Playing both sides

Consensus is calling for sideways action in the broad markets (138-145 for SPY, 46-51 for QQQQ) for the next few weeks but that doesn't mean you have to sit on the sidelines. I still like the idea of selling OTM credit spreads on SPY and ETFs, for example, but there are a lot of other opportunities out there on individual stocks. Here are a few thoughts for the short-term...

Apache Corp (APA) - breakout
Devon Energy (DVN) - breakout
AK Steel Corp (AKS) - breakout / recent bounce off 20 day MA
Research in Motion (RIMM) - breakout, possible consolidation before heading higher
Apple Inc (AAPL) - pullback / found support at 20 day MA
Halliburton Inc (HAL) - breakout
Exxon Mobil (XOM) - ascending triangle




Valero (VLO) - in a downtrend / overbought
Lehman Bros (LEH) - breakdown
Dryships (DRYS) - broke trendline / look to the 20 day MA for support - still very strong, just got overextended.







I like AAPLs chances of revisiting 200 by Q3. Consider picking up some OTM OCT Calls.

SPY | RIMM | LEH | IBM | HAL | FLR | DRYS | DOW

Another close above 1400 today - a meaningless milestone. The S&P has been chopping through this level since April 28th so it doesn't seem to be as significant as once thought. While the roundedness of 1400 may get a lot of attention, perhaps the trendlines shown below will prove to be more significant.


Here are some more thoughts...









A lot of nice setups but some will require patience. I would wait for a small pullback in DRYS, for example, before going long. Same with RIMM (especially with what's happening in after hours). These are up 5.5% and 7% today respectively, so while the setup still looks nice it's probably not the best point for entry. DOW is also getting overbought (2 day RSI of 93.5). I'll have some specific trade suggestions as this week unfolds.