The Trailing Stop

Same Candidates - Different Day.

Lats Wednesday morning I mentioned a new scan that I had been trying out. On whole, not a bad group:

 
Now of course I also called out Skechers (SKX) as a dog.  Just goes to show - buy based on your system, and let your money management take care of the rest.

Now one that appears a bit lackluster on the table above is LNET. LodgeNet, however, seems to be a little pressure cooker waiting for something to happen.  I really like the nice W formation, and the consolidation over the past four weeks has been accompanied by a a net influx of cash and increasing institutional interest.

What's up? Nothing obvious in the news or anywhere else, but I smell some excitement brewing. In at 18, and a 2ATR stop comes in at 17.36.

Happy Trading!

Prison - Was it Good?

The market still can't decide what it wants to do.  We're looking at some NASDAQ bellwethers having some real trouble. CSCO, JNPR, SBUX, AMZN all getting killed. If the other market's turn similarly foul we will end our brief rally and head into a downturn for the mid-term and it will be time to start taking a look at the longer term averages - to see if they are next.

A friend emailed to ask about a recent buy of his, and it looks quite nice. He bought the Buffet way - he understands the product, sees the market forces at work, a hot market, and OBTW - say that Mark Burnett had visited the ex-CEO in prison. Hmmm. So he bought.

He bought at 22, but I still think it looks quite nice:

MSO has just sailed through all visible resistance and has surpassed it's IPO all time high. It's Market (Media) and sub-market (Publishing - Periodicals) are both headed up as well. Martha is into uncharted territory here, so keep your stops tight. Then fix yourself some curry-butter popcorn with organic sea salt, pull out that hand blown glass lamp that you've turned into a serving bowl, and get ready for the show.

A Handful of Good Candidates

I ran across these this morning. Could be a fluke, but I think I found a great new scan. If it bears out over the next week or so, I'll share it with you. Here's  what I found: PDCO, GIS, PHS, SKX, VTRU, LNET,  PTA, and JAH. This is the entire output of the scan, so I think there is some less exciting stuff here - Sketchers is a good example, but taken as a whole, a pretty strong group.

Of particular interest is Penn Treaty:

Most of the other issues in this list are in solid trends, or have just broken out in the last few months. PTA seems to be about to start a new uptrend. If it does (and other indicators look awfully good), then it will be a breakout move. There is a bit of resistance at 2.55ish, but I think it should move past that with good momentum. Definitely one to put on the watch list. I'll be putting in a buy this morning, with a stop at 2ATR, or .14 below my entry, which also happens to be just below that nice W formation.

Another consistent player in a firmly established trend, but with a recent momentum surge, is Jarden:

Yesterday's blip may make you a little nervous, but I think it will prove to be an anomaly. Money has been flowing into this stock consistently since '02, but the pace of inflows has picked up as of late.

The last chart I'll show you today is General Mills:

Now I have done some business (or tried to) with General Mills, and have to say they didn't impress me all that much as an organization. (Note the thinly disguised sour grapes.) But I guess you can't argue with every kid on earth eating Count Chocula for breakfast.

There is generally held belief among traders that a new breakout will generally be equal in size to it's preceding base. The breakout will be as tall as the breakout was long. I always wondered how to set up my chart to get this measurement, but regardless of how you do it, GIS has some legs to it. Also going on my buy list this morning. I'm looking for run to at least 56, but there may be a rest along the way.

Angel Food Headed to Hell

If you are trading in your IRA, then you can skip this post, as it's a shortie.  There are an awful lot of them as of late.

Here's one I would classify as high-probability: It's Sara Lee, who had a nasty crater as of late. Typical of big craters like this, the bargain hunters and true believers are coming around to pick up a bit here and there, but not enough to make a difference (notice the declining volume on the subsequent rise).

Chart courtesy of StockCharts.com

I would look for SLE to come back up close to the 50 day MA before heading down to 22 or beyond. The volume should settle in the next day or so (Fed worries should help settle it quickly tomorrow), and then I would pounce with a 2 ATR stop, which should hold even if it decides to fill part of the gap.