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Robert Edwards
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Contrarian daytrading technician who specializes in locating high probability short term trades while predicting price movement directions with over 85% accuracy. Most of my trading involves either extremely short term micro scalping of stocks or commodities (using 1 minute bar charts), or swing... More
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  • A Review Of Our Favorites: HALO, GDX/NUGT, KING, BITA, TSLA, PBR, CLF

    HALO Needs To Close Above $13.04 To Confirm Bottom

    The above chart comes from Americanbulls.com, click here. Halozyme Therapeutics (NASDAQ:HALO) needs to close in the top half of the first candle body, shown in green on the chart. I calculated the halfway point as $13.04. So a close above $13.04 will get Americanbulls.com out of cash and back into HALO. If we can then trade above this week's high of $13.49, our upside target should be hit $3.75 to $4 above the recent $11.29 low, so we should hit $15 in short order once $13.50 resistance is breached. I will continue to accumulate shares on dips and will keep enjoying the premarket and early trading pops to take profits, as long as the stock wants to continue to provide this type of profit potential.

    GDX/NUGT Formed Bullish Harami Cross Patterns Today

    Again, if you punch in the symbols at Americanbulls.com, you will find that the gold mining ETF (NYSEARCA:GDX) and the leveraged bullish gold mining ETF (NYSEARCA:NUGT), both formed bullish harami cross candlestick patterns today. An up close tomorrow that is above the opening price, will confirm a bottom and buy signal, according to the rules of trading at Americanbulls.com. If gold would just cooperate. June gold futures broke under support at $1280, leaving the 61.8% retracement level of the recent rally from $1181 to $1392 at $1265 as the next support level. Surely we are within 1% of the low and will get a short term bounce in the near term.

    KING Digital Entertainment (NYSE:KING) Bounces Right On Cue

    I was surprised the new IPO King Digital Entertainment (KING) was so poorly received. I guess the company just makes too much money and has too low of a P/E ratio at 11.29, even after today's large gain back to $19.75. Losing money and trading at 500 to 1000 times sales, and Wallstreet probably would have loved the stock. When I researched the stock, I was convinced the game maker was much more than a Candy Crush one-hit-wonder. It appears new games are rolling out every 3 to 6 months so as sales start to taper off on old games, new games should take their place. KING is the "king" of addiction gaming. This company is not Zynga and should not be compared to it. I bought KING the last couple days in the low to mid 18s and enjoyed a nice pop today to $19.75. Motley Fool does not like KING, click here and here, but I figured the stock was a steal at 20% below the IPO price and should trade at the IPO price of $22.50 at least one time, hopefully within the first couple weeks, and should reach some kind of a high, maybe $30 within the first 6 weeks. Now, although I identified a bullish harami pattern on 3/31/14 and loaded up on the stock, and caught a nice Marubozu bullish candle today, click here, after a morning pop and hopefully strong Wednesday, KING will find more resistance as it approaches its 5-day high of $21.39, and major resistance trading above the $22.50 IPO price. Lots of people will cash in near $22.50 breakeven and it may be a long while before that price can be breached. Still, I like the stock under $18.75, but you have to be more careful when buying in above $19.00. When it corrects back down I will definitely be accumulating shares again.

    BITA Broke Out To The Upside Today

    (click to enlarge)

    Until I was reminded by cindywu4 late today, I had not looked at BITA all day and missed the breakout move that can be seen on the above daily chart. If you draw a line off the downtrending highs of $47 and $41.50, that line was broken decisively with today's up move. Also the MACD is about to turn positive. I bought BITA today at $39.20 for a scalp and later decided to carry shares to the next day as it would appear this stock could quickly move to $41 possibly before rolling over or consolidating more. I will be taking some profits on a higher opening but will try to stick with this stock for an eventual retest of the highs.

    Tesla Motors (NASDAQ:TSLA) Formed Bullish One White Soldier Candle Today

    Go to americanbulls.com to see how TSLA formed a bullish one white soldier pattern today, click here. A higher close tomorrow that is above the opening price, will confirm a buy. Over the weekend I advised my son to buy shares at $210 and then sell in the money weekly $210 strike calls expiring this Friday to lock in the profit when TSLA trades above $215. He ended up buying shares at $207.10 and sold $207.50 calls when we traded to $213, locking in over $6,000 profit, buying 800 shares and selling 8 calls. If TSLA closes Friday above $207.50 ($216.97 close today), he will make nearly $8 a share, or just under 4%, in less than a week. He hopes to buy shares and sell in the money weekly calls to lock in the gains, or sell weekly puts in TSLA for income going forward. He got a good start this week.

    Petrobras (NYSE:PBR) Is Looking Toppy, But I Want To Buy The Next DIP

    Go to Americanbulls.com again, you will find that PBR formed a bearish hanging man pattern Monday, and should correct shortly. However, I plan to buy that dip. I can run some numbers once we roll over, to predict where a good buy zone is. However, the gap area from $12.00 to $12.30 would be a great place to reload on this stock. I plan to begin scalping lightly at $12.75 but get serious in the low $12s and back up the truck in the high $11s. If you read my recent PBR articles, I am looking for $15 in this stock before we make a major top. Right now, we are overbought and I prefer to not chase the stock above $13.

    Cliffs Natural Resources (NYSE:CLF) Confirmed The Bearish Doji Star Pattern

    On Friday, 3/28/14, I advised traders to take profits in the $20.20s in CLF and to wait to buy again at least $1 lower. I thought CLF would drop due to being removed from the S&P after the close on 3/31/14. It looks like some weakness is finally coming in today and we might get a move back towards $18.50 to $19.00 by the end of this week. If we do, I might sell some $19.00 puts again, and may scalp some shares from the long side. On today's lower trade, I was successful in buying dips and making several 15 to 20 cent scalps buying and selling 400 shares at a time, and made over $200 which I consider worth the trouble.

    Summary:

    I can earn $1,000 on a good day scalping, but buying stocks on the close that I feel have a good chance of making a morning pop, is where I make my greatest gains. I spend the last hour of trading accumulating inventory to dump in the premarket of the following day. There is an art at finding the right kind of stock, and then having it in the right setup for a pop. Most weeks there are two days where I catch a lucky eye-popping return. Two days I make small gains, and one day is a wash or we open down and I have to work my way out of the trade. The key is to diversify, to buy more shares on weak days and less shares when the day is stronger. The weaker the day has been, the greater chance we get a relief rally on the opening. Also keep cash to average down. Also don't go crazy unless you have outsized gains already in the stock to pad your account if you catch a downdraft. This is definitely a game for professionals, or for those who are truly committed. I am still learning, and getting better by the day.

    Disclosure: I am long HALO, NUGT, BITA, KING, TRTC.

    Apr 01 10:16 PM | Link | 4 Comments
  • Biotech Stocks (HALO & MYGN) Look Poised For A Rebound

    Monday is the last day of March and the end of a quarter that has finally seen a correction in several momentum names including the very hot biotech sector. Biotech stocks have corrected for 4 to 6 weeks, depending on the company. Odds favor ending the losing streak this coming week or definitely the week after that. Despite the severe $43 selloff from its recent high, JAZZ Pharmaceuticals, Inc. (NASDAQ:JAZZ) closed Friday at $133.46, over $33 above the 50 week moving average of $100.75. It remains a leader. Gilead Sciences, Inc. (NASDAQ:GILD) has only closed down 4 weeks but the $68.55 close is just $2.70 above the 50 week moving average. Halozyme Therapeutics, Inc., (NASDAQ:HALO) closed Friday at $12.11, which was significantly above the $11.28 low of the week, and above the 50 week moving average of $10.90. Celgene (NASDAQ:CELG) has fallen for 6 straight weeks and 9 of the last 11 weeks, and at $139.29, it ended $6.60 below the 50 week moving average of $145.89. But even CELG could find support soon around $130.00. The last significant correction that occurred in CELG happened in April 2012, where is also dropped for 11 weeks, and fell 26.7% from $80.42 down to $58.53. The recent high in CELG was $174.66 and a similar correction of 26.7% would project a low of $128.03, about $11 lower than Friday's close. In both time and price, a low in the Biotech stocks appears near.

    I have already written articles about HALO, but this weekend I came across another stock in the sector that looks quite promising: Myriad Genetics, Inc. (NASDAQ:MYGN). Working in molecular diagnostics, MYGN earns $2.32 and trades at a P/E ratio of 14.20. Here is a daily chart of MYGN, showing how it recently rallied from $20.02 to a high of $39.15, in just 8 weeks:

    (click to enlarge)

    This stock has been in a 5 week downtrend since topping out at $29.15, but has only corrected 18%. It is looking like the stock may hold $32 support, but if it is broken, it should not trade below $30, before retesting the highs. There is a weekly gap between $27.18 and $29.10 that should also lend further support on any corrections into that gap beginning at $29.10. I plan to buy some shares of the stock in the low $32s and add down to $29 to $30 should the correction continue longer, in hopes of selling out possibly on a retest of the recent highs.

    Disclaimer:

    The thoughts and opinions in this article, along with all stock talk posts made by Robert Edwards, are my own. I am merely giving my interpretation of market moves as I see them. I am sharing what I am doing in my own trading. Sometimes I am correct, while other times I am wrong. They are not trading recommendations, but just another opinion that one may consider as one does their own due diligence.

    Disclosure: I am long HALO.

    Tags: HALO, MYGN
    Mar 30 10:40 PM | Link | Comment!
  • Don't Bet Against Elon Musk: Upcoming Opportunities In TSLA & SCTY

    I just watched Elon Musk be interviewed on 60 minutes. If you did not catch the interview, you can see it here. The man has a golden touch. You can't invest in SpaceX because the IPO has not come out yet, but you can invest in Tesla and Solar City. The stock price of each has corrected recently so this could be a good time to look at both of the stocks.

    Solar City Has Corrected 35% Off The High

    (click to enlarge)

    The above weekly chart of Solar City shows a stock that is moving up in an upward trajectory. However, the last 4 weeks it has been in a downtrend trend from a high of $88.35 to a low of $56.62. This is the third significant correction SCTY has had since it came public in December 2012. Carter Worth on Options Action, click here, points out that we have just completed our third 35% correction in SCTY and it is a buy. However, the middle correction can be divided into two corrections, so we actually have four corrections of about 35% and not three. The first correction from $52.77 down to $32.66 is a correction of 38.1% that occurred in May/June 2013. That correction lasted 5 weeks. Then it made a lower high of $45.60 in August 2013, and fell $17.29 to $28.31 just 5 weeks later, a drop of 37.9%. Then in October 2013, SCTY topped at $64.50 and then 5 weeks later hit a low of $42.38, a drop of 34.3%. However about halfway along the way, SCTY made a marginal new high at $65.30, a drop of 35.1% to the $42.38 low.

    Now the recent high of $88.35 has so far resulted in a drop in 4 weeks to a low of $56.62, a drop of 35.9%, right in line with previous drops. We don't have to drop any further than what we already have, as we have already met our correction objectives.

    Tesla Motors (NASDAQ:TSLA) Likes To Correct For About Seven Weeks When It Corrects

    (click to enlarge)

    In July 2011, TSLA corrected down for 7 weeks. In early December 2011, TSLA topped out at $35.00 and corrected down for 6 weeks to $22.64. In March 2012, TSLA topped at $39.95 and dropped 7 weeks to $26.83. In July 2012, TSLA topped at $36.00 and dropped to $25.52 within 3 weeks, but remained in a downtrend for 4 more weeks to again make the 7 weeks of correction, but ended at a higher level than the bottom. In September 2012, TSLA made a minor high at $32.78, and fell for 6 weeks to about $27, and then made a minor pop in the 7th week before moving up big after that. Once TSLA broke through resistance above $40 in April 2013, it did not correct again until it reached a high of $194.50 in September 2013. We corrected about 8 weeks on that correction to $116.10, a drop of 40.3%. If we would not drop a similar amount from the recent February high of $265.00, TSLA could hit a low of $158. A Fibonacci 38.2% correction from $265, would give you a low of $163.77. So far in 4 weeks, TSLA closed at $212.37, and last week's low was $203. We could fall another $40 or so over the next 3 weeks to complete a normal 7 week correction.

    One strategy might be to sell out of the money weekly puts to collect the premium or get exercised and purchase the stock at a slight discount. Or better yet, buy the stock on a dip and then sell in the money weekly calls, in hopes the stock gets called away, and to pocket the premium of the calls. Over the next 3 weeks, I will probably scalp in TSLA by buying a few shares just to get a feel for the market, while I wait for the 7 week mark to get a longer term position. I don't know the ultimate high TSLA reaches this year or sometime in the future. But I am confident that it is a lot higher than $265.00, and buying TSLA in the $165 to $190 range, if one can accomplish that, should be richly rewarded.

    Disclaimer:

    The thoughts and opinions in this article, along with all stock talk posts made by Robert Edwards, are my own. I am merely giving my interpretation of market moves as I see them. I am sharing what I am doing in my own trading. Sometimes I am correct, while other times I am wrong. They are not trading recommendations, but just another opinion that one may consider as one does their own due diligence.

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in TSLA, SCTY over the next 72 hours.

    Tags: TSLA, SCTY
    Mar 30 9:42 PM | Link | Comment!
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