Weekend Update 3/25/07 - Technical Analyses
High Beta Momentum Stocks - New Trade Set Ups for - AXR, MVIS, & CEGE
In this Update I will talk about New Trade Set Ups for the upcoming week. The new Trades are in High Beta Momentum Stocks. They are now poised for fast and furious gains. These stocks are volatile and riskier than other Trending123.com portfolio stocks. If you are adverse to volatility and it causes you to buy high and sell low avoid these setups. These stocks are also heavily shorted and near all time high levels of short interest. The stocks are AXR, MVIX and CEGE. They are holding their respective lows, the selling pressure has dried up and there is no over lapping. They are on the verge of breaking out just like GROW did last week! When AXR, MVIS and CEGE breakout, the shorts will be covering like there is no tomorrow causing extreme upwards buying pressure! Now just remember this while you read this update there are bulls, bears and pros in the stock market. Which one do you want to be? Ok, now let's look at the technical's and the charts for these stocks.
Please click on the trading journal link provided for you below, in order to print out your trading journal sheet if you need a new one. This is the first step that you need to follow on your path to achieving "sudden profits." This is what is called doing your technical analysis homework on an equity before you enter a trade. Remember that a good trader is disciplined and always plans their trades , and so should you. A failure to plan is a plan for failure! Using this journal is a great way to learn how to trade with a trading journal! This way, you can update your trading journal as you read and listen to the updates on these stocks. Jotting down notes will help you learn what is important to look at in the technical analysis of each chart. You can also refer back to your notes to see why you entered the trade, the issues you had will holding the stock as you waited for it to reach price target, and why you exited the stock, and whether you made a profit or a loss. This enables you to identify your trading strengths and weaknesses. The time spent doing this, will help you eliminate your weaknesses in order to become a good trader. Old habits die hard. On the other hand, Knowledge is Power. We want to encourage you to get rid of those weakness so that you can become an even more profitable trader.
Please Note: This is not a requirement that you do this. There won't be a test or anything like that. (lol) It is just a suggestion, we do believe that this is a helpful tool for our subscribers to use. We provide it for you for your convenience. The decision is left up to you. The original Trading journal log sheet: http://trending123.com/short-term-trades/trading_journal.htm
Amrep Corp. (AXR) - Daily Chart- Financial Sector - in a Bullish Continuation Wedge - Not Optionable
The daily chart illustrates that AXR has been trading in an impulse wave 3 to wave 4 zig zag down pattern that contains the lettered corrective waves ABCDE that constitute the wedge. On the chart you can see that the impulse waves 3 and 4 have not overlapped the impulse waves 1 and 2. This lack of overlapping is bullish and a sign that a bottom is being put in. In addition, you can see that the short interest is currently at all time highs, and this short interest is increasing on declining volume!
For example on Friday only 36,000 shares traded. That is extremely light volume compared to an average daily volume of 250,000 shares. Selling pressure has dried up. A top cannot be in AXR yet because there are too many shorts in the stocks now. Buying pressure typically begins to come into a stock when it is heavily shorted such as AXR is. When there are too many shorts in a stock it can cause a stock to reverse upwards as stop losses on short positions are triggered by relatively light buying pressure. You can see sneaky buying pressure coming into AXR now. This can be seen in bullish divergence that is appearing in the RSI,PPO and Stochastics. If you liked the gains in GROW you will like the gains in AXCR once it breaks out of the wedge. AXR is a higher risk investor trade meaning that it is meant to be held for 6 to 12 months or until price target is reached. It has a price target of 100.00. AXR is a buy at current levels. Set your hard stop just below impulse wave 1 at around $72.75. Do not exceed the 5% allocation rule per set up.
Cell Genesys, Inc. (CEGE) - Monthly Chart - Massive Falling Wedge Reversal - Biotechnology sector - Optionable
You must think I am just nutso because I am looking at a biotechnology stock. If you look at the short interest it is at all time highs, which will eventually cause a nice short squeeze. But let me tell you this, you can double your money just trading the range that the stock is in within the wedge. I just want to trade the middle. This is nice and easy. This is a liquid stock. I am just looking to buy the bottom of the wedge at $3.00 and trade the middle of the channel up to $6.00 and make 100% gains just by trading the wedge. This is how a professional trades. What type of trader do you want to be? This set up has a nice low risk to high reward ratio. CEGE is a higher risk investor trade meaning that it is meant to be held for 6 to 12 months or until price target is reached. Entry is at current levels around $3.00. Price target is $6.00. Set your stop $2.56 that is the level, that is where it will overlap and the pattern fails. Do not exceed the 5% allocation rule per set up.
Microvision Inc. - (MVIS) - Monthly Chart - Massive Falling Wedge Reversal - Diversified Electronics - Optionable
I updated MVIS at the beginning of the year as a possible long term investor play. I think that Electronics will be a good sector this year. I have been pointing out other electronic stocks such as VSEA, and Brooks Automation. I want to get people into stocks such as these. MVIS has a lot of volume preceding price, and you can see massive volume coming in here. This is bullish. There is also massive bullish divergence in the PPO. Just Massive. There is massive buying pressure by the BIG money coming into MVIS. It has consolidated on light volume to form a nice bullish bull flag. This set up has a nice low risk to high reward ratio. MVIS is a higher risk investor trade meaning that it is meant to be held for 6 to 12 months or until price target is reached. Entry is at current levels around $3.00. Price target is $10.00, which is a triple from current levels. Set your stop $2.64 6 that is the level, that is where it will overlap and the pattern fails. Do not exceed the 5% allocation rule per set up.
I want say this, no position should ever exceed the strict 5% allocation rule that we have at Trending123.com. Exceeding this allotment is DUMB! If you over leverage your positions beyond the 5% allocation, you will expose yourself to higher risk. You will be more likely to get stopped out of your position because a dip will leave you vulnerable to dips. Then you will end up selling the lows instead of the highs. This will it adversely affect your trading efforts and your psyche and consequently lower your portfolio gains.
Edited by :Andrea Victoria Friend aka Daisy
Editorial Assistant for Trending123.com
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