Today's Trade Entries: DUG and AGU

I bought 200 shares of DUG at $46.56. DUG is an ETF that is short oil and gas. Looking at the chart, we see major accumulation and a pullback to a major moving average and price support. Note that this is the opposite of what is happening in the oil service complex. What we are really seeing is major distribution and a weak bounce to resistance levels.



I went short 200 shares of AGU at $62.16. My analysis tells me that many of the agriculture, chemical and farming stocks look toppish right now. I am already short MON, and have added AGU as a short. We've got all the classic signails: topping price pattern, break of support and heavy volume distribution.

Note that shorting this sector is not for the faint of heart. Many still think the sector has legs, and will try to get in on dips. They will likely get burned, but we still could see some bounces. When shorting a momo sector as it looks to be topping, you must manage risk and set logical stop losses.

5 Profitable Energy Charts

Here are 5 interesting energy stocks. I've included longer term charts. Each has a slightly different pattern and can be played in multiple ways.

RIG (Transocean, Inc.) is looking good right now. We've got a support converging at both the breakout point and the 50 day moving average. My only concern is there doesn't look to be heavy accumulation right now. Still, it might be a good low risk play here.



SWN (Southwestern Energy Co.) has been trending and shows a nice accumulation pattern.



DNR (Denbury Resources, Inc.) is the most "iffy" of the group. The trend has been up and down, but if you can catch the right bounce, it has been profitable. It's pulling back to the 50 day moving average.



APA (Apache Corp.) has been trending along the 50 day moving average and shows decent accumulation.



ARD has been digesting some major gains, but could be a nice play around the 50 day moving average.



I see some low risk, high reward plays here, as long as the entry is timed correctly.

Boone Pickens on Oil

No surprise here, oil tycoon Boone Pickens is an oil bull. According to Mr. Pickens, we are not near a top, although there could be a short term correction. I'm looking to buy on a pullback to the mid 70 range.



MT Trade

Building a Better Watchlist

ZUMZ Bullish Englulfing Pattern, Steel, Energy and the UFC

I entered ZUMZ yesterday on a pullback to support, and today it looks as though we have confirmation that the stock is going to bounce. ZUMZ printed a bullish engulfing pattern where three areas of support converged (the 50 day moving average, price and gap support). I could not have hoped for anything better.

Conservative traders would argue that yesterday's entry was risky. The safe way to have played ZUMZ would have been to place the stock on your watchlist as it moved to support, and entered only after they type of bullish confirmation signal we received today.


Steel and Energy stocks are high priorities on my watchlist. The two sectors are finally pulling back, albeit after parabolic moves up. STLD, RIO, PDE, VLO, HOC, MT, XTO and DNR are a few of my favorites right now. I've also added two new stocks to the breakout-pullback watchlist.

Off-Topic:
As many of you already know, I am a huge UFC and boxing fan. Saturday night, UFC is showing a good match-up free on SpikeTV. Mirko Cro-Cop against Gabriel Gonzaga. Mirko is known to unleash some of the most lethal kicks in mixed martial arts. Check out the teaser:

Sector Spotlight: Energy - Part 1

Energy stocks having been on fire. While it's too early to tell, I suspect we may be in the midst of resuming a multi-year energy bull market. I certainly don't want to miss the boat if this is true, so I skipped my usual Saturday nap (after playing tennis or basketball) and reviewed over 300 energy charts. Here are the top 30 energy stocks that I will be watching in the near future, along with my entry point notes (pb means pullback and bo means breakout).

Oil Drillers:
PDE - pb 30
ATLS - pb 54
GSF - pb 60 or bo 63
HP - pb 29
RIG - pb 80 or bo 83
ESV - pb 52
ATW - pb 52
PKD - pb 9

Oil Refining:
SVN - pb 69-70
HOC - pb 57-58
HES - bo 56
WNR - very extended
DK - pb 17

Oil Pipelines:
KMP - pb 51
TPP - pb 42-43
PAA - pb 56

Oil Equipment:
SPN - pb 32
SII - pb pb 44-46
NOV - pb 67-72
CAM - pb 58
GMRK - pb 40
TESOF - pb 22

Major Oil:
TOT- now, trendline tag
E - now, trendline tag
XOM
CVX

Independent Oil:
COG - pb 65
DVN - pb 64

In the coming days, possibly tomorrow or Monday, I'll post some of the better looking charts.

Trade Update: QID, QID (not a typo) and VLO

I sold 1000 shares of QID at $56.55 (entry at $53.82) for a $2730 gain (+4.8 %). To be honest, I probably would have held on if it was not for the fact that I had a limit order in place overnight. So I re-entered a few minutes ago.

I bought 500 shares of QID at $55.21. I still think the market has more downside momentum.

I sold 300 shares of RL at $85.45 (entry at $87.10) for a loss of $495 (-1.8%). So much for retail holding up.

I bought 300 shares of VLO at $56.90. My reasons are two fold. First, as a small hedge agaist my shorts. Second, I like the way oil services stocks have held up. If you look at VLO's chart, it looks like a typical pullback after a runup, which is opposite of the plethora of charts that look downright ugly.



Currently my only positions are QID and VLO. This week, I have incurred $3541 in losses and $5675 gains for a total gain of $2134.

I'm thankful that I made it out alive (so far). However, there should me more tough trading days ahead. It's not the time to take big risks or become complacent.

Today's Trades: CAL and USO

I re-entered a 500 share short position in CAL at $41.60. This is an aggressive play, as the stock has not yet broke the forming head and shoulders pattern.

I also bought 500 shares of USO at $46.80. My target is $50, which is just under the 50 day moving average. The MACD and RSI look good, although I am a little concerned about the lack of volume on this upswing, in relation to the volume on the downturn. My gut is telling me to ignore the volume trend becausethe increased volume on the downswing is a sign of capitulation (note that volume during the "meat" of the move was actually quite low), but only time will tell.