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Saturday, September 13, 2008 

Global Financial crisis and some Trade Ideas for next week

The financial crisis catapulted the financial markets for the worst period of the decade. For more than a year that the financial markets are living depressed times due to the growing pessimism among investors in the face of problems, no end in sight in the financial sector, the "brake" of the economies and the expectation of worsening results among the big companies. The losses in small and large investors have been brutal over the last months, especially for those who had betting in long positions since October of 2007. Twelve months later, we have almost all indices testing the lows. But nor always we should look for the falling markets as a synonymous of losses. There are lot of people worldwide that have made big fortunes with the deception of others. For those who in October 2007 invested in short positions, just in the beginning of the current crisis, can now collect capital gains exceeding 65% as a whole. It has been good times for bears and bad times for bulls, and now? Where we go…….. Technical and fundamental indicators still not showing brilliant signs, but I start seeing some light in the end of the tunnel with the end of the actual presidency. In addition, the election time always brought signs of change; therefore it's hard to believe in a new period of disbelief and economic pessimism. Let’s see what the next 12 months will bring to the market. I’m betting for a new wave of growing, it could take some time to assimilate but I'm sure it will start next year. There sure is a lot of money on the sidelines and a lot of talk of the yearend rally.

Chart courtesy of stockcharts ( click to enlarge )

Juniper Networks (JNPR) has already recouped its recent losses and looks poised to break resistance at 26.50. The technical chart shows positive sign as the stock has been on the upside since late July and the stock has been above the 50-day moving average since that date. A few more positive session could bring MACD back above 0 meaning bull market. Stay tuned on JNPR.

Chart courtesy of stockcharts ( click to enlarge )

CNTF - Daily chart above shows that it is still to early to say that the downtrend has ended.

Chart courtesy of stockcharts ( click to enlarge )

HLX - Broken supports turns into resistance. Stock needs to break $28.47 to turn bullish.

Chart courtesy of stockcharts ( click to enlarge )

CIEN - Looking at the daily chart, it shows weak sign as the stock is still trading below 50 day and 200 day moving average. Another weak sign is MACD which is still below 0. On the other hand, ROC shows the stock is oversold and with volumn spiked as K line crossed on top of D line this is probalby the time that the stock would finally reverse the downtrend. I'm still Bullish on CIENA.

Disclaimer : Trading stocks involves risk, this information should not be viewed as trading recommendations.The charts provided here are not meant for investment purposes and only serve as technical examples.

That's All. See you Monday !!!

AC

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Some good hardcore technical analysis. Remember, even with all the technicals lined up perfectly, non-market news - like the hurricane - can have a major impact on the markets and blow your analysis to hell. Not to mention market related news, like LH. If LH can get a deal for a sale this weekend, then Monday morning might see the first real sell off of the "financial panic". I am optimistic, but realistic. Keep up the good work.

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  • I'm a 43 year old Independent Trader using proprietary technical analysis with more than 18 years experience of investing in the US stock markets. I started this blog in 2006 simply as a way to share my thoughts about capital, risk management, and trading. My blog contains only my personal opinion and is provided for informational purposes only.

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