Thursday, September 18, 2008


What a day! The VIX hits 40+, the Dow drops below 10,500 and then all of a sudden...a power rally! That was crazy! If you haven’t read my article on “How to Trade Breakouts and Breakdowns”, you should definitely do it.

Obviously, since the market is was up 4% today, I have a list probably over 100 breakouts, mostly concentrated in the financial sector. The medium and small-sized regional banks and financial services companies did the best. For example:

Frontier Financial (FTBK) up 50.3%! Today marks its official day out of mediocrity. Notice the 50-day MA curving up as well as the clean close well above the 200-day MA. There’s plenty of support for this bank in the future.

CoRUS Bankshares (CORS) spiked 45.5%! Unlike FTBK, CORS didn’t make it past the 200-day MA. The positive is that the stock didn’t drift lower after hitting resistance, but closed right at that level signaling a major willingness for buyers to break CORS above the 200-day MA. Note the ascending triangle as well as the 50-day MA curving up.

Pacific Capital (PCBC) reached its highest level this year…in only one day! Up 40.3% and clearly out of bear market territory, PCBC is free to head higher. Notice the upward wedge that formed as well as the most extended breakout above the 200-day MA of any chart profiled in this article.

Huntington (HBAN) should consolidate nicely right above the 200-day MA.

Newcastle (NCT) made an AMAZING comeback! Unbelievable. Provided that NCT doesn’t reverse to $6.50, it will go higher after some struggle at the 200-day MA.

Firstfed (FED) formed a downsloped flag, which set the stage for a breakout. FED will go higher.

Expect some consolidation for Marshall & IIsley (MI) and range-bound action for the next several weeks.

Banner (BANR) formed an ascending triangle and broke out up the upside, living up it the pattern’s description. The 200-day MA proved to be considerable resistance for BANR, having moved has high as $21, but falling below the MA to close at $17.51. If BANR breaks and closes above $19, it’s a buy.

A non-financial that broke out was Media General (MEG), up 111%! The company declined to comment on why the stock was up so much, but news suggests that MEG had the best August performance out of all of its competitors. Something is definitely in play here.

On a 400+ point day, you don’t expect too see many breakdowns. If a stock broke down on days like this, then that stock is totally in trouble.

Take, TETRA Technologies (TTI) as an example. TTI revised its guidance lower to $1.30 - $1.55 per share. That's always bad news.

A classic breakdown. Inevitable.

Dayton Superior (DSUP) posted weak ABI numbers and broke through a major multi-month support level. This means that ever buy at the $2 level since June either got crushed or sold in panic.

There was no way to see this one coming. Merck (MRK) discontinued a licensing agreement started in 2007 with SurModics (SRDX).

The Asian markets have been getting crushed more so than us in my opinion. AsiaInfo (ASIA), is no exception.

Apogee Enterprises (APOG) cut its 2009 outlook to $1.65 - $1.82 per share, down from $1.82 - $1.94 per share. Look at all the islands formed on the chart due to the gaps.

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