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Trading: Stock Setups To Profit By



November 08, 2011 – Comments (0) | RELATED TICKERS: SPY , AAPL , FSLR

European news leaks continue to whip the markets up and down. Early in the day, word of a major vote in Italy on a budget drove the markets higher. Hopes of a significant resolution to the Italian debt problems circled in the air. While Berlusconi won the vote, the parliamentary majority was lost. This means any sort of political effort towards a major bailout deal could be a tough fight. The markets initially spiked higher ahead of the vote but sold off as deadlock looks to be the end game in Italy.

The markets are hovering around the flat line. The SPDR S&P 500 ETF (NYSEARCA:SPY) is trading at $126.21, -0.07 (-0.06%). With all the European news constantly shaking the market, it becomes slightly tougher to trade. An investor must always resort to the charts to see the truth, ignoring the hype from the media.

There are three key stocks that look to be the trades of the day. First, Apple Inc. (NASDAQ:AAPL) is showing strength. In the last few trading days, Apple has been one of the weaker plays. Today, that is reversing. Whether or not it is going to continue higher can be seen on the charts. Should Apple close above the daily 20 moving average at $404.25, it will most likely head to $409.00. As long as it stays below $409.00 the overall bias is neutral. A break of $409.00, it will head back to the 52 week highs at $426.70. Should the stock stay below $404.25 on a closing basis today, consider it a short over the next few days.

First Solar, Inc. (NASDAQ:FSLR) continues to be under pressure, trading at $47.15, -0.59 (-1.24%) . The bearish sentiment on the solar industry continues to be huge. The weakness today continues to elude to the fact that FSLR has more downside. The first major support level worth buying is at $40.00. There will be significant upside eventually on all solar names as bearish sentiment is nearing its highs. The key is to nail the bottom perfectly.

Lastly, a small cap to throw in the mix is Delta Petroleum Corp. (NASDAQ:DPTR) . This is a small oil and gas company trading at 52 week lows. The company is eyeing a sale and based on its current valuation, the upside potential is big. Crude oil is closing back on the $100.00 per barrel level which also sweetens the pot. In addition, other small cap oil plays have already started to move sharply higher. This is a high risk play but may be good for significant upside.

Gareth Soloway

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