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Thursday, November 06, 2008 

Stock Picks and Trade Ideas for Friday - HPQ, GM, LDK

Nobody can predict the dimension of the crisis that affects the economy around the world. It was a surprise for many of us, the bankruptcies that have happened and probably those that will follow. This situation is affecting all business decisions, no one has the sense of how to go and where to go. Never, in the recent past, were in that situation. All of us wondering how it was possible to reach such a severe and rapid situation. Today, more bad news were announced by the The International Monetary Fund. It has lowered the projections for global economic growth in 2009. "The outlook for global growth deteriorated in the last month," pointing to a contraction in the economies of the United States, Japan and the euro zone next year. The US economy will shrink 0.7%, Japan 0.2% and the euro zone will suffer a contraction of 0.5%. A month ago, the IMF predicted in its World Economic Outlook ", an expansion in these three regions, 0.1% in the U.S., Japan 0.5% and 0.2% in the euro zone, but now the scenario is much worse. In advanced economies, the contraction expected to GDP in 2009 will be the first since the post-war ", citing the IMF,but these projections are made on the basis of current policies worldwide and that global action in support of the financial markets and give greater fiscal stimulus and monetary relief may help limit the decline in global growth. It will be fair to say that the worst is yet to come.

Chart courtesy of www.stockcharts.com ( click to enlarge )

HPQ - Hewlett-Packard remains in a downtrend and below its October high. There are signs of support around 32-32.5, but no signs of buying pressure. HPQ needs to break above 42 to reverse the current downtrend and revive the stock. I am also watching RSI, which has been trending lower the last few weeks. RSI needs to move above the red trendline extending down from late September to turn momentum bullish.

Chart courtesy of www.stockcharts.com ( click to enlarge )

GM - The near-term outlook is very bearish and the stock could drop to the $4-$4.20 range. Investors who are holding profitable position, may consider selling a portion of their holdings now, because the stock is trading in a dangerous technical situation and you’re hoping and hoping and the stock continues moving lower and lower. The stock is already trading near its October lows and showing relative weakness. The strong support is only at $4.

Chart courtesy of www.stockcharts.com ( click to enlarge )

LDK - This stock is currently correcting the entire up-move recorded since late October. The short-term supports for the stock exist at $17.77 and then at $17.50. The near-term outlook for the stock is negative as it is currently below its long-term average line and is recording a sequence of lower peaks and troughs. This denotes a high selling pressure every time the stock attempts to move higher. You can hold the stock with a stop at $17.50. Technically Bearish.

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 Tomorrow !!!


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About Me

  • I'm a 48 year old Independent Trader using proprietary technical analysis with more than 20 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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