Friday, June 1, 2007

Nasdaq Closes Outside of BB

If one looks at the times when the Nasdaq has closed above the upper Bollinger Band in the past year, he will find that typically, within a day or two, the index reverses to trade back within the bands. Even worse, a doji was formed today, on lower than average volume. What does this mean for us Monday? Who knows. What it means to my trading strategy is that it is time to cut some laggards and build up a little cash.

I sold GIGM today because it looked like it might close beneath the 50 day average. This was a hard call to make, as I really like the company, and the stock. However, I feel it might make a double-bottom around 14 before moving up again. There really is no near-term catalyst to drive it over $15, and the company forecasted a weak 2nd qtr. I noticed it did catch a small bid at the close. I will be a buyer again on strength over $15 or a re-test of the $14 area. I made a couple percent profit on this trade.

I added to HANS today because there is going to be one heck of a volatility squeeze, hopefully sooner than later, and hopefully it will be UP.

CLWR continues to outperfrom, although it could not hold above resistance at $20, so I did not add any. Volume did swell today. The Fly used to have a position in CLWR, and sold it all, and now seems to hate the stock. I think he is punishing it by not buying it back.

Finally, SWHC closed above $14.00, and PFWD has experienced 2 days of high-volume churn, probably as recent buyers of the 15 buck follow-on shares unwind their easy money. PFWD may have to be sold if it can't hold $16.00

All in all it was a killer week, and I was able to finish it off making another couple hundred bucks today. I am hoping to get a post or two up over the weeked, so stop back by if you get the hankering.


mdawsz said...

This is the second weekend in a row where you promised weekend blogging and then don't deliver. As danny would say, "dude, that's weak."

Woodshedder said...

Hey man, I'm working on it right now. This one will present some backtesting data. The excel data is taking me forever to crunch.