Thursday, February 17, 2011

Watchers for the 2-18-11 trading session

KV.A and KV.B

Stubborn Supernovae that essentially had a red day Tuesday. It then advanced the next day, and now again it is making new highs in the run up on ever lessening volume. This should be a good sign that some distribution awaits, hopefully without whipsawing. A fade entry on confirmed weakness cues and heavy volume dumping from or near the bell. Keep flat on early strength/greening or consistently strong price action, like trading above the opening price level. Avoid all big gaps. Ideally this opens flat or barely up or down and moves south on volume to fade into. Afternoon fades like today's one on HNHI are the highest odds plays to take.


After an initial red day a few days ago, this gave every sign of having more gravy, then it zoomed today. Since this is up entirely too much, something has to give. However, it sported big volume again today, and is technically treatable like a maturing Supernovae scan return in effect, not a first red day one. Keep in mind this is earnings related, so that explains much and highlights the risks you take in trying to fade this. Since the volume has returned, this might be scalped up on spiking up from or near the bell. So, it might not be done, so box and drop if you are concerned about share availability. Easiest is a flat or barely up or down open and immediate moves south to fade into. Or morning panic dumping to scalp short into. Avoid big gaps as usual, and do not try to top fish the fade, let it come to you.


Supernovae scan return. First red day. Finished red by nearly 15% last time, so more down side might not be too realistic. If it had fallen less than 10% more could be expected as plausible. Always watch day 2ish of a busted one. The plan is to play for more reddening on day 2ish. Conditional entry. A flat, nominally green or red open that immediately sells off on heavy volume or sports traditional confirmed weakness cues is a fade entry. Keep flat on high volume greening or strength, especially early. This is more likely given the high degree of redness today. Avoid entries as a short on big gaps up or down, but down is probably worse. Keep flat on consistently strong price action, like trading above the opening price level.


News blurb propelled this loser up over 42% today. I expect more, likely early, Friday. Possible long scalp on spiking up at or near the gun. Possible long on consistently strong price action, like prices consistently printing above the opening price level. That is most likely on a modest gap up or flat open. If nominally red and it perks up off of that and goes green, that is a long, but I trust that less here. Keep flat on weakness.


This play strongly resembles LZB of today. See my comments for playing that, they mostly apply here on these new 52's. Up a bit after hours. This often leads to an immediate gap fill sell off, then a reversal for a long on red to green. Great volume, and no run up into earnings. Best play was today, but this is a milk it scenario.


Another street estimate beater, and a former IBD top stock before a falling out happened, this resembles LZB and IO above. See my analysis for them, it mostly applies here. Surprise usually means more buyers come. Sometimes it does not work the very next day, but normally in the coming days and weeks it moves higher. This reached new 52's as well. As these picks are day trades, you only buy this into our typical scenarios.


No obvious catalyst. Rumors? Not sure, but the volume and move today was stellar. Possible late arriving gamblers spike this up at or near the gun for a long scalp. More modest moves above the opening price level sustained is a long But it is already up after hours, so maybe a fast dump on heavy volume is the response once they get spooked. Short scalp on such morning panic like moves. Also a fade on typical confirmed weakness cues. That would arise if it opens slightly up or flat and falls red more evenly but with conviction. Usually when rumors drive a stock it fails soon after, so I am more secure if it wounds Friday. Still, this is one of those live price action situations where you will not know until the opening bell which fence to sit on.

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