Trend Notes: 9/12/2006

I picked up three new positions today. See them at the bottom of the list. I've decided to report on all positions on Tuesdays and Thursdays from now on, regardless of time held:

OKE (+6.86%): Caught in a month-long consolidation. Playing the waiting game.

RAI (+9.20%): Approaching a third attempt at a new high. Support has held twice at 64.

CXW (+21.86%): Broke out nicely yesterday and followed through today. History says we’ll trend sideways for a while now. The stop was moved up yesterday.

TXU (+2.72%): Not a good day today. A stop with a minimal closing gain is in play. Still, support held.

HCR (+7.99%): I was hoping for a sign this one hasn’t slipped into a downtrend, and I just may have gotten it today. It closed above the previous little move up in consolidation. Now we need to hold the bottom at 51. Of course, I’ll also gladly accept a move up to 54.

LNT (+1.03%): I really hope this one is building up for another leg up in the trend. Just holding the trend line started n late April will make this a nice trade in the end.

SBIB (+4.78%): Excellent job holding support the past few days and bouncing off today. More volume is needed to push it up above resistance at 21.

CMCSA (+2.40%): Should be starting a leg up to at least 36. Short leash on this one.

LTR (+2.82%): Has begun the next leg up in the trend. Each leg has added about 5% of value.

ORCL (+6.54%): Has traded to the top of the channel. It is difficult to see this one going crazy to the upside any time soon. Short leash, but a stop now yields only just over 1% gain.

DGX (+0.10%): I figured I’d find support about 62 – 63, and so far I’m right. Hopefully, volume will arrive to push it up above 65 soon.

SEIC (+5.03%): Clocked by an analyst downgrade a couple days ago, gapped lower, but recovered and brushed the downgrade aside. Today marks a new high, and volume has been fantastic.

PWEI (+2.91%): Stalling out a bit towards the bottom of its current range. I’m wishing horrible things for all those shorts!

TRMB (-6.07%): This dude needs to turn around right here. A further move down is bad news.

UDR (+4.07%): A little more mustard on the hotdog tomorrow and I can move the stop up into a profitable position.

ORB (+1.98%): Best move since I bought the breakout on the first of the month. I figure a rocket company has to be a good investment, right?

HPOL (+0.01): Bought yesterday on a huge breakout move on huge volume. It held the top today on even larger volume. Lots of churn going on here. It is small, so if it catches fire, it should be very much fun!

HET (+0.67): New to the portfolio today. HET arrested a nasty downtrend begun in May, and now appears to be forming an ascending triangle. I love these formations. I’m trying to work a little more bottom fishing into the portfolio.

CVD (-0.45%): New to the portfolio today. Nice breakout play on good volume. Stop is set below support.

MAR (-0.12%): New to the portfolio today. Nice breakout today on good volume. Stop is below support.


I'm trying to find some bottoms to stick in the portfolio. This has never been a focus of mine, having always been a momentum trader. However, with my focus now on longer trends, starting at the bottom seems like a good idea at least some of the time. I won't ignore breaks to new highs, as when they're good, they're very good.

One problem with holding for longer periods of time at the top is the downgrade issue. I lost two stocks with great charts after they fell hard on a downgrade. I managed to escape a third this week when SEIC flipped its downgrade the bird. There should be more upgrades than downgrades at the bottom.

The main reason I've never liked bottoms is all the resistance levels the stock has to punch through on the way up. But, over the longer haul, they do punch through if they're good.