Oddly enough Egypt’s market is actually showing some signs of stability this morning for it’s first open after Mubarak’s ousting, which is a good sign of market sentiment and reaction over events in the Middle East. You can take advantage of swings in Egypt through the ETF EGPT.
Yesterday I took profits on Deer Consumer Products (DEER) early on and Sprint (S) about midday. LDK Solar (LDK) seemed to weaken midmorning after failing to cross the $11.58 trading level. However, the Put/Call ratio dropped even further and although the stock failed to achieve new highs, it succeeded at not making new lows. Currently the stock is trading $0.04 above yesterday’s close at $11.29. While I would invest with caution, the stock certainly has several signs of moving higher provided it does not breach the $11.18-$11.20 level. I see a breakout to the upside above $11.60. If the break out crosses $11.75 we’ll be moving back to the $12.50 mark.
Couple reasons why I believe LDK is near it’s short term lows. The Relative Strength index has remained close to an oversold level, the Fast Stochastic is reading at an oversold level, and the Full Stochastic is reading at an oversold level, and the Put/Call Ratio remains low. While there could be some more downside pressure near term, it appears to be building a new support level around $11.20. You can protect yourself on a purchase of LDK by selling Covered Calls, however, be careful with the Calls as volume remains low and therefore volatile.
The NASDAQ also looks like it could be establishing 2253 as a short term support level. LDK tends to trade stronger as the NASDAQ gains strength.
XXV could also be a strong play today. Near term, I think the selling pressure has resided and the market is comfortably trading higher which could cause the $VIX to drop further. However, the upside to XXV and XIV could be limited until we see more stabilization in Japan and the Middle East. Still cautiously taking positions in those ETF’s wouldn’t be such a bad idea.
Broadcom (BRCM) could be a good technical trade as the range tightens up and it is possibly setting up for a bounce.
RAIT Financial Trust (RAS) looks to be gaining some strength, a $0.40 move to the upside could be coming, but be cautious. While the chart looks good, Rait’s recent capital raise could limit the potential upside.
Rexahn Pharmaceuticals (RNN) looks like it could finally begin to see a retracement to the upside. This stock is volatile so again use caution. If it breaks $1.50 it will run.
Barnes & Noble (BKS) if it breaks below $8.75 short it. From a technical standpoint Barnes looks like it is setting up for a bullish retracement; however the news out this morning suggests this stock is heading now where but downward.
Bank of America (BAC) appears to be losing support this morning crossing below $13.62 briefly. However, I think the downside risk here is limited and may look at taking a long position. I see maybe $0.30 downside risk and $0.60 upside potential near term. That’s a trade that could go in your favor.
Don’t have a complete list this morning. Still watching TCB and C as well.