Friday, January 20, 2012

Weekend Thread

Options Expiration Week finished with the bears in hiding. The Nasdaq was marginally red for the first time in days, due to weakness in GOOG and ISRG, but the SP500 and Dow finished green.

Rest up over the weekend, as there is a large group of earnings reports next week, in addition to Obama's State of the Union Speech on Tuesday night, and FOMC meeting and Bernanke press conference on Wednesday. For a more complete list of the events next week, see http://algofighters.blogspot.com/2012/01/morning-thread_1404.html#comment-416987920 provided by the always faithful southern.

Y'all have a good weekend, and remember Miss Etta James who passed on.

Afternoon Thread

Gator's Chart of the Day
(NTAP Daily - Click chart for a better view)

Many of the networking and storage stocks are quite extended.  NTAP has lagged by a day or two in making a significant move so we could see some more upside before it needs a rest.

In November the stock gapped down hard on huge volume and just this week appears to have confirmed support around 33.50.  Wednesday it printed a pretty green candle on average volume with an impressive follow through on Thursday on much higher volume.  The stock closed above the 50 day sma after failing there on multiple tests in December.  The 20 day has just turned up and remains below the 50 and well below the 200.  It is at December resistance but with the 50 day as support I think it can move into the gap. 

Here's one way to trade it: Watch (or set an alert) for a move above Thursday's intraday high of 37.67.  Take an initial position (maybe 1/4 or 1/3 of what you really want to get) and put a stop around 36.75.  That is tight (<3%) but the thesis is the stock is moving up and if it falls it's not moving up.  When you have profits (say +3-4%) the stock will be around 39 and clearly into the gap.  Consider adding there and put a stop at the top of the gap.

  

Morning Thread



Gator - I could see your draft but it didn't post ...


Re-run.