You want tech earning?

Well, there you go tonight!    The highlight is the two of the biggest technology companies reporting tonight.   We are not going to discuss nor analyze their earning because there's tons of dedicated websites/articles/analysts for that.   What we keep an interest on is the reaction for each respective stock in after hour.     The action doesn't look too positive.    This is probably due to the expectation that's been set in place for these companies.   After all, the rally we've been having the last little while is largely due to the anticipated good results from the tech sector.

For one thing, tomorrow is going to be interesting as we'll be able to see if there's going to be a change in shift of the trading mood.     It's important because when we are in a bull mode( so far), every downtick or dip can be bought safely in anticipation of a bull push sooner or later.   When the bull mood changes to the cautious mood, the dip may not be bought aggressively or at all and this can dramatically lean heavy to the other side of the spectrum.    Of course, we don't want to make a quick judgement either if the market opens sluggish tomorrow because there's still tons of tech and non tech stocks that matter to this market that haven't reported yet.

Bottom line, don't play the earnings before hand and play them afterwards.    For us, it's also true that big companies make up the headline but the small companies make up the profit in our portfolio.     So, we keep in mind the potential change in trading mood but still actively hunt for good quality earnings report from small and mid cap sectors.

DRYS, if you really had to point out a real winner today then this one is on top of the list.   Yesterday's sluggish close is all but distant memory.   Of course, we'd wonder if it wasn't for that price target increase from Jefferies, would all these shippers even go up at all?    At this point, we are simply playing some intraday moves and aren't holding any over night.   We still feel the risk to enter for a long position is too high and we'd prefer some consolidative action first.

LPHI, we are parting away a fair portion of our position in this one.   What this play has done for us the last few days has been nothing short of phenomenal.   It's just a little too far extended at this point.

Solars, if yesterday didn't raise any cautionary flag from this sector, then today it's screaming that the sector is breaking down.    Believe it or not, every one of our favourite solar stocks we've been trading the past while, including FSLR, TSL JASO LDK, have broken below 9 ema today, all at the same time.    These stocks have not closed below 9 ema in about one month of trading time and that's about 20 trading days.    Now, this may not look like anything meaningful to some but to us, it probably means the fun time may be come to an end with this sector and we are shying away from this group untill some dramatic positive catalyst happens.

LKQX, we bought a starter in this one as the reaction to their takeover of Keystone has been very positive.   We are going to be watching its action closely.   This one is sitting on a huge short interest, fyi.

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. 

Volatile but better action...

We have gone through many volatile session recently and today's just no exception.    We can honestly say that nobody that we know expected  smooth action post Fed Decision.    Despite of the fact that we closed well off the highs off the day, but we also closed well off the lows.    More importantly, we closed firmly into the green territory and that's somewhat reassuring.      At least the breadth is much better today compare to yesterday.    We have been concentrating on some of the familiar names most of the day and carried some position home for a change of pace.

Here are some plays...

MR, this old play came out with pretty decent earning last night and we managed to play some middle way through the day.   Again, this one is from the medical sector and the it hasn't taken alot of damage during the past couple of weeks.   This is a strong sign and today we just got an excuse to get on board some.

CRNT, from the look of it, this play is not over by any means.   It may have a pull back here and there but the further away it moves from $15, the better trading action it gets in our opinion.   

LULU, we chased some of this one today as it cleared previous high pretty convincingly.   We are going to be flipping this one very aggressively as we believe taking short term profit is as important as getting in a good entry on it.

LDSH, this one also cleared it recent consolidation range pretty convincingly today and with the help of this market, we think this one can get some serious leg under it.    Of course, just like everything else, market behaviour is the key  here.

LKQX, given its usual churning nature, this one actually did exceptionally well today.    We aren't chasing much up here but in case the momentum persists, we'd be there without hesitation.

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.