Most of my stock trading picks today are short selling picks, since stock prices have reached important resistance levels in the weekly graphs. Daily stock graphs can then be used to pinpoint more detailed levels, which will lead to excellent entry points. The stocks that I picked out come from various sectors, such as Industrial Goods, Basic Materials and Technology and include AA, INTC and IR stocks.
I picked AA stock due to the resistance level at $15.15 pointed out in the weekly stock graph. Although the stock’s price penetrated that level on Friday, it did so forming an inverted hammer, which is considered a candlestick reversal pattern. I am expecting a pullback to the support level at $14.50 used as the first profit target. According to the daily AA stock graph I am looking to trade against the trend, but reversal signals such as major resistance levels in longer time frames, overbought conditions indicated by RSI and a declining ATR indicator lead me to believe the stock might have hit a crucial price level. However, whatever AA stock decides to do, I am well prepared setting a stop loss above Friday’s candlestick and scaling out my position at well pointed out levels. An even safer trade would be to short sell at $17.80, the next resistance level at the weekly graph.
A stock pick that I should have published last week should have been INTC stock. Intel’s stock had hit an important resistance level in the weekly graph 2 weeks ago at $22.00 price mark, and is now trending downwards to the support level at $19.00. A great stock pick would have been to short sell when the stock’s price failed to overcome the resistance level and we could now buy to cover half of our shares to secure our first profit, winning more than $1 per share with great odds to make more money if the price resumes the decline this week. Now that the price has already moved, my investment advice is against entering a trade at this point until it approaches the support level at $19. We will then look for well defined entry points to take advantage of the probable uptrend to the resistance level. Although INTC stock is not regarded as a stock pick at this time, it is a fine example of how to trade effectively the support or resistance levels. Starting by finding out the crucial levels at weekly graphs and trading between more detailed levels on the daily or hourly charts would most likely prove a profitable investment.
IR stock is most probably my strongest stock pick today. Like INTC stock, Ingersoll-Rand’s stock has reached a very important resistance level at the weekly graph. The last 5 trading days show the stock consolidating in the shorter time frame graphs, while RSI indicates overbought levels for the IR stock. This stock pick is once again a short sell pick, looking to take profit at the resistance level – now a support – of $43, possibly winning $4 per share. Depending on the weekly or daily price action I will later decide when to trade out the rest of my position, as 50% or so of my position will be traded out at the support level.
Other stock picks include IWM stock and PFE stock, both trading close to crucial resistance levels and I will be looking for entry points in the daily or hourly graphs. If you happen to trade, always pay attention to the price action intraday and set your stop losses according to proper equity management.