Thursday, January 25, 2007

Night Cap- Short Setups

A schizophrenic market is hard to trade. However, these two stocks look ready to decline.

First up is TTWO. Christmas time is over, and this video gamer looks ready for some seasonality. Note the Head and Shoulders top, with todays action bumping against resistance of the trend line and 50 dma. Combine that with declining volume on the bounce, huge negative MACD in early Jan., and Stochs that look overbought, and I think it is ripe.







Next up HXM, which I believe is a Mexican homebuilder. Sorry folks, I'm mostly a technician; don't count on me for fundamentals.

I've been wanting to get short on this for a few weeks. The bearish MACD divergence would have been the time to get short here. Also note the low volume new high. Now I'm looking for a break of that trendline. The 50 day seems a good target. With a stop at 59.03, that makes for a 4:1 risk to reward.

Keep in mind HXM could just be consolidating for another move up. Wait for the break.

1 comment:

mc said...

you can email me at mcammayo@gmail.com if you need info/help about building automated systems. Ugly from Uglychart.com could be a good resource about automated trading platforms. He is currently building one.