter them on pullbacks to logical support areas.

3) Internet Security: I highly recommend having some exposure to this group as it continues to act very well. $ARST (building a base and setting up for a possible breakout soon), $FIRE $RAX $BCSI (a little extended short-term, but great longer-term holds), $FTNT (a recent IPO that I mentioned at $17.9 on Wednesday, could breakout soon).

4) $GMCR: I tweeted about the decent entry on GMCR last Tuesday at $69.6. Again, an instant $3 profit! It's back above its 50-day and forming a possible double-bottom base on its Weekly chart. Shorts just don't want to give up on this stock and, in my humble opinion, they are dead wrong! The 35% short interest will fuel this stock higher over the near-term.

5) $CML: This stock is up almost +9% since my mention last Friday! I also highlighted it in my blog last weekend. I CAN'T STRESS ENOUGH THE IMPORTANCE OF LOW-RISK ENTRY POINTS!!! If you can enter some of these stocks at the "proper" time, it enables you to sit through minor pullbacks (which is just normal price action, but might shakeout someone who buys the stock late). I still feel that CML has decent upside over the next 6-12 months.

6) China water stocks: $TRIT is up +12% since I mentioned the entry point near its 50-day on Tuesday at $19. $RINO is up +6.5% since I entered it last Monday afternoon. Still waiting for a decent re-entry point on $HEAT.

7) $LULU: It's 46% short interest was highlighted in last week's blog. This helped fuel a +10% breakout this past week out of its "flat" base.

8) The "three-weeks-tight" pattern is a powerful formation I look for because it shows that a stock is under accumulation. Last weekend, I highlighted this pattern in $HGSI and it gained over +9.2% last week! Some stocks that could possibly breakout of this pattern this week include: $TRGT $IMAX $GOLD $GPRE.

9) The following stocks look like they are building the right-side of their bases and are worth watching: $SWI $CERN $HOGS $GGB $VIT (strong volume last week for a holiday-shortened week) $VPRT (45% of its float is short).

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, AMZN, ARST, BCSI, BIDU, CERN, CML, FIRE, FTNT, GGB, GMCR, GOLD, GOOG, GPRE, HEAT, HGSI, HOGS, IMAX, ISRG, LULU, PCLN, RAX, RINO, SWI, TRGT, TRIT, VIT, VPRT

blog comments powered by Disqus