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Moving from ETFs to Stocks

|Includes: Applied Materials, Inc. (AMAT), MFLX, PWER
Moving from ETFs to Stocks
By David Kern, on June 22nd, 2010

Yesterday with the big gap up in the morning, I tightened up stops to ensure profit on the ETF positions I had and transition into individual stocks.  The closed out positions have been moved to my closed trades page.  I found some good setups in the technology sector I’ll show here.

AMAT (Applied Materials) is a semi stock with fundamentals rated five stars by Standard & Poors.  It’s currently on a point and figure buy signal and has set up in an eight month period of consolidation that puts it resting right against the bullish trend line.  On the daily candlestick chart, it’s broken above the 200 and 50 day moving averages in a consistent uptrend of higher highs and higher lows since the end of 2008.  The last high in mid April 2010 set up a lower peak and began a tightening pattern that I expect will break out higher continuing the uptrend.

MFLX P&FMFLX (Mult-Fineline Electronix) is another Standard and Poors five star rated stock, and is also on a point and figure buy signal in a period of tight consolidation after a strong run since the end of 2008.  This eight to nine month period of consolidation has moved it sideways in the 21 to 27 range predominately.  On the daily candlestick chart, it’s above the 50 and 200 day averages, within only about a three dollar range.  A move below 23 would invalidate my perspective, but I expect a breakout higher.

PWER (Power-One Incoporated) is a Standard and Poors four star rated stock that (are you seeing a trend here) has established a tight consolidation range in the 6.5 to 8 dollar range over the last two months.  This one is a faster moving animal than the first two, and caught my eye with a good sized insider buy at above $8 at the beginning of May 2010.  This consolidation follows a gap up from the mid five dollar range at the end of April 2010, and the consolidation looks to have since filled the gap.  Previous to that move, it had languished in no man’s land sub $5.  The daily candlestick is above both the 50 and 200 averaged.  A fall to $6 would break this pattern, again I’m expecting a break out of the consolidation higher.



Disclosure: Long AMAT, MFLX, and PWER at time of writing.

Disclosure: Long AMAT, MFLX, and PWER at time of writing.