Stock Picks

This is an important alert on EPEX.  I did a post before on EPEX Edge Petroleum.  You can see the previous post under the related posts section down below.  It looks to me now that EPEX is coming close to a decision point and I cannot say for sure whether it will be up or down but the probabilities say it is going to be an upside breakout.

There are two significant swings on EPEX that make this analysis worthy.  You can see them more clearly if you click on the chart above.  They stand out like a sore thumb.  But the key point to be made about those two price swings is that the second one had volume that was substantially larger than the first one.  That is an important clue about what the future direction of the stock price will be upon a breakout from this pattern.

My analysis shows that the direction will be UP.  However we will not really know until it happens… that is just the way these markets work, let them give you the signal and then go with the flow.  As of now EPEX is still constrained within this tight range.

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ABK Ambac Financial also came up in my new scan that I developed yesterday and also showed up in the MarketClub Scan.  As I just indicated in my previous post, the real estate sector is starting to rise from the dead a little bit and so this sector may be worth paying attention to.

I was lucky enough to play ABK Ambac Financial way back in August of 2008 after it had a massive bear market rally from a dollar and change to almost 10 dollars.  I remember it vividly because I was on vacation in Cape Cod up at the Eastham cottages and I remember trying to manage this trade with my laptop using the hotels wireless connection they had in the lobby.  I would go there every morning and then in the afternoons trying to engineer the Ambac trade.  At the time it was consolidating in mid August (see chart full size by clicking on it above) in a somewhat ascending triangle or symmetrical triangle pattern.  But I was stopped out several times and then had to re enter for the eventual move to 9 and change.  I had to be real careful about getting into Ambac because the stock had already had a big move and I was not in the trade right off the bottom, so I was unsure whether it had enough steam to go higher.

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I continue to like ETFC Etrade Financial here.  I like the way it pushed into the gap on 20 million extra shares (illustrated by the two yellow arrows).  To me that is a bullish sign.  It has also managed to break through the bottom blue line which represents the bottom portion of this trading range which should act as support going forward.

The fact that price was able to break back into this trading range is very bullish indeed.  After it broke through and down the blue support line near the 1.35 level, the price of ETFC was supposed to continue falling and continue making bear market lows under 1 dollar.  But the bears could not accomplish that and price recovered back inside the trading range.  Now it has been flat lining sideways.

If ETFC can hold these levels with a worst case of a quick retest of the blue support line at 1.35, it could lead to a large run near the 1.95 level which would be an ideal exit point.

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ETFC – Etrade Financial continues to show good signs of a new uptrend based on price structure and trading volume.  They recently reported another loss on July 22nd but CEO indicates that the recent money they raised will be enough to pull them out of their loan loss crisis.  In true market forward looking fashion, the market starts to mark ETFC up well in advance of any full resolution to their loan crisis.

BestOnlineTrades added ETFC to the recommended list this morning very near the open at 1.47.  The stop is set at 1.38 but in this case that may need some fine tuning depending on if or how much of a pullback ETFC initiates this week or next.

The ideal buy price for ETFC was at 1.35.  But here at BestOnlineTrades we were a couple days late in spotting ETFC as a possible candidate.  If a 1.35 entry was taken than it would have allowed ideal stop placement just under that support area as depicted by the red dashed line.

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