Best Stock Trading Ideas

 

I’ve always had fairly good instinct when it comes to stock trading.  People ask me if I am a fundamentalist or a chartist and I say I don’t favor one or the other.  It helps tremendously to learn about charting and price patterns and combining technical knowledge with fundamentals can’t hurt.  No one trading or investing strategy works for everyone.  It took me years (and still refining) even after I learned technical analysis to arrive at the trading rules I use for myself today and I am sure they will continue to evolve.  Since I am always watching the market looking for opportunities, especially for signs of sector rotation, and planning my next move, I thought why not share my ideas here.  So, here comes the first of my weekly stock trading blogs where I will share some stock trading ideas as well as the tools I use.  

Week of Jan 24, 2010    

If you were a bull going into last week, you probably understand how the Minnesota Vikings felt today.  It indeed was an ugly week.  I put on some tiny PUT positions to hedge my long positions middle of last week but still came out quite bruised on Friday.  What makes it feel worse is that the drop was driven more by government policies than earnings announcements, which have been fairly good so far.  We may get a dead-cat bounce this week but I think the best move this week will be to do nothing this week and just watch what unfolds.  Set stops for your long positions if you don’t have them in place. 

Bullish percents – one of my favorite market indicators – show all sectors moving into bear territory, with the exception of healthcare sector.  Commodities, Material, Energy, and Gold sectors have been already thrashed so I would not look to short there. 

Technology sector has been showing signs of fatigue after months and months of stellar move-up and have started descending even with several heavyweights announcing strong earnings last week.  I would look there for some shorting opportunities if you are looking to hedge.  A few I am watching are ORCL, XLNX, CHKP.  They have not been battered too badly yet and just testing their recent support line.  I also think SBUX (Startbucks) may be headed downward.  Its rival PEET started its descend a while back.