Last Sunday, I posted a dozen or so stocks to watch.   Most didn’t do much.. up a little, down a little.  However, 4 were winners – MBRX shot up over 60%;  CPST up over 13%;  ZHNE up over 19%; and NXG over 9%.  From last week’s list, BDSI and ZHNE look ready to add more.

More Monday, Oct 12, here are the technically setup long stocks I’ll be watching:

BDSI – I like this test of resistance on opening bollinger bands.  Could be interesting this week.

ZHNE started its move last week and could continue to add. Worth watching.

WAVE – Nice volume accumulation. Looking for a 1.10 breakout.

SNV on trendline and banging against MA200. Would like to see it move through with target 4.5. BTW – also setting up for MA50/200 cross.

DVAX Watching for move up through MA50 on bottomed out Full Sto, RSI14 testing 50 (daily) and MA50 support on the weekly.

FBC – Flagstar Bancorp building a little flag on the daily. Might be worth an eyeball.

Here are few more – maybe not as setup as the above, but worth watching:

QRCP – improving volume on Thursday and Friday – watching for move north of .60.

BNVI - nice MA200 support. Would like to see a .50 entry with move up from there to MA50.

ASTM might be over sold. Worth watching for bottom reversal.

GNBT reversal. Target .85 on swing.

AMCC – nice consolidation.

SVA – long swingable.

ARNA – could go up or down here on MA200. Careful.

Check out my latest long swing/scalp ideas for Monday – would help if the market could hold these levels or rebound back up for a few days…

F – I struggle to find love in the auto industry right now, but F tested horizontal support Friday and will be worth watching Monday for possible swing entry long if it holds.

BDSI – Building a little flag against 5.00 with nice volume last week. Looking for possible breakout here.

PPHM -  .70 was previous support and now resistance.  If it moves though with volume, I way swing.

TELK – I like it.  Yes, it released news Friday morning about basically sold off the rest of the day, but it is now on trendline support and the sell-off was likely from all of the cold feet Friday.  I might swing long if it holds trendline.

COIN might be an interesting swing off trendline support. Needs a volume pop.

CPST – sitting on mild horizontal support and MA50 with turning STO. Looking for support bouce long swing.

ZHNE – Triangle consolidation on MA50 support.  Worth watching for breakout.

NXG – Strong horizontal  and MA50 support. Long swing with stop just under 2.50.

ONTY - Held support Friday. Time to swing back up?

CLDX - gotta watch $ for possible momo breakout tomorrow.

GERN – Can GERN hold horizontal support and MA200 with bottoming Full Sto?

Others (less setup, but worth watching):

XOMA might have bottomed Friday.

CRXX – turning Full Sto.

INO – trading in a box.  Could move, but I worry about H1N1 speculation plays right now.

CHINA – weak horizontal support with trendline support.

Did you feel that?

If you held on to your speculative stocks last week, then you likely got kicked squarely in the frank and beans and find yourself wondering what to do with these positions.  Sure, some bucked the trend, but most gave back a lot of their recent exuberance. The market doesn’t take prisoners and it definitely doesn’t play patty cake with anyone like me – the speculative day/swing trader.

Speculative Stock
A general term describing a stock with high risk relative to any potential positive returns. Speculative stocks are often purchased by those who believe the stock will appreciate in value without performing a detailed analysis.

In the wonderful world of speculating, it really upsets me to witness traders get their ass handed to them on days like Thursday and Friday because they held a spec stock all the way down through a 10% drop, or more. Why would you do that? It’s a spec play, right? It would take a 20% move to the upside just to get your money back.  You didn’t fall in love, did you?

There are,however, good arguments for holding speculative stocks.  For example, if you’ve done your research on a company and believe it has boomin upside potential,  then you’re likely to accumulate more at a discount.  This is more of a long-term approach and requires that you do some digging to truly understand the company so you’re not tossing more good money at a bad investment.  BUT, this is not speculative trading – You are now investing and should be treated differently.   SG discusses his opinions on SYNM, for example, after doing extensive research.

I rarely know all the details of a individual company and am a short-term trader.  So, I only hold a spec stock as long as it is still technically supportive of the original setup… hell, the company might be going bankrupt for all I know.  As a swing/day trader, there isn’t such a thing as ‘hoping’ a spec stock will recover – formula for disaster and an ugly divorce.

Few thoughts on long scalp/swing trading in bear markets (again, all speculative trades):

• I don’t know enough about the company to hold them as their price drops, just to blindly hope it will bounce back.
• The more bearish the day, the less time I intend to hold long trades.  If I position myself long in a spec, I’m looking for an intraday move so I can scalp that bad boy.  If it doesn’t move, I will likely not go to bed with it and I’ll try something new tomorrow – highly speculative stocks can have an entirely new face in the morning (reminds me of college).
• I spend more time looking for support levels in stocks (daily and weekly charts) and less time on breakout setups.  For the few stocks I’m willing to swing long in bear markets, I make sure that I’m entering on strong support and reduce the exposure to stocks with high volatility.
• Tighten up the stops.
• Increase cash.
• Scalp more, swing less.

Rules applied to how I played Friday:

• Bought CNO on the way up at $4.72 after it held horizontal support near 4.50..  Sold at MA20 (resistance, previous support).  Scalp. 7.5% profit.  Had it moved down from my entry, I would have sold near 4.50
• Bought GKK after it held horizontal support on the volume move up past Thursday’s close.  Overall chart remained generally bearish, so I quickly scalped a nice profit of 8%.  Ultimately, GKK finished down.  Again, spec plays on down days reduces my hold time  – quick profits.
• Mid-day I bought RFMD for my longer-term trading account. This was a horizontal support buy on a chart that has been trending steadily up for months.  Tight stop under 4.50, but swinging up from here is the goal.

That’s it – that’s the extent of my trades from Friday.  I do have some other positions exposed into Monday, but I’m heavily in cash and comfortable with RFMD.

Good luck next week and don’t forget… don’t fall in love unless you really know her. Otherwise, keep the tight stops on those spec trades and don’t go to bed with her unless you’re comfortable waking up next to her (she might look like a bear in the morning).

After last week’s bearish finish, I find myself heavily in cash, but still holding a few small positions. Day trading / scalping / and short term swings are my gig, so I approach the market with a ‘what can you do for me now’ mentality.

On Wednesday, we saw a spike in the DOW up over 9900 as bulls begged for the psychologically beneficial 10000 mark. However, like many nights I spent hitting on ladies in dark smoky bars, the bulls were slapped down and told to take a seat somewhere else.

Bullish or bearish Monday? I won’t dare try to predict. I would much rather get ready for what the market gives me and play accordingly.

First things, first… what’s on the economic calendar that could punish or boost the overall market sentiment? From the trusty Bloomberg Calendar, I see quite a few reports that could rattle some cages. The big nasty being Consumer Confidence at 10AM ET on Tuesday. The other monster number will come out of the GDP and Chicago PMI reports on Wednesday. All of these reports are in the morning and as a trader of very volatile securities, I will likely be very heavily positioned in cash Monday and Tuesday nights. As the reports release, I’ll take what I’m given.

Ok, enough about the calendar -let’s talk about Monday setups.

Here are a few stocks I’m eyeballing Monday:

ARIA – fairly oversold and now sitting on MA50 support.

INO – Another stock that’s been hit hard lately sitting on support. Could fall through the gap or find some stability here for swing long.

TTEK may have found some love on MA200.

ONTY – Watching trendline support. Possible swing long.

AOB - Sitting on horizontal support.

SCLN may have found some support on $4.00

CYTR – Watching for move above 1.21.

PTN – bottom of channel, possible long swing.

GSAT sitting on .79 support with very tight bollinger bands. could go either direction.

CMZ - nice bounce off MA50 on Friday with volume.

NVD - Watching against horizontal resistance at .28 with improving volume.

I’ll add more if I have time later this evening.

Man, oh, man things have worked out wonderfully on the Watch List this week. Hope you had an opportunity to get involved.. more added soon.
Watch List Update:

VVTV up 8% since add

XOMA – blah – nothing happening here yet.

VTG – Got the MA50 breakout today – up 10% since add.

CHINA – this was an early week flyer – up over 20%

SONS – Got a 9% gain breakout over 2.15

WAVE – HUGE BREAKOUT today, up over 19%.

ASTM and KOOL just hanging around. Watching.

CEGE still watching.

MI – Up over 17% since add.

URRE – KABOOOOOOOOOM – up over 30% since add.

SBLK and FREE both up over 12%

LVLT shot up over 21% since add.

PWER – up over 15% since add.

AGEN – just watching. Likely pulling from the WL soon if it doesn’t move.