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Friday September 05, 2008 |
Bedford's
Tradecraft Recent Sample Issue
Bedford's
Tradecraft
INSIGHT FOR ACTIVE TRADERS
January 11, 2006
Volume 02, Issue 07
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Support
Levels |
Resistance
Levels |
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Close |
S1 |
S2 |
S3 |
R1 |
R2 |
R3 |
| DOW |
11011.58 |
10835.10 |
10683.10 |
10552.40 |
11250.40 |
11428.90 |
11500.00 |
| OEX |
586.10 |
571.40 |
573.30 |
571.10 |
598.00 |
601.60 |
605.90 |
| SPX |
1289.69 |
1283.30 |
1275.80 |
1264.10 |
1317.30 |
1367.80 |
1381.50 |
| OTC |
2320.32 |
2278.10 |
2247.00 |
2219.30 |
2330.10 |
2645.50 |
2890.30 |
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All of yesterday was impressive.
There was every reason for stocks to collapse or at least trade
lower. It's true, there were brief periods of weakness but
volume was light and for all intents and purposes, it was a very
good session for bulls. I have not been a huge bull because
I have not been impressed with leadership but even those concerns
are abating. The reason is that technology remains rock
solid and banks and brokers are beginning to really improve.
Technology has been championed all year by impressive gains from
the likes of Apple Computer (AAPL) and Google (GOOG). It's
interesting in that Apple Computer has been one of the terrible
stocks of the late 1990's. In that era Intel (INTC) and
Microsoft (MSFT) were eating their lunch with a product that
people clearly favored. Yesterday Apple announced that it
had teamed with Intel to build a new PowerBook laptop
computer but more important, Apple announced that it had sold a
mind-boggling 14 million iPods during the most recent quarter.
That is huge. It is that type of anecdotal information that
is giving traders confidence that consumer spending is solid.
Is the consumer still strong? I don't know, secretly I doubt
it -- but they are definitely buying iPods. And, despite all
of the hand wringing, that is the way to look at things.
Apple iPod sales only really tell us about iPod sales. We
don't have any new relevant information about the consumer but
that is not important, at least, not yet. What is important
is sentiment and that is very bullish. I'm still a buyer of
any near weakness. I'll have more on this later as I explore
the hourly chart.
Today's Radar List
Netease.com (NTES) is a Chinese
Internet stock with huge potential. The stock recently
collapsed after a poor earnings report. Since that time
there has been consolidation and a new upside breakout through
both the 50 and 200-day moving averages. I'll buy a
pullback.
CNOOC Ltd. (CEO) is the largest
offshore driller of crude oil and natural gas offshore China.
The stock had a nice rally yesterday on very much improved volume.
The old high is 76 and that is definitely in-play -- although a
new high is very possible. This larger cup with handle
pattern should be explosive.
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| Symbol |
Name |
Pattern |
Price |
Pivot |
Target |
Stop |
% |
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NTES
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Netease
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69.48
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64 |
80 |
59 |
-
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CEO
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CNOOC Ltd.
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Cup
with Handle
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73.58
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72 |
80 |
69.10 |
-
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A Look at the Hourly Chart
If I'm not mistaken, that is a perfect bull flag that I see
taking shape. If bulls can get through SPX 1,290 and stay there look for
another wave of short covering. I was hoping to get a pullback into the
20-hour moving average but that may now be wishful thinking. I want to see
how bulls behave on any early breakout.
Short Term Option Positions
VLO was a nice trade yesterday. I'm a very big fan of energy and I
will be looking for another entry level. Today will bring the oil
inventories data and with weather recently unseasonably warm, we should get
weaker than expected builds. That could give me an opportunity to add
energy stocks that are really trading on the geopolitics of the Iran/Israel
conflict.
| Position |
Buy |
Current |
Target |
Stop |
Gain/(Loss) |
| 10
URBN
JAN 25C
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3.30 |
3.60 |
7.00 |
2.10 |
300 |
| *
reflects closing transaction |
Open Profits |
300
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(s) reflects a short sale |
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TOTAL PROFITS THIS WEEK $2,600
The above mentioned recommendations are deemed accurate
they are not guaranteed nor can it be said that these strategies or recommendations will
result in a profit. The Principals of the Bedford's
Tradecraft may have or may in the
future have positions in the securities mentioned above. Past performance is not
necessarily indicative of future results. Before trading options you should understand the
risks including the fact that when an option is purchased the entire premium is at risk.
In addition, anytime an option is purchased or sold, transaction costs including brokerage
fees are at risk. No representation is made that any account is likely to achieve profits
or losses similar to those shown, or in any amount. Any account may experience different
results depending on factors such as timing of trades and account size. Bedford &
Associates does not offer refunds for subscriptions in whole or in part.
Copyright
© 200 6 Bedford & Associates Research Group
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