YHOO- Is it a good trading opportunity today?

YHOO- Yahoo stock.
A nice Flag pattern. Can be traded with a proper stoploss. Looks stock is also making a new recent High. A gap on Monday can be expected. If that happens, target would be $20.74

DAL (Delta Airlines) -FLAG/Pennant pattern: On its way to $12?

DAL: Delta Airlines stock is forming a Pennant/Flag pattern.
The DAL stock jumped from around 6.xx to 9.xx in a sudden move with high volume. Since then it is trading in a narrow range which is getting narrower on a declining volume.

Nice Call options play or a trading opportunity with a stop loss around 8.79/8.49 level.


The stock is in an accelerated upward move so I would keep an eye on any Open with a gap.

SIRI- Another big move is coming

SIRI- Sirius XM Satellite Radio- After a nice upward move from from 37 cents to 78 cents, the stock is trading in narrower and narrower band. Most recently it seems to be stuck in 65 to70 cents band. The volume is also slowing down- so the tough battle between sellers and buyers in this field (band of 65 to 70 cents) is becoming decisive...one group is going to emerge as a winner shortly. Bias is towards an up-move.

The best trading strategy in such situation where we know- a move is coming but the chart is not decisive about the direction- is buying options- call options at 70 and buying put options at 65. However there are no options for SIRI at this moment.

The safer trading strategy is watch out for a breakout (which most probably will happen with a gap in prices) and jump on.

The aggressive strategy is to trade now but never lose sight of the stoploss (Duh, not only here but every time, a trader who is trading for a short-term movement can not afford to ignore stop-loss)

I am watching for 2 things- breakout above 70 or below 65 WITH jump in volume.

MESA: Mesa Air Group (NASDAQ: MESA): Watch this stock

MESA Air Group (Stock: MESA):

Nice patterns. The resistance line broken on high volume. A flag pattern on high volume. Volume going down now. To complete the Flag pattern, it might give another jump of 15 cents (similar to it going up from 16 cents to 30 cents.

Current price 24 cents. Stoploss at 2o or 22 cents.

SIRI: Sirius XM Satellite:

On the daily stock price chart, there is a Head and Shoulders inverted pattern with a small Flag recently. With a 3 cents risk, it can be traded for a quick move from current level of 50 cents to 68 cents or so.
SIRI on a Weekly price chart:

Cup and Saucer is a technical pattern and good trading opportunitiy. This usually takes place after some tiring (read as boring) period for the stock. Sirius XM Radio as shown below has the pattern in making with a nice saucer and a handle formation. At the current rate of $0.50, this can be traded with a 5 cents risk (stoploss @45 cents)

As always, a stoploss is strongly recommended.

MGM: A strong trend reversal/resumption signal

MGM: fundamentally a risky stock in current economic environment. MGM Mirage is a company with significant debt and most of its properties are in Las Vegas which is feeling the pinch of economic downturn. So there is no surprise that the stock is tanking. From a high of around $100 in Oct-07, it touched a low of less than $2 few months ago. Then they got some new funds, had a secondary offering and offering to some Korean company. This can reduce some imminent risk for bankruptcy.


Anyway, we do not talk fundamentals on this blog but just wanted to highlight that this is a high risk stock so keep a stoploss if someone decides to jump on it.

Now technically, todays ago, there was a strong JUMP START signal. The stock climbed from less than $2 to $14 over March to early May-09 and then got into a downtrend which resulted in give-back of 72% of the gain. Now the JUMP START can be used as a trading opportunity with a strict stoploss at the low of $5.51. Critical will be to see if the stock is able to make a new recent high and goes above $14.

For PFP students, the stock did have a JUMP START as shown in blue which failed. However this time, the stock has managed to close higher on the next day (I mean today) so this is a good confirmation for our signal.

Do not forget to keep a stoploss if someone decides to get in.

Analysis of Bear Markets

This is reproduced from my personal website. For full details, click here:Analysis of Bear Markets

There was an interesting article in Wall Street Journal on 24th of March,2001 or so. It attempted to analyse a bear market from sentimental point of view. I agree with them and thought you all might like it too. So keeping the original idea, I am adding most of the thoughts of my own. So please read on:

There are usually three phases, with more or less intensity, in any bear market: Denial, Reality and Surrender.

Denial: When a bear market starts, people deny it. They really don't believe (or at least don't want to believe) that market has turned down. They relate it to previous minor reactions that market had over past couple of years and how market bounced from there every time to make new highs later on. So they are sure that there is no bear market in sight. They keep on buying more and more. They even make fun of anyone who mentions a possibility of a long bear market.
This is the time during which they spend disproportionately more time with CNBC, stock-market related publications like Investor's Business Daily, or on Internet sites doing investment 'research'.
Psychologically, this phase is of somewhat arrogance, overconfidence and adventure. They still think of profit, maybe much more profit than they initially hoped for because of the opportunity to buy at lower prices. In light sense, they are still under the world's smartest man syndrome, with just little doubt building up on the horizon. (Ask yourself: Were you in that kind of mind-frame most of year 2000?)

Reality: However, the long sustained downtrend in stock prices and bear market confirmations by analysts and media (and the value of their own portfolio) forces them for a very hard acceptance of reality. Now they accept the painful reality. But the pain is not that severe; they still have hope for making up the losses (profit is now so distant they have to abandon even a thought of it). Losses are accumulating so fast, so the thought of break-even is more dominant than an idea about any profit. The pain keeps on getting severe. CNBC and Nightly Business Report on TV start getting on the sideline, time being spent researching on yahoo or reading publications like Investor's Business Daily is cut down.
So psychologically, this is a stage of piling up frustration, tension, stress but deep buried inside, there is still some hope. Now most of the investors kind of decide that they would quit the market once they break-even. They accept the ‘reality’ that markets are crazy and they are not for them. (Ask yourself: are you in that mind frame currently when NASDAQ is hovering around 1800s?)

Surrender: Now a days, you rarely watch CNBC or go to Yahoo! Finance or read Investor's Business Daily for research. The growing pain of reality starts becoming unbearable. The prices are dropping very rapidly and have reduced your portfolio value to levels you never imagined. You have little liquidity left. If you are not balanced by nature and if ambitions and confidence have been your biggest assets so far, you are in more danger. Your very base is shaken. You are angry with yourself; but you want to blame someone else (Rajanish once said, ”It is human to err; but it is even more human to pass on the blame of your errors on someone else”.). Not only money, but also your relationship with your near and dear ones is at risk. Your spouse and your children hopelessly see a different you- irritated, getting mad for no obvious reason, ‘leave me alone’ type of person.
There is no hope for any recovery; you abandon all thoughts of stock prices going up in near to long future (if not, ever). Market downtrend seems as much a sure thing as the up-trend sounded when the bull market was at its peak. Then the ‘prudence’ strikes us: save whatever you can when the whole ship is sinking. So guess what? We sell all those stocks we have been holding on during all that painful period. We feel relived and we are out of the game (with a serious mind not to reenter again in life time). This is called the distress selling and usually a bottom of the bear market.

(Even though how determined you are to quit the game, sooner or later, the rising stock prices of the next bull market would let those emotions take hold of yourself once more and the addiction of the stock market (which had been such a integral part of your life and even your personality during those years of last bull market and very painful bear market thereafter) will bring you back in the game. This is true for 95% people. If so, then why not play it like a game, raising ourselves above those misleading emotions? Only request: keep learning. Keep a diary of your thoughts periodically and watch yourself at each step. )

Take my words: This is the story of not only yourself; it is mine, your friends’ and even those 95% of people who work on wall street, including analysts.

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