Steckler's Star Studded Stock Picks

[skiracer]

Mystiky, symmetrical triangles are consolidation patterns, not continuation patterns. It's a largely unpredictable pattern that can break out either way. That's why we need to wait and watch to see if a symmetrical triangle forms.

Webs, you wanna run with the big dogs, ya gotta pee on the big trees. Chart pattern analysis is the basic underpinning of TA; a good technician can make a respectable educated guess about the future direction of a stock based solely on the chart pattern and volume, without using any technical indicators. If you're not comfortable with chart patterns, you're guessing as to what comes next. MOO, of course!

Dave,
You are without a doubt one of the most authorative, condescending,tactless people I have never met. Without even knowing them I can appreciate why some of those people over at the AOL boards may have acted the way they did towards you. I have been reading your posts over these last couple of weeks and I must say you are definitely up there with the best in those catagories. You should really try an express some subtle tact in your approach to giving advice or trying to be helpful. I'm trying to believe that you are sincere in your responses but personally I find them somewhat grating in the manner you present them to others.
I held my tongue on your exit from GOOG the other day figuring that it's your money and you can do what you want with it but in all sincerity that was as big a bush league play as I have seen. Any trader in that position, with that much money on the line, should have let the winner run and protected his position with a well placed stop. Your answer to me was that what if it had dropped to $370 would I have been saying that then, well any protective stop below $399 would have taken away any of the risk and put the position in a win win situation to pick up another 20/30 points.

[Websman]

Ok...I'm going to let you in on a bit of my trading strategy.


Most of you guys use either TA or FA. I however use VA.

What is VA? This is the purest and most simple form of analysis you could ever imagine. Ir's based on pure Vulcan logic. It is deceptively simple, yet so difficult for humans to master.

[DSteckler]

Two to watch on Friday

BOOM - most traders are familiar with this one. Great ERG which = 282. Has traded in a tight rectangular base for two weeks with daily technical indicators strengthening again.

NWRE - beautiful rising trend channel that bounced off the 20-day EMA just a few days ago. ERG is a strong 275 and earnings estimates the next two quarters are up 53.85% and 30.77% respectively, YOY.

[Lyehopper]

Dudes...Is this stock trading or Algebra???

No DUDE triangles!!!!.... it's Trigonometry.... Pythagoras would have surely been a daytrader is he were around today.

[New-born baby]

How would you do it?

BOOM - most traders are familiar with this one. Great ERG which = 282. Has traded in a tight rectangular base for two weeks with daily technical indicators strengthening again.

NWRE - beautiful rising trend channel that bounced off the 20-day EMA just a few days ago. ERG is a strong 275 and earnings estimates the next two quarters are up 53.85% and 30.77% respectively, YOY.

Dave,
How would you play these? I just scanned both their daily and weekly charts, and without a doubt they are booming. I see Boom's rectangular base on the daily. Would you wait for a break above the top of the rectangle, or enter at the base?

And how would you play NWRE?

Lastly, ERG: please tell me what that stands for.

Thank you!

[DSteckler]

ERG is a combination score of EPS Rank, RS Rank and Group Strength Rank. So if all three scores equaled 90, the ERG = 270. You can't tell just from the ERG alone what each indivdual rank is but if the ERG rank is high, it's safe to assume that each of the three components have high ranks.

To play BOOM I'd wait for it to clear the rectangle resistance line, say through 36. Should it gap open much above 36.50, I'd wait for a pullback.

For NWRE I'd wait for it to pull back again to the 20-day EMA. That MA seems to act as pretty strong support. NWRE is a little more extended off its 200DMA than BOOM so IMO it's smarter to buy it on a pullback rather than on a breakout.

[New-born baby]

Thanks Dave

ERG is a combination score of EPS Rank, RS Rank and Group Strength Rank. So if all three scores equaled 90, the ERG = 270. You can't tell just from the ERG alone what each indivdual rank is but if the ERG rank is high, it's safe to assume that each of the three components have high ranks.

To play BOOM I'd wait for it to clear the rectangle resistance line, say through 36. Should it gap open much above 36.50, I'd wait for a pullback.

For NWRE I'd wait for it to pull back again to the 20-day EMA. That MA seems to act as pretty strong support. NWRE is a little more extended off its 200DMA than BOOM so IMO it's smarter to buy it on a pullback rather than on a breakout.

Thanks, Dave. Just love your posts and picks. You are a help!
I notice you like to look at the ADX. Is there any one thing that you look for in the ADX as a buy signal? Or maybe you wouldn't mind posting about what you consider to be a buy signal? I'd appreciate anything.

[DSteckler]

ADX is a really neat analytical tool.

The ADX indicator, developed by J. Welles Wilder, measures the strength of a trend but not the direction. The index uses a scale between zero and one hundred to rate the “trendiness” of a stock or commodity.

The ADX identifies whether the stock or commodity is moving directionally. However, it does not reveal what direction the stock is trending, only that it is trending. The stronger the trend, the higher the ADX value. A rising ADX value suggests that the present trend is gaining strength and the trend will continue, while a falling ADX value suggests the present trend is losing strength. A common interpretation of this indicator is that a stock or commodity is trending when the ADX passes through 30 and is rising.

The longer a stock trades in a narrow consolidation (congestion) range, the less trending motion it exhibits during the lookback period. Just as a strengthening trend is measured by an increasing ADX value, a weakening trend is measured by a decreasing ADX value. Backtesting revealed that when the ADX falls below 20, and particularly below 15, the stock has “non-trended too long” and is likely to soon break out of its trading range and initiate a new trend.

I look for stocks that have been “non-trending too long.” The longer and narrower the consolidation range, the lower the stock’s ADX value and the greater the likelihood that when a breakout comes, it will come hard and fast. Which direction this breakout takes and whether it leads to the start of a new trend requires the use of additional chart pattern interpretation and/or technical indicators.

When the ADX is above 30 and rising, I like to use trending indicators like MAs and MACD to keep me on the "right" side of a trade. When the ADX is below 25 and falling, I prefer to use oscillating (non-trending) indicators instead.

[New-born baby]

Thanks Dave

Thanks Dave. I'll be looking for all you posts, and watching especially when you mention the ADX so I can learn more about how you use it.

[DSteckler]

NBB, do you have access to back copies of TASC magazine? They've run some great articles on how to interpret and use ADX.

[DSteckler]

Cdis, Zigo

CDIS made a nice bounce off its 50DMA yesterday. Volume was heavy both on the downside and upside the past few days so it's anyone's guess as to what comes next. Up 3% today.

ZIGO may be a gap 'n crap. Opened up with a nice gap due to strong earnings but they started selling into it almost immediately.

[DSteckler]

MCX - a thinster

ADV of MCX is only 62,000 shares and a float of only 4.5 million shares.

EPS estimates for the next two quarters are up 667% (!) and 82.80% respectively, YOY. MCX is a deep sea shipper (Yo, Ho, Ho....) and has been trading in an ascending right triangle for about one month. The resistance tops sit right on the 50% Fib. retracement level, using the Dec. high and low as the measuring points.

The triangle is about 2.5 points high at its widest point so a breakout through 14.20 gives us a calculated target of 16.70.

[DSteckler]

BTUI suh-wheet

Who mentioned this one? Great call!

[DSteckler]

Housing index

Amazingly resilient, isn't it? HGX back above its 20-day EMA after pulling back to its 50DMA on Wednesday.

I tell you what...if housing really does crap out, the economy is going to circle the drain for sure.

[DSteckler]

Look at Mr. Softee!

Up almost 4% on a breakaway gap.