Done with Q3 , Start Q4 with ...

Well I did not get the pull backs I was hoping for in hi-techs and fast moving stocks that I was hoping to buy. Call it end of the quarter-window-dressing, short squeeze or anything you want, stocks went up in general, and I could not get in any of the stocks I wanted to , but one. (Bought some call options on XOM-Exxon mobile). I give you an example, I was aiming at DRYS for long, on Sept 24th stock was at $80 and I wrote, I will be buying calls on this one on any sign of weakness or correction, well stock moved up another 13% (its 90 now). Lets see how this week starts, but I sure got another list of strong stocks to buy and perhaps some stocks to short. On the call side my list is long, I go with the bulls for rest of the year and there are many good candidates I named many of them last week. This week I am looking in some mining stocks, metals, iron & steel, well the list is long but here are my choices for the Buy side: BBY, RIO, BHP, CHL, EDO, PCU, SID, ICE
and Looking into shorting Nutrisystem (NTRI), I will add more detail later on. The one I marked in RED, will be most likely for me to trade real soon. Best Buy gap-up in mid sept. was with very high volume and since then its coming down and perhaps closing the gap, therefore I will be happier if it gets below $45 then I will buy either Nov, or Dec 45's. NTRI sell signals coming since mid-sept, and it's at, a very short term support on Friday, any upward move from here will be selling opportunity and I think I should wait for a point or two jump and then buy puts (knowing the fact that the pull-backs or short term rally may not happen or not in the time frame that I am looking for, I am willing to exercise discipline here and try to enter a trade when its most favorable).

RETAILERS Gapped Down yesterday

Retail Holders (RTH) gapped down 2% yesterday to put them back below their moving average lines. RTH is up 0.20 at 100, I would say any strength (bounce back should be viewed as selling opportunity), I am in particular looking at Home Depot (HD -- $33.19 Up 11 cents) Home Depot also gapped down yesterday, slow down in housing market is not so great for Retail (Home improvement) stock like Home Depot, Maybe one could look into buying puts on HD as a play in Selling (i.e. shorting the weak retail sector). (Lowe's and Target also missing their targets)

Two new Sell Candidates

BP (British oil giant) $68.90 (Down $2.34 Down 3.28%) '..after a report in the Financial Times that the firm's new chief executive will undertake a wide-ranging restructuring following "dreadful" third-quarter revenues." according to MarketWatch. Adtran (ADTN -- $22.04 Down $0.80) On Friday company announced ".. Network access equipment maker ADTRAN Inc said on Friday that revenues and earnings per share for the third quarter of 2007 are expected to be flat compared to the second quarter as the normal seasonal increase in business has not happened."
Update on LCC Puts: My US Air puts are not doing well (Oct 25 is at $0.90 now) still holding. Still waiting for a market correction to buy hi-techs.

Big price Drop with large volume

Shares of US Airways Group Inc(LCC) is being very active today and dropped 9.5% so far, on AMR disappointing outlook. I bought Oct 25 puts at $0.95 for very short term trade. The Airline sector is down on AMR news (AMR down 14.5%) "AMR Corp. led a sell-off in airline shares Monday, after a slew of analysts said the American Airlines' parent forecast for third-quarter operating results came in lower than they had anticipated."--from CBS Market watch.

Recognizing the break-out and awaiting pull-back

Yesterday I put two stocks on my buying list for the month of October. I have been observing , trading and discussing them multiple times. They both belong to very strong sectors of the market and performed very well in the past year. DRYS closed at $81.65 with high volume and POT closed at $102.79. POT moved from 89 to 102 in 4 trading days with very high volume. Maybe a short squeeze or maybe investors gained more confidence in this sector (other players are also nicely higher in this group). But I try to exercise patience and wait for a pull-back , On DRYS the pull-back of 2points will be acceptable to me but on this on (i.e. POT) I would like to see 4-5 points to get more comfortable to re-enter a long position. As I also mentioned yesterday, I am really hoping for an over-all market pull-back to enter these trades so perhaps wait till WED or Thursday to buy them. The price action on these two stocks is rather wild, exercise caution).

My October Trading candidates

Looking into buying "best of breed" on a pull-back this week. Dow and Nasdaq were up 5% last week, so I am expecting (or hoping) for a correction early this week. I would use the pull-back to buy call options on the following stocks:
APPL, Research In Motion (RIMM), Goldman Sachs (GS), Edo Corp (EDO -- Aerospace &Defense), Exxon Mobile (XOM), Potash Corp Saskatchewan (POT), Dryships Inc (DRYS). I am more bullish on the ones in red. I am also looking forward to short some stocks, I will post some candidates later today or tomorrow.
UPDATE on FCX: Freeport-McMoRan Copper & Gold Inc. (FCX) , I wrote about this one last week when stock was at 103, its a Gold/Copper play, it closed at 108.69 on Friday , did not get the pull-back that I was hoping for but if we get one this week, I will get into this position as well. the Metal-,mining group is ranked at 99 percentile (the highest group ranking) and FCX is a nice entry point into this group.
Update added on Sept 24, 07 1:58am: OK I came up with two candidates on the sell-side, POOL and TEK. Pool Corp (POOL) closed at 24.80 on Friday after the company lowered its estimates for the next quarter. "company said it now expects 2007 earnings of $1.45 to $1.55 per share. The company's previous guidance was earnings of $1.75 to $1.85 per share and the current consensus earnings estimate is $1.76 per share for the year ending December 31, 2007." . Please note POOL is at its 2 years low and the Gap-down with such a large volume is really negative, also the very large volume (4 times average volume) is significant. Tektronics Inc (TEK) closed at 29.61 on Friday, after the test and measurement equipment maker forecast fiscal second-quarter results below Wall Street's expectations. TEK went down $2.69 on 4 times average volume on Friday.

Bought Mcdermott Intl Inc (MDR - Oct 55 Calls)

As oil clearing $83 and Gold moving to uncharted territories, I felt like I close my long positions on MRO and APA too soon even GRP I did a day trade on that and made profit but I sold too early on all accounts. I guess my record is 10 out of 10 in closing too early and not profit from the large moves in the stock prices, well that said, I am much happier with my picks and the direction of my trades (I just don't know when to sell). MDR price/volume action is very encouraging and again MRO /APA could have been safer plays, but I wanted to catch one on a down day. I will be buying more oil/related stocks if they pull-back. MDR's recent uptrend signal was given by Point & Figure chart (Double top break out on Aug 24,07) when the stock was at $43 (closed $53.38 today).

UPDATE Sept 24th 07: SOLD Oct 55 Calls at $2.45 (buying price $1.40 on Sept 20th)

$ Down, Gold Up, Mining sector looking good

I know I am not making a much of an argument here but many (I mean) many stocks just point us to much higher levels in various sectors, like finance, banking brokerage hi-techs oil & Gold. I am just showing my next trade target Freeport-Mcmoran Copper & Gold (FCX) but I am looking into buying some financials as well. Names like: WELLS FARGO (WFC) Bank of America (BAC) and Wachovia Corp(WB), also Goldman sacks (GS) looking good even after 13 point jump today (they will announce their numbers on Thursday). I will be looking for some SHORT candidates as well (there are always some .. ) . The FCX chart is not unique, I could have marked the same price break out on many stocks and the P&F chart also confirm the bullish pattern since Sept 12th (again thats not a unique), I guess at this point I want to take a long position and I can find number of reasons to be long in this stock,( you can find that as well)

Updates on some recent trades

Closed (early) my long position on SIGM yesterday, Although profitable but th e real move came after I sold yesterday, so for those of you who are holding to your SIGM long positions, you can thank me later for selling early :)
I also closed my AAPL Sept calls (Sold Sept 140 calls at 2.85 on Mon. Sept 17th, I paid 2.05 for them on Friday Sept 14th)
Update on Getty Images (GYI) Short position: I missed out on this one, I refused to pay 0.05 extra to buy Oct 30 puts on this one (I could have bought at $2 yesterday), the GYI is down 1.64 today and those Oct 30 calls are $3.40), well the volume on the options are too low. I decided not to go along with shorting RAIL, since many investors are considering it as a quality stock and step up to buy at this level, I did buy Oct puts on Carinal Health (CAH), paid $1.65, its trading at $1.40 now.

DRYS is getting too low, maybe a SELL

I traded DRYS once or twice to the upside and watching it for a while, but recent weakness is troubling. According to Point & Figure chart below , close under $68 is a bearish sign (the buy signal will be given when the stock closes in 78-79 range (far from todays price, its trading at 68.10 right now, but it dipped below 68)
So I am watching it for a possible short trade, the oct. 65 puts are expensive ($4.70)

The week ahead

We have certainly a volatile week ahead of us, the so called experts are in disagreement more than ever and , are all over the map as for the direction of the market. Fed meeting on Tuesday, Brokerage houses earnings this week and option expiration on Friday are good enough reasons for staying out and wait till dust settles down. Well knowing myself, I can not do that so already took some bullish position on hi-tech favorites such as AAPL and RIMM and stay long on SIGM.
I was also doing some research this weekend for some buying candidates and of course some shorts as well. On the long side , the EDO from Aerospace &Defense sector is my new pick. The industry seems to be recession proof and not even sensitive to who is politically in charge, they just go one way now no matter who is in the white house. The stock moved sharply higher in the past 6 months so its not exactly a hidden gem, but I will try to grab some Oct calls soon, I stay with my hi-tech picks and would grab more RIMM on any pull-backs. Here are my two short picks: I was basically looking into 52 weeks lows list and Most % loser's list to get my clue for picking few short candidates. Cardinal Health inc. (CAH) is my first pick in this category. The stock closed at $64.67 (down 4.8%) on Friday, after the company revised guidance for its supply chain division. I did not need to read more into the news , obviously it was a downward revision. For those who are in reading charts , you can take a look at the P&F chart and you will see "Double bottom breakdown on Sept 14th". My next two Short candidates are on the 52 weeks lows (after all stocks end up on that list for a reason), GYI and RAIL. Getty Images Inc (GYI) closed at $28.76. GYI is on Zack's "Strong Sell List" since August 8th based on drop in analyst estimates. I don't want to even mention P&F chart in this case, it was a screaming short since August 14th. The rail road stock improved in the past three weeks as a group but the weakness in RAIL can not be ignored, I would wait for some sort of bounce and then short RAIL.

Closed IGT Calls

Sold: IGT Oct 40 calls at $1.90 (Sept 12th, 8:25am PST)
Bought: IGT Oct 40 Calls at $1.10 (Sept 5th)
Stock upgraded today.

UP 250% in One Year, Am I late to the Party?

Vasco Data Security Intl (VDSI). This stock went up considerably in the past year, Hope there are some good trading days left. I am looking into a short term trade here (possibly Oct 35 Calls) the group is also gaining momentum and money flow has been up recently.

% Held by Insiders:	37.59%
% Held by Institutions:	57.20%

Insiders have great incentive to perform

UPDATE: Stock is downgraded this morning to market performer, So I stay away from this stock as a momentum play. (8:15am PST 9/11/07)

Biotech has momentum

Many Biotech companies and Big pharma stocks mentioned on CNBC Fast Money, yesterday.
Names like : MRK, LLY and BMY and Biotechs: AMGN, BIIB, DNA, IMCL,
I am looking at BIIB which is up more than 3pts today and DNA (up 0.85), money flow in this sector is also increased.

DRYS grows on top of rising shipping rates

[Stock tripled in the past 6months]
The Baltic Dry Index, which covers drybulk shipping rates and is managed by the Baltic Exchange in London, jumped 116 points Friday to close at an all-time high of 7,702 -- more than 400 points higher than where it closed Monday. The index, which measures rates on 40 shipping routes on a time charter and voyage basis, has set an all-time high with every close this week.[According to AP (reported on Yahoo Finance), Aug 31st, 07], Although the Water transportation group seems to loose some ground in the month of August, they are still in the top 15% of the market, here is my question: should be waiting for a pull back or buy something early this week? I may wait till Wed. to get more favorable entry point (i.e. pull-back).

UPDATE: Sold 20 Sept 75 Calls at $4.20 (On Sept. 6th 07)
UPDATE: Bought 20 Sept 75 Calls @ $2.35 (on Sept. 5th 07 @7:12am)