Market Update 7-19-12

It looks like we are on another run today.  The bulls are charging even before the bell has rung.  IBM’s numbers are up and tech made a monster run yesterday.  I knew it would happen eventually because many of those stocks were undervalued according to my stock value calculator.  As always a rising tide floats all boats so many stocks were up yesterday.  Look for another run today at least in the morning.  I don’t like buying when stocks are high so I’m going to wait and see what happens in the first hour.  According to Day Trading Rock Star usually there’s a 9:50 reversal of the trend in the morning.  

I did get into WMT yesterday because it got real low and I was just tempted to get in.  It didn’t have the same strength as it normally does but hopefully with this bull market WMT will charge back up to its highs.

I may look to get back into MCD if it pulls back.  The technicals look good, I just want to see the 20 day moving average move closer to the 100 day on the daily chart.  It’s also trying to break through a resistance line. It’s been testing it for 5 days so I won’t feel confident until it breaks through.

MSFT has been grinding higher and has almost established its trend.  It is about to break through an important resistance level.  I’ll wait till it gets through that level and pull back then I’ll be more confident about getting in.

CTDT the speculative stock last week fell off big time yesterday.  I only had a small position in it so I’m fine but it just goes to show there are folks out there that will bang the table on a penny stock to drive it up and then take all the money and run.   The best and only way to play the market is to know the company and its value and then buy the dips, watch it rip, and sell the tips.

Market Update #2 7-18-12

I got in and out of my McDonald’s trade early this morning.  It went up from 0.39 to 0.45 and I was able to take profits.  In markets like this it’s best to scalp the upswing.  The playbook: buy on the dips and sell on the tips.  Just make sure you watch your moving averages, support and resistance lines.  That’s how I know when to get in and get out.  Once the price goes down to a main support level, I look to buy on upward strength.  When the price reaches a main resistance level, I sell on weakness.  That’s pretty much the plan. 

In fact as we speak, Walmart just came off a support level.  I may get in if it breaks through the $73 resistance again.  It broke through this morning and I saw it go up.  But as we know what goes up, must come down.  I don’t trust it right now yet because it only broke through that resistance level once and it tumbled back down underneath it.  The strength hasn’t been confirmed yet.

Market Update 7-18-12

Yesterday was a bit choppy but I was able to make a nice run on Walmart again.  When Bernanke started talking and not saying anything about QE3 the market tanked and went back to a support level.  I watched Walmart until it got really oversold and then I knew that it had fallen too far.  Walmart is too strong a stock to stay down for any length of time so went in after I saw some green candlesticks which showed that the stock had strength.  I waited till it got back up close to its new highs and took profits.  

I got into Dunkin Donuts as I saw it swing up but I didn’t make it high enough to make it to my profit margin.  That was a bad move because it fell back and never regained its strength.  JP Morgan downgraded it so some of its energy had been sucked out.  Hopefully it will rebound off of the moving average today.  The 15, 30 and 60 minute charts all have it right at either the 20 or 100 period moving average.  Let’s hope it bounces back.

After watching Cramer’s picks from yesterday I’m looking at FUN and MCD.  I’m more partial to MCD because it is a major brand name and the trade volume will be there.  MCD made an inverted head and shoulders and just moved ahead of a resistance level.  It has also pulled back to the moving average on a couple charts.  Cramer also mentioned one of his analysts said he has a $97 price target giving us about 6 more points to run. I ran it through my stock valuation calculator and I have at least a 95 price target. I think MCD is about to pop.  I may get into it today if I see strength (that’s if Walmart doesn’t break its highs).