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Saturday, November 15, 2008 

The financial world is moving in quicksand

The worst news of the week, Europe in recession !!!!

The economy of the eurozone entered a recession for the first time in 15 years. The GDP in the 15 euro nations shrank 0.2 percent from the previous three months, when it also contracted 0.2 percent, the European Union's Luxembourg-based statistics office said today. The two quarters of contraction, the result of this year's surges in the cost of credit, the euro's rise and oil's jump, inevitably marked the first recession since the Euro was introduced almost a decade ago. Even without a magic ball in front of my eyes, it's clear that Europe and other countries will surfer the deepest recession since 1929. The ECB last week lowered its benchmark rate by a half- point to 3.25 percent, but it is not enough, BCE must cut the rates immediately to 2% or less. The economic climate is extremely difficult in many sectors and the first victims of this slowdown were the Automobile Manufacturers, with the dramatic drop in sales.. According to the European Automobile Manufacturers' Association the European car sales plunged almost 15 percent in October, the sixth monthly decline, and nobody sees positive signs to stop the fall. The financial world is moving in quicksand. Please find below more Trade Ideas for the week ahead.

Chart courtesy of stockcharts ( click to enlarge )

SUN - The stock closed higher Friday, reconfirming the new uptrend after the recent break above the major resistance on expanding volume. Looking at the daily technical chart it shows very bullish sign as the stock is back on top of 50 day moving average. In addition K line is still above D line and MACD above 0, showing bull market. At the moment, it is still possible to see the stock advance a bit further from here, although the resistance at $40 is quite strong and any downturn below $34.60 would probably mean that the highs are already in place. Stay tuned on Sunoco.

Chart courtesy of stockcharts ( click to enlarge )

GOOG - After a sharp upward move on Thursday, the stock failed to close above the major resistance at $310.30 in volatile trade. Technical indicators remain bearish with MACD momentum moving lower in negative territory and RSI trending lower in negative territory. A close below support at $300 will reconfirm the medium-term downtrend and forecast more losses, while a close above resistance in the $312 area would predict a test of congestion resistance near $325.

Chart courtesy of stockcharts ( click to enlarge )

JDSU - Seems like a falling knife scenario to me. Don’t buy it on the way down. The stock could really be near the bottom right now, but it is near impossible to predict the absolute bottom. Any close below support at the long-term low at $2.95 will reconfirm the long-term downtrend and forecast substantial additional losses. The downtrend continuation scenario is now more likely.

Chart courtesy of stockcharts ( click to enlarge )

FSLR - The short-term outlook for First Solar remains bearish and a drop to the $105-110 range appears likely. Short positions may be considered with a price target of $105.50 and a stop-loss at $124.97.

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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I know it's impossible to predict the bottom, so when should we invest in the stocks which are going down, like JDSU?

Hi Friend !!!


This is not the right time to accumulate shares. The volatility is high and confidence is 0. Wait for better times.

AC

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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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