Another low volume day.  Markets closed slightly lower.  I am tempted to interpret this low volume on small lower move as bullish, although I have the feeling that the market is playing it safe while it waits for a couple of the big movers and shakers to announce earnings this week.  A couple of the big banking stocks, C and JPM, as well as Merck are just some of the notable companies set to release results this week.  I know there are others, but these are the ones I know of off the top of my head.  As of right now, it’s tough to say what the market may do.  The S&P is nearing weak support at around 1320, with stronger support down at 1310.  So maybe it will hold. 

I would wait for an up move in any stocks that you are watching that moves past and stays above the previous day’s high.  Here are just a couple stocks from my watch list as well as a couple others that I saw recommended on another blog I came across.  I’m sorry, but I don’t remember which blog, otherwise I would give them the proper credit for several of them.

First off is AOC.  This stock is kind of smushed up against its 200 day moving average.  This MA seems to be acting as resistance.  I am still anticipating a slight pull back before this stock moves on to higher highs, although it is also sitting on some long term support.  I just wanted to show this one, because if it does pull back slightly and then burst above the 200 day MA, it has the potential of going up $6 of $7 to $50.  And if it pulls back a little like I am expecting, this move could be relatively quick, like in just a couple of weeks.

Next stock, just going alphabetically, is CXO.  I pointed this one out in my last blog, and I have come to like the longer term investment type potential this stock possesses.  I have actually been limping into this stock over the past week or so, so I am putting my money where my mouth is on this one.  What makes me really like this stock are a couple of things.  First off, the overall trend is up, even in a down market.  Second, it is a steady trend, which isn’t ideal for trading, but from many charts that I have seen, where the price is moving in such a way, this lack of volatile swing/retracement type movements seems to bolster the long term movement of the stock.   Stocks with this type of chart just seem to not get as worn out during a move.  Finally, if you look back even over the past 1-2 weeks, while the overall market has been in a kind of limbo, this stock continues its steady rise.  Even on Fridays big down move, this stock made a profit.  And on average volume. I am looking for this stock to go sideways over the next couple of days, because it has shown a history of not getting over extended from its MA.

Next I’ll show a chart for EGOV.  This is setting up an ideal retracement type, almost a bullish flag pattern, that is just doing a little consolidation before a possible move up to 8 dollars.  The down move has been on decreasing volume compared to the upward move.  And just before this, it had successfully broken out of an inverted head and shoulders patter (left shoulder on 2/11, head in early March, right shoulder in mid march).  It is right near support at about $6.85, so if it is going to bounce, I would anticipate it being relatively soon.  My only concern is the distance it has pulled back.  Because of this I am not entering until it makes that first breakout.

Just a couple other stocks that I found from this other blog, CSR, JASO, SOLF, and XIDE.  I especially like JASO and XIDE out of these three stocks.  JASO had a nice breakout move yesterday on good volume.  Everything about this chart is bullish right now.  And that move yesterday is the type of move I am looking for in other stocks such as EGOV.  XIDE, on the other hand is starting to give some bearish signals.  I’ll show this final chart just to point them out.  This three month chart starts right where the uptrend for this stock began.  It is starting to give signals that this up trend is coming to a close.  Mainly, I am looking at the MACD.  There is a bearish divergence in the MACD.  This is when the stock moves to a new high (on 3/26), recovers, then moves to a higher high (on 4/7).  At the same time, the MACD makes lower highs that coincide with these peaks.  This is a sign that momentum is starting to shift in the stock.  Also, this stock recovered to support at the same level that the last drawback fell to.  Do I smell possible head and shoulders forming up here?  This is pure speculation right now, and I do not recommend entering this stock on the down side until some of these suspicions are confirmed.  Confirmation, like always is key, otherwise your trading becomes more like gambling, and you will just end up hurting yourself in the long run.

Happy Trading

-Dylan