Free Swing Trading and Day Trading Picks & Education

These articles describe the statistical probabilities of long positions on these equities, based on neural net projections, for the next 5-15 trading days. These are not holy grail methodologies, the road to easy street, or anything else. These projections are the result of screening for technically significant retracement and momentum patterns that have been further screened for value and bullish sector performance. In other words, the projections are for long positions.

For 04/30/2010:

                                     $INDU       $SPX         $COMPQ    $RUT

Monthly Momentum   Pos (OB)   Pos (OB)     Pos (OB)    Pos (OB)

Weekly Momentum     Neg (OB)   Neg (OB)    Neg (OB)   Neg (OB)

Daily Momentum         Pos            Neg              Pos             Pos

N means neutral, Neg means negative, Pos means positive (OS) means oversold and (OB) means overbought. The value to price estimate (it is not a guarantee, only a cash flow based estimate) can be defined loosely as a multiplier of price. A number higher than one means the stock is undervalued using this model and a number less than one means the stock is overvalued.

Index and ETF I-shares Bullish Reversals (Note: to look up quotes for the Dow Indexes (starting with DJ or DW, add a dollar sign. No dollar sign is required for the ETFs beginning with other letters.) Today’s list includes only those ETFs with a 50-day moving average of daily volume greater than 100,000 shares.

Equity Bullish Reversals

The stocks listed below are ranked by pattern bullish reversals based on a momentum indicator. Each stock by sector is listed with the cheapest stocks on a near-free-cash-flow value/price basis at the top, and more expensive stocks on that basis farther down each sector list (they are listed alphabetically.

Stocks that almost passed the neural net screens but just missed: CALM

U.S. equity markets pressed higher on lower normal or just below normal volume. Insurance, telecom, software, and food stocks were joined today by telecom utilities and oil services and refining. Note also the number of ETFs in natural resources and the Eurozone stocks that hit the reversals list. We do now seem to be recovering from the hard selloff on Monday, but volume, once again, is the real concern for the bulls in the crowd. We need to be careful at all times not to be so secure in any position, short or long, if there is not a strong conviction by traders in the direction that we have chosen to trade.

Here is what passed the neural net screens:

                                   Value/Price EST.       7 day ATR   %( 7 day ATR)/Close

BMC 2.41/1 64.4%          1.90                          0.91                   2.26

Note (O): optionable*

Beta greater than 1.5, Volume greater than 1 million shares on a 50-day simple moving average volume basis.

MOMENTUM INDICATORS on a monthly basis flicker between positive and negative but the DAILY trend continues for now to be generally positive. Again, we could be seeing longer term momentum beginning to show divergence to the downside, so we need to be particularly careful at this juncture.

We still could be seeing seasonality cracks in the post-crash rally, but either way, one needs to stick with one’s trading strategies and not roll the dice. Healthcare, food, and oil and natural resources names seem to be the most favored, and we need to begin watching telecoms, depending on earnings improvements. Manage your stops and targets well. It will help make AND save you money. We still do not know from day to day what will push this market.

Take care,

DBB