Monday, February 23, 2009

Taking Stock: Trading Possibilities

I was also looking at CE Franklin (CFK) to make some trades. If it bounces off of the 20DMA, then I'll have two data points for both support and resistance on the uptrend. That would allow me to trade it in a channel.

I'm not sure about Compass Minerals (CMP) yet. As Dan Fitzpatrick says, "Don't be the first one out of the foxhole". It needs to start to bounce before I can put in a limit order and a trailing stop loss order. It looks as though $65 is the resistance level for Compass Minerals (CMP).

I am happy to see that DryShips (DRYS) could finally be starting to move higher again. I'm not sure of the proper name for it, but there is an overall long-term trend line that was serving as a severe level of resistance, and DryShips has broken through it. I also read a message board for DryShips, and I have noticed that quite a few other people have lost a substantial amount of money. It seems to be a common theme.

Jim Cramer was recommending Axsys Technologies (AXYS) not long ago. That's funny, because I was considering shorting it, considering that it is is a well-defined downtrend.

There's an article about the DJIA possibly being overhauled.

The DJIA broke another level of support last week. So far, at least from an empirical perspective, it doesn't seem to be a broad-based sell-off. It just seems as though positions are pulling back to the most recent support level. That is part of the reason why I am interested in the overhaul of the DJIA. I was somewhat shocked to read that GE is down to single digits, but I have heard that it is being grouped along with the financials. It is a similar situation to Wells Fargo (WFC), which is getting dragged down because it is in the index along with other financials. Wells Fargo is actually one of the better banks right now, because they did not participate in the sub-prime "give a loan to anybody that wants one" frenzy. Yet, since their stock is grouped along with the stock of bad banks, it will be dragged down along with them.

On that note, there is a good playlist of videos to watch on the credit crisis.

Since the broad market has broken support, I'll put in some stop loss orders for the previous support levels of stocks that I own. Once support is breached like that, then who knows how much lower it will go.

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