Reassuring day?

Perhaps Not!    It's just troubling to see that index is up so much while the decliners are still out pacing the gainers.     Ok, many of us have to admit at the end of the day that this huge point gain hasn't really done much for us, the individual traders.    What the market is doing is that it's trying its best to confuse and frustrate traders at the same time.    Do we play this rally aggressively or not?   For all we know, tomorrow could be a nasty selloff day.   This is the kind of uncertainty we are facing day in and day out for the last little while.     Under normal circumstance, this rally would be viewed as very bullish.    In the current environment, it only makes us fearful that this is just another rally that would soon be crushed.    Well, if pattern serves right, we'd be going right down either tomorrow or the day after.      Ok, enough of this "once bitten, twice shy" analogy.

What we have been doing today is prioritizing our trading list and put those stocks that have just recently announced good earning as the ones to play and monitor.     Many stocks have suffered lots of damage technically but we are able to still find some decent plays that offer us good trading setups.    Here's a few that ought to be familiar by now...

FCN, this one came out with earnings when the Dow dropped close to 300 points last Friday.   Today we believe traders are realizing the value of its earning and bid it up.  We like this one's momentum and we are trading it aggressively.

ARTC, this one also is a recent earning play that has pretty much weathered the volatility of this market.    Perhaps it has alot to do with the type of business this company does and it's definitely standing out from the crowd and notched another high.

LKQX, it came out with earning last week and it notched a new high quietly.   We like this one's setup today and we are monitoring it very closely.

GHM, this is one of the very few small caps that actually did well today.  We added some and we are looking for some more follow through on this one.

DOCX, after its first earning reaction last Friday, we are more encouraged by its action today.   The more we read the report, the more we feel more confident about this little play.   The only question remains is the question of sustainable interest.   Will there be enough interest that can give this play a run?   At this point, we aren't too sure but we did add some today on its improved action.

CRNT, so this one came out as #1 on IBD100 and we got the initial pop as expected.    We don't think this play is over.  The longer it stay above $15, the more likelihood that  it can try for more upside. 

Taking advantage of the tape...

The truth is, it isn't exactly easy taking advantage of today's rally.   If you really paid close attention, many if not most of the stocks on our watchlist hit the day high right around 10 A.M. and it's pretty much sluggish action from that point on.    Sure, if you happen to have some poisitons tucked away going into today, then you'd have a pretty good day scaling out here and there.    For those that began the day literally flat, you almost have to buy stuff from the get go and cash it all out half an hour later to enjoy most of the rise.    Otherise, it'd be most likely a diffuclt battle making an entry middle day.     Stocks can be volatile even on a seemingly good day.   For us the traders, we have to recognize the volatility and making use of it to our advantage.    We have been cashing out quite a bit of stuff during the day because as the indices was heading higher, many of our positions were either stalling or drifting lower.    That's a sign of tired play and frankly, many of our recent plays have gone up enough to justfiy some sort of pullback.

Here are some plays that closed well off their highs...

FCN/LDSH/LKQX/ARTC, these four in particular all hit some really nice price point in the early going but they all couldn't stay up there long enough.   Yes, they have been up quite a bit past few days and we basically  have to take some profit here.   Don't forget, big point day like today don't come often and they only happen often in a volatile environment.   During the volatile environement, we have seen more big point down day than the up ones so we have to fully appreciate what's given us by locking in some profit.

CRNT, this one took a pretty nasty turn intraday and closed much lower than its day high.    We are not absolute certain if this is a sign of reversal but it does feel that the easy and sure money has been made in this play already.     Again, we'll leave it at this piont and let it sort itself out for the next few days.

Eyeing the range...

Regardless what comes at the newsfront, we believe alot of traders would be eyeing last week's high and low as the sticky point to trade.    Unfortunately for traders, those sticky points amount to almost 500 point range on Dow and about 100 point range on Naz.    Such is the life of traders and this is what we have to deal with.    In our opinion, this range bound trading can last a long while and we have to get ready for it.

Today is the first day in a while, well it seems like in a while, that we've seen less volatility from this market.   This is a good thing and less volatility definitely gives confidence back to traders.    The more orderly the trading becomes, the better looking chart setup we'd get and better probability comes out of each play.   Well, so far we can only hope that is the case and we'd get some more opportunities to trade.

here are some interesting plays we are looking at today...

CRNT, after some very volatile trading in the past three days, it seemed to settled in somewhat today.    Good thing for this one is that it's now back above 9 ema and above $15.    How firm is this price?   We don't know at this point and we'd have a pretty good picture next couple of days to find out.    What is worth noting at this point, however, is that the play doesn't seem to be finished.   As long as there are crowds willing to push it for that IBD100 listing, we can certainly take advantage of such case and trade a point or two out of it.    The most important thing here though, is not to get greedy and remember this is nothing more than a play.    This one looks to be at a pretty good range bound between $14 and $17.

JST, we noticed the earning release from this one in the morning and couldn't help but started a small position.   Well, at the time both indices were well into the green.    What we like about this one is that it held on to its gain and even attempted to run up even near the end.    Its earning didn't seem too bad to us either since both its revenue and income are at the record high.    Of course, this one isn't new to us and if it moves, it can really move.   We are putting this one high on our trading list at this moment.

STAR, this one seemed to enjoy the day far better than many other stocks.   We like the kind of business it's in and the fact it broke out into a new 52 week high is also a huge bonus.    We got a starter in this one and will trade accordingly.

WX, this is almost a brand new stock.   It only traded for three days and again we think this is the kind of stock that may not be affected by what's happening in our financial market these days.   The co. of course seems expensive in terms of valuation but really we haven't found one recent IPO that's trading at a reasonable price level.    It's all about perception and as long as "the crowd" likes it, we'd play along with it.

BIDZ, perhaps it's our bad that we didn't notify everyone that it's releasing earning report tonight.   Well, guess it's ok to slip one through once in a while.    Company came out with earning and forward guidance after the close.   We actually like the number and its guidance.    What we want to point out is that another company NILE has enjoyed lots of success with its model.   There's always the possibility that this one is gaining some good growth in a big market, even at the expense of others.     If it wasn't for its earning report tonight, the setup looks great.   We do have to see if it gets run up tomorrow or not and reaction is really unpredictable at this moment.    Basically, keep a close eye on this one.

FCN, finally, after some much needed pullback on Friday, this one again regained its footing today.    Perhaps couple more consolidation days and we can get another strong runup going.