Daily Stock Picks Report Archive

Let’s talk about the financials because they are getting my attention again.  The strongest bank stocks, BAC and WFC are breaking down and have more to drop.  Both WFC and BAC saw lower lows and this could easily drop another 10%.  I am not thinking to short them at this point but to watch and wait for potential long entries, especially if there is a big washout as we saw in mid July.

Watch LEH, Lehman Brothers for a potential crash similar to BSC, Bear Stearns.  These investment banks work on perceived confidence that they are solid to work with but if their customers or other banks won’t do business with them it could become a house of cards.

Note that the NASDAQ Composite daily chart has more work to do on the downside than the Dow Jones Industrial and the S & P 500 index.  The Dow and S&P could easily start to work upward from here

 AFAM, Almost Family, moved up today but didn’t exceed the recent high of on August 11-12th.  Most of these bullshorts don’t exceed that high but this is the difficulty of working with this trading model.  It is usually best to take the profit on that first drop that occurred on August 12th from a high of $44.40 to under $35 in the same day and when it rebounds, just set an alert on it and keep it on your watch list to see how high it runs up.  Shorting on the rebound is not usually a great idea except if the market in general is weak or that particular stock has been acting weak. 

The odds are it heads down from here but if it continues to run up tomorrow, I’ll have to close the short.

TACT is acting normal and corrected nicely today to under $12.  My target price is $10-10.50 within a week or so.

TWP is breaking down as well as SWIM; NPSP does not look like a good short now.

I am short MITI, Micromet and corrected nicely today until the last 15 minutes it ran up almost 10%.  This should continue in a downward trend this next week.  I am looking for it to break down below $5. 

I am also short GPIC, Gaming Partners.   This isn’t a classic bullshort pattern but my reasoning for shorting it has been dormant for a couple of months and this little pop up will have some selling into it.

LBYTA, Liberty Global Class A is turning over now but has only about a 12% profit potential so I passed on it as a short.

CPHD and MYGN are weakening and both are corrected today as expected.

AGU, MOS, MON and POT were excellent bull runs today and opened down during premarket hours.  This is what I was expecting considering this pattern has been showing itself for a couple of months with this group.

The coal stocks are starting to look like a bottom is forming in FCL, Foundation Coal, ACI, Arch Coal and MEE, Massey Energy.  The stochastics, On-balance volume, relative strength index and the fast moving averages are turning up now.  At least this could run up with a decent profit potential. 

Even if these coal stocks make a counter trend upward, we can make a little money going long but look for any signs that they repeat the pattern of lower lows and lower highs as we have seen since mid June.

You can also see that I’ve focused my trades on the short side because I’ve been expecting a correction.

Keep your discipline with stop losses and position sizes that are relatively small. 

Have a great day.

Mitch King

www.TradeStocksAmerica.com

PS:  Saturday, August 23rd is scheduled 1 day workshop at my house.  Please email me at [email protected] if you would like to attend.  We are starting at 8am and will try to wrap up by 4pm.  Bring a laptop if possible.