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Thursday, January 22, 2009 

Trade Ideas for Friday - JDSU and DRYS

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

DRYS - The stock broke a rising wedge last week, and has potential downside to 8.80. To the upside, the lower boundary of the broken rising wedge is now around 15-16, and above that is 17.35 resistance. Any significant break below the 8.80 level in the weeks ahead wouldn't be good as the next level of major support appears to beat 5.90. Looking at the technical daily chart, it shows very bearish sign as the 50 day moving average has crossed below 200 day moving average around mid August to form Death Cross a strong sell signal. In addition other technical indicators such as MACD and KD also show sell signal as MACD is below signal line and K line is dropping below D line.

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

JDSU - Although the moving averages ( 5, 13, 20 ) have held up fairly well so far this month an analysis of their chart patterns reveal some potential trouble may lie ahead. The stock did break above its 20 Day Moving Average this week but ran into strong resistance at its 13 dma near 4.15. Meanwhile it appears the stock may be forming a Head and Shoulders Top pattern with the two Shoulders defined by points A and B. The left shoulder was established between 3.40 lows and 4.12 highs. The head was established between 4 lows and 5.30 highs. The right shoulder has developed between 4.13 highs and 3.35 lows. The all-important neckline is at 3.35. Any close below this level will trigger a sell-off, which is going to be very strong and we might see resumption of a strong bearish phase.

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 !!!

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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