Stocks to watch for the January 17-20

First on my list is Bank of America, BAC.

The weekly chart is slow moving and normally late getting in and late getting out but it will eliminate the noise. Everything on this chart is screaming buy me right now but knowing that earnings will be reported1/19/2012 before the market opens will cause me to pause until Thursday morning. Do not worry catching the initial surge up because this stock has the potential to run to $15. That would still be close to a 100% return. Take a quick look at the daily chart because that has a few notes on it, but basically it is still a wait and see. I would not chase this until the report.

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Freeport McMoran, FCX is turning the corner for a new long term uptrend on the weekly chart. A long series of lower pivot highs was broken just just week. The turn officially started October 3, 2011 so this new swing has been a work in progress and is not a knee jerk. We also have 2 higher pivot lows for support. The level that was finally broken was $41.22 so we are just a few days behind. Looking at the daily chart we can use this to our advantage. We should wait to see if $41.22 holds, because Friday share price did turn down with the rest of the market. So we need price to do one of two things. Hold above $41.22 the drive through the last high of $42.69 and buy at $42.70 or above. Second we could watch price fall through $41.22, create a higher pivot low somewhere about $38 and then buy once that pivot low was created. You would not know price until the pivot was created. My guess would be between $38 and $41. FCX also pays a 2% dividend. Either this is a definite watch this week.

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Buy and Sell update.

Today I got bounced out of CVX, Chevron after holding it for 45 days. That is a long time for me and I was hoping that it would be a long term hold, but things just didn’t work out. First, $110 has been a major point of resistance since March 28, 2011. Yes, that is a long time and CVX ran back up to that point this week and bounced lower. Not a good sign. Then today the company announced that they expect earnings this year to fall 21%, so down she went. My stop loss order failed to fire at the correct level because the news hit before the market opened, so I got a lower price, but that’s ok, I made a 7% profit. Now looking at it from a technical stand point, 4 definite sell signals were fired this morning, so no regrets here. My green uptrend line was violated. Parabolic SAR did a cross and fired a sell signal. MACD and Chande Momentum Oscillator also fired.

KOG, Kodiak Oil & Gas I bought on 1/4/12 when it broke out above the Bull Flag. I set my stop loss just below my entry and got bounced out 1/9/12 for a 6% loss that hurt a bit. Today more damage was done in the stock in that price broke below the uptrend, PSAR fired a sell, Macd fired a sell on 1/9/12, and lastly the CMO is getting ready to cross below zero. One more important point is that price also broke below the last pivot low and with this many things screaming sell, I guess it was time to just watch this stock for another point of entry. If you own it, I would consider highly taking your profits and wait for another entry.

GE is starting to stall and I moved my stop loss in tight so I would not take a big loss in the position. The PSAR fired a sell two days ago and now the MACD fired a pink down arrow sell and the MACD lines are squeezed tightly together. The uptrend is still holding and price has not violated anything yet, but even price looks to be stalling. The CMO is starting to turn down and this to brings in concern. The only positive that I can take away from this chart is that both moving averages are still climbing. I do not think it will take much for this to fall, but as long as the S&P 500 continues to climb, GE will likely continue to climb. Just be careful here and do not give back to much profit.

Two days ago Caterpillar finally busted through $98.20 and it did it with volume to confirm it. I have been burned a few times with Cat, so I was waiting for that level to be broken. I believe that the measured move from the channel breakout if I did it correctly should push CAT to $110 before it slows to much. The next major level of resistance will be $112.

 

Last stock I want to talk about is Under Armor. I have been watching this stock for a long time and today I pulled the trigger and put it in my portfolio. UA at first glance appears to be in a down trend, but there are a lot of indicators telling a different story. On the Weekly chart not shown, the 10 and 30 day moving average never crossed indicating a sell. On the daily chart the most important signs is the higher pivot low and todays price closed above the last pivot high. So now we are guaranteed and higher pivot high somewhere down the road. Now if we supplement price indicators with our oscillators, we have several confirmation to help us decide to buy. The PSAR fired a buy the first day of the trading year. The CMO fired off on 1/9/12 and the MACD fired off 12/29/11 in December. The Stochastic fired on 1/4/12. So after todays break above the last high, I decided enough was enough and took a chance with UA. The risk for me on UA on a single transaction is 4.28%, but my total risk on the entire investment portfolio is just .68%. I think that is worth the risk.

Sold PFE–Bought GE

Got popped out of Pfizer for a small loss and re-invested those funds into GE. Yesterday got popped out Lily and re-invested in Ford. I also bought Kodiak Oil when it broke out of the Bull Flag that it had formed.

Some passed calls and how they are doing today.

Monday’s picks from December 17th, FMER, HD, and MRK, are still working even though all three are in Bull Flags and under a closer watch. FMER has gone from $14.59 to $15.13 a 3.7% gain. HD has gone from $40.42 to $42.04 a 4% gain. Lastly the only one that I couldn’t buy at the time because I had no cash, was MRK. MRK has moved from $36.25 to $37.70 a 4% gain. All 3 stocks are still working, but are in Bull Flags with stop loss orders on all except MRK which I do not own.

The two post prior to this post there are 13 stocks in Bull Flags ready to go in one direction or the other. If the break up, then they are buys. If they consolidate and stay in the flag, then we do nothing and watch. If they break down, then we have the option to do nothing or short the stock. But until something happens, we do nothing and just watch.

Part 2 of what I’m watching.

I’ve got 16 stocks that I watch closely and most are flagging and worth the watch. Below is Home Depot and it has been on the run since August 9th and there is a lot of chat on the Internet that it is going fall and fall hard. They are all calling the top and shorting the stock. I do not call tops or bottoms because I follow the trends. So right now Home Depot is in a very distinct Bull Flag and if it breaks to the upside, play it. If it stays in the Bull Flag and consolidates or falls from the flag then do nothing or short it when it falls through.

Kodiak Oil is also in the early stages of a Bull Flag and like Home Depot, has been in a very long run without much of a consolidation. The climb angle here is much sharper and looks scary to me. But if it breaks out of this Bull Flag and continues higher, play it.

The next 6 stocks below are all in a Bull Flag and all deserve to be watched for a breakout. Just remember, do guess or bet on direction, wait for it. Always place a stop loss order below the break out point, a pivot low, or a percentage below but never ever just let it go. Nothing like trying to figuring on the fly during panic selling when or where to sell. Most of us can’t handle that kind of pressure with real money.

Some setups on the stocks that I’m watching.

First is AAPL. This is a watch and you would wait until it breaks out of the Bull Flag or creates a pivot low.

Chevron is also forming a Bull Flag and just like Apple above, wait for the breakout. I currently own Chevron.

I like Ford but we have a down trend and up trend that will collide soon. A break in one direction or other should happen soon. Price is also below the 200 day moving average which makes this trade a little risky. I would also have to see a price break above the last pivot high before I invested in Ford.

First Merit is a slow grinding stock but it is working on another Bull Flag and worth watching. I currently own this stock.

GE current uptrend is a little steep so I would think that it would have to slow or consolidate for awhile, but a bull flag is forming, so I will play it if there is a breakout up.

My current Stocks that I track.

Tracking to many stocks at one time is just not good. You always feel as if your chasing your tail and even though you might miss a few great runs, at least if you focus you might be able to trade and make stable profit. So here is my list:

AAPL, BIDU, CAT, CVX, F, FMER, GE, HD, KOG, LLY, MRK, PFE, PNC, RAI, SYY, UA.

Technology – 2

Industrial Goods – 2

Basic Materials – 2

Consumer Goods – 3

Financials – 2

Services – 2

Healthcare – 3