HOT list update - added some new ones

Here we go Sunday’s update on the HOT list

If have added some new stocks to the list including the ones that I think the beginner credit spread trader should trade - some of the Index stocks such as OEX, SPY, and QQQQ. These are great and some times you can make a larger profit with less risk especially on the OEX!

Lets go through the list -

OEX - technicals look great for opening a trade tomorrow! After the significant drop on Friday the index plunged through the 30 dma and the 50 dma and now sits just above support of 570. MACD and Stoch are both indicating sell. So I may put on a BEAR call spread using 585 as a resistance line selling either the 585 or for a less risky trade but less profit selling the 590 strike. I will wait and see what the first hour brings to the market.

SPY - Similar to the OEX only support is 125 and the resistance point I would use is 128.

QQQQ - Blew right through support of 42 and through the 30 dma and the 50 dma, MACD and Stoch are showing sell. We could do a Bear Call Spread using 42 or 43 as our resistance points.

AMZN - I am actually in a Bear Call Spread on this stock with a FEB 50 strike price. 50 has been a very good resistance and the stock would have to increase and pass through the 50 dma and the 30 dma before even reaching the $50 mark. MACD and Stoch have been oversold for awhile so we are due for an upswing but I do not believe this stock will manage to break above 46 as this is the next resistance point.

AAPL - took a hard hit last week. It is now sitting on the 30dma with MACD and Stoch starting down towards sell. We will need to wait and see what happens if this breaks through the 30 dma or if it bounces.

PLCE - keeps falling. It is down below the 200 dma and if there is no good news for this stock it may just stay there. Good for me as I have a Bear Call Spread at the FEB 50 strike.

CMI - still in a bull flag pattern and with Fridays drop it still stayed above support at 93. We will need to wait and see what happens.

CVTX - This stock withstood the crash of Friday and actually increased by 65 cents to close just below the 30dma, it did manage to break back into the wedge channel between the 30 dma and the 200 dma. This one may explode, but it has a long way to go to close above 30 which is where my FEB Bear Call Spread is at.

GOOG - Boy am I glad I waited for earnings before putting on the JAN Bull Put Spread on this one. Talk about tanking! In 3 days it lost 68 points! It is sitting right at the 400 support so we will wait and see what happens with this stock.

HAL - another gainer most likely because Halliburton is heavily involved in the oil industry and oil is fast approaching the record high. If no news comes out about oil this week then oil price should drop as it is near resistance. If it does I am going to see what HAL does. This does have a good support at 68. Maybe a Bull Put spread. It also has some support at 70 as well.

MGM - another winner, a 12% gain without commissions. This stock is so far away now from 40 that it is not worth the 40/45 trade. Selling the 40 and buying the 45 only nets a 6% gain. While this is good there are better trades out there, but this one would probably be pretty safe.

NFLX - this one is here because it is an anomoly. It has a very high volatility however the stock does not seem to live the volatility it has. It has good resistance at 30. With the volatility so high the option prices are high this is good for the selling side but bad for the buying side. There may be a trade coming soon with the drop in price from Friday. I will watch and see. This is a much more risky stock than all the others here.

THOR - Waiting and watching. I really want to get back into a calendar call spread and my opportunity should come soon as the stock dropped with the rest of the market on Friday. Looking for a $20 or $22.50 long term (LEAP type) call and then sell the $22.50 or $25.00 current month call, and the following, and the following, until I am called out or the profit is twice what the sold call would bring.

UNH - well not what I expected from one of my picks for 2006. I thought that UNH would hold at 60 and then rebound. I was wrong. Now I will watch and re-evaluate this stock. It may even come off the HOT list, but we shall see.

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What a DROP!!! in the DOW

I knew that the DOW and the S&P did not break the resistance levels for holding or reversing directions on Thursday, but I did not expect the drop seen in the stock market on Friday!

My open positions were fine as I had all Bear Call Spreads, however CVTX did gain. Even in all the turmoil of the markets some stocks will still gain ground.

Full HOT list discussion tomorrow.

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What a comeback!

The Nasdaq gained all that was lost the day before to close right above 2300, amazing!

Howeve the Dow and the S&P were not able to stage as good of a comeback both closing below the values I would consider as a good comeback. I would like to see the Dow over 10,900 and strongly heading towards 11,000 and the S&P to be over 1290. We shall see what tomorrow brings.

UNH had good earnings but was unable to capitalize and get above the 50dma.

CVTX tried to make a run today but failed. It got as high as $25 and then fell dramatically back to just above $24 still below the 200 dma.

GOOG and APPL both had miserable days which makes these prime targets for buying soon!!

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Stock HOT list and market info

Well the markets are all at or near support. The big story is the NASDAQ with the tech stocks taking a big hit today. Hopefully with the good news from AMD the index will rebound tomorrow.

DOW support - 10,750 and resistance - 11,000
NASDAQ support - 2275 no real resistance point set yet. If it manages to get back above 2300 I’ll be bullish again.
S&P 500 - support 1275 bullish at 1290 or above.

UNH - after the downgrade this stock has been having a difficult time breaking back above the 50 dma. I am waiting and watching this one. Still a great stock pick for 2006.

CMI - a Lincoln’s Hat (open and close about even with a high intraday high and a small intraday low - looks like Lincons hat) today indicates a trend reversal to the downside. With MACD and Stoch both heading lower I see this stock pulling back some; however it sits right at a trend line support, so we shall see. To muddy the waters a little bit the stock was up 1.40 in afterhours trading!

GOOG - BAD DAY today, expect a continuation to the 30 dma (433) then watch for earnings on Jan 31 and a conference call the next day to move this stock back up!

THOR - still surprising me. This stock had an up day on good volume. The 30dma is closing in on 22.50, next week I will consider another calendar call spread using 22.50 as the base call and selling the 25, not exactly the entry signals I would like so I may wait.

MGM - bouncing around the 30 dma the last two days. This stock will have to increase by 7.5% in the next two days in order for my credit spread to go bad. I don’t think this will happen.

AAPL - down with the tech stocks today especially since it has a deal going with INTEL. It was due for a pull back anyway. Then to top it off it they gave some bad news at the earnings report today, speculating for a soft quarter next quarter. This drove the price down in after hours trading another 2.70 to 79.78. If this holds at the open tomorrow it will be below the 80 support and I expect a continuation due to the turning over of MACD and Stoch to the 30dma at 75.50.

PLCE - blew right past the 200dma on higher volume today. This is very bad for the stock but good news for my Bear Call Credit Spread.

CVTX - another stock that broke through the 200 dma yesterday on higher volume and stayed below today. Another bad sign for this stock but good for my Bear Call Credit Spread.

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