The setups I include on this blog are used in conjunction with the 3/10macd and the criteria I ascribe to it as a way to alert me to an existing condition of price. The key concept to take away from this blog is that I try to anticipate what will happen on the higher time frame by using a faster time frame to trigger the trade setup. I do not trade a "system" I use two indicators to clue me in to price conditions. Please read the Disclaimer located in the sidebar of this site. I can be contacted via email at
I am always open to questions, comments, or suggestions on how to improve this blog.

Sunday, January 23, 2011

week ahead

A breakdown of some stocks to watch in the week ahead.
MCD: - earnings report on Monday
weekly: Momentum indicator ticked lower while prices went higher (short covering).  Also, the indicator is showing a reverse divergence; Higher low in price, lower low in momentum. This down channel is pretty tight and steep, and easy to break out from.
The daily showed solid covering/buying at the 200-day MA.  Mild resistance overhead, including the 50-day MA.  Should prices sell off on earnings and return to the $70 area we could see a buyable momentum divergence.

OXY - earnings on Wednesday.  No one's selling and price sits at the highs.  However, good earnings do not equate to higher prices.  OXY in particular has seen 11-weeks of 18+% price increase with very little price discovery in between
The daily certainly looks ready to break out, so it's a matter of conviction follow-through we have to gauge

Some observations I find interesting:
The QQQQ has a reverse divergence (so long as it doesn't take out $54)

FCX reverse divergence as well

APA-weekly gap fill overhead
Just my personal opinion, but I feel any move above this rectangle on the daily as it approaches $130 could make a good daytrade short
Chugging right along is the OIH where it is approaching this Oct '08 gap.  These resistance levels are a process, so we can either expect immediate rejection and testing lower, or basing behavior that builds value at this level over a number of weeks/months.

The trend here is solidly up.  The 3/10 MACD slow line has been bullish since September, while each momentum thrust up has been impressively strong.  One potential downside observation would be that the 3/10 slow line is working it's way closer to the zero-line. 

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