If we really in the range bound market, we will continue see the choppy and volatile (slowly toward to less volatile)trading sessions in the following weeks. The momentum of the market is going to diminish, and markets start trading based on the news/economic data. The FED has been trying to cure the recession with interest cut, the market starts to asking “then what?” I don’t want to advocate any Recession Vs. Inflation talks here, but if you could use a little bit of your critical thinking skills, you might realize what you should do, regardless the credit crisis, the burst of housing bubble, or high flying oil price, the money is yours, use it wisely, especially when it is worth less and lesser…
This week, I have 6 stocks here, 3 for longs, 3 for shorts, I like to react rather than bet.
SHORTS:
1. RS: Shorting this Steel and Aluminum might be very dangerous at this time, so check the news before you short the stock. Based on the chart, it seems like a good short opportunity to me, a conservative target is around 46, stop at 51. As long as the VWAP could act as resistance, it would a good opportunity to enter.
2. AZZ: The near resistance is around 36, the stock is only for short-term trading, as if the price move above 36, it might be a good long.
3. UTX: The support is around 70, if the price break the 70$ level, it might be a good short. Keep it tight, watch out for the news.
All the shorts are prepared for the possible bear markets in the coming week, be discipline. If the timing is right, I will buy some put options, to ride the downtrend and control the risks.
LONGS
4. ALL: The support is around 45.30, if the price break down the support level it might be a dangerous sign for long, but if the price can hold above it, the first target will be around 50.
5. CAG: The resistance is around 22, with the big price movement on Friday, I would expect the 22 level could be broken this week. Keep it tight, and watch closely.
6. ED: I like this chart, the candle indicates a trend reversal, the MACD indicates a bullish divergence. Target is around 45.
