Using the EMA Bearish Cross 10-50 scan the following stocks surfaced:
Lets take a look at Potlatch Corp.(PCM).
Looking at the daily chart we can identify a embryonic entry on the stochastic and the lows are hitting a trend line. Taking the trade at 45.50 and putting a stop loss at 44.50 and take profit at 47.50 will give a 1 to 2 risk to reward ratio.
Michael Patterson
Stock Investor Personal Coach
The Three Red Arrow search found the following stocks:
Going through the five stocks on the list, I found the Gushman Environmental Energy Inc. (GU) to be the most promising. Let’s look at the Daily chart.
With the three red arrows and a double top gives me enough confidence that GU is going down. Shorting at 11.50 and putting a stop loss at 12.50 and potential profit at 9.50 gives us a 1 to 2 risk to reward ratio. Good luck!!
Michael Patterson
Stock Investor Personal Coaching
Running both EMA Bullish Crossover scans the following stock surfaced:
Looking at the weekly chart we can see a strong uptrend and a defined support and resistance. Forecasting the trade will help identify profit targets. The chart below shows a great way to forecast the trade. Our forecast is 54.50.
Now that we have forecasted our trade lets drill deeper into the trade and identify a good entry.
The daily chart shows a great entry point, with the moving average crossovers working in a bullish direction. This gives us confidence that the moving average crossover will give a good enough setup to give a great return. Entering at 46.00 and putting a stop loss at 43.00 will give a 1 to 2 Risk to Reward ratio.
Michael Patterson
Stock Investor Personal Coaching
Running the 3 Red Arrows Scan the following results were exposed:
Sifting through the results COMPASS MNRLS chart looked the most promising. Analyzing the weekly chart a pattern was identified.
The head and shoulders pattern is a good pattern in identifying a reversal of the trend. The chart show a previous up trend and now it looks to be that the trend is reversing and starting to sell off. We can use patterns to identify whether the trend is continuing or reversing. Let’s look at the daily chart.
This chart shows a down trend with a large red candle to give us confidence that the bears are pushing down. Let’s look at the chain.
In looking at the chain, I decided to buy an out of the money put at 55. The Contract that is highlighted is the September 55 put @ 2.15. Since we are buying an OTM put the volatility is large, so I’m going to put a stop about %80 from my entry. Good luck.
Mike Patterson
Stock Investor Personal Coaching
Using the EMA Bullish and Bollinger Band Expansion scans the follow stocks surfaced.
Scan through the following results Ppg Industries Inc. (PPG), caught my eye. Looking at the weekly chart clearly shows a down trending stock, so we have a strong bearish stance on PPG.
Now let’s look at the daily chart.
Looking at Ppg industries Inc. with a daily focus we can see that there was a gap. This alerted me for a fill the gap strategy. Fill the gap strategy consists of the current stock price filling the price gap that we had just a few day earlier. For this to occur we would short the stock at 60.00 with a stop loss at 62.00 and projected profit at 57.00. This will give a 1 to 1.5 risk to reward ratio. Good Luck!!!
Michael Patterson
Stock Investor Personal Coaching
Running the EMA 30 200 Bearish Crossover scan the following results are shown:
Looking through the choices, I found American Tower Corp. to be the most promising.
The weekly chart shows a very interesting chart pattern.
AMT has three red arrows and double top which identifies a clear pressure from the bears. Let’s look at the daily chart:
Interesting enough the daily chart shows another double top which is a reversal pattern, the chart also gives a EMA crossover and a down trend. This gives a great confidence in searching for a put. The following is the option chain for AMT.
Doing out of the money options give us a better opportunity for a larger return but also a chance to lose big as well. But with all the indicators that are pointing to the bears we have confidence that the bears are going to continue there attack. Looking at the 37.50 put option the ask price is 1.70 which is a great price. Buying the 37.50 put and not putting a stop loss because of the volatility of out of the money options will give us a chance for it to run. Remember to always apply position size and money management to your trading.
Michael Patterson
Stock Investor Personal Coaching
Running the Bullish crossover scan showed the following results:
Through the array of choices CMI looked promising. Lets look at the weekly chart
After identifying an uptrend in the weekly chart, lets drill in a little stronger and look at the daily chart.
Looking at the daily chart we can see how moving averages can be used for support. CMI just bounced off of the 100 EMA which shows a good support. Getting in at 66.50 and putting a stop loss at 64.50 and take profit at 70.00 will give a 1 to 2 risk to reward ratio.
Michael Patterson
Stock Investor Personal Coaching
Using the EMA Bullish Crossover 30-200 scan the following stocks arise.
Alnylam Pharmaceuticals chart caught my eye. Looking at the weekly chart shows a good uptrend.
Looking at the daily chart we see a good uptrend and the 30 and 200 Exponential day moving averages are crossing. When the faster moving average (30 day) crosses the slower day moving average (200 day) displays a Bullish signal.
Buying the stock at 27.00 and putting a trailing stop at 24.50 gives the stock the opportunity to move up while the stop follows behind. This gives us the opportunity to cut our losers short and let our winners run.
Michael Patterson
Stock Investor Personal Coaching
Using the EMA Bullish Cross 10-50 trade setup the following results surfaced:
Sifting through the six results Canon Inc. looked promising. The weekly chart shows the following:
The chart doesn’t show a bullish chart because of the highs are getting lower which gives us a clue there is a down trend.. There is no reason the buck the trend, sometimes with a bullish scan it is better to be bearish. That is why using common sense and looking at a chart is a big part of trading. Let’s look at the daily chart.
The Daily chart shows a double top which is a trend reversal pattern. This gives a clue that the trend is reversing on the daily chart. Cannon being in the Technology sector it is good to see the strength of that sector.
With Technology Sector SPDR’s Fund (XLK) showing a double top as well gives a confidence that the Cannon is going to be pawed by the Bears. Shorting at 52.00 and putting a stop at 55.50 and expecting the stock to go to 45.00. This computes to a 1 to 2 risk to reward ratio.
Michael Patterson
Stock Investor Personal Coaching
Using SI Fundamental Rank and EMA Bearish Cross 10-50 scan the following results were produced
Looking at Zebra Technologies Corporation (ZBRA) weekly chart:
The weekly chart shows a strong bearish trend that is bouncing off of resistance which could result in another push down to the bottom support level. Let’s drill a little deeper and focus on the daily chart
The crossover system has only given three entries since November 2007, if we would have gotten into the crossovers the trade would have been profitable based on exiting the trade at the next crossover. Now that we feel confident that ZBRA is heading to the BEAR CAVE. Let’s consider a option strategy called a Bear Call Spread.
Bear spreads are nice low risk, low reward strategies. One of the easiest ways to create a bear spread is by using call options at or near the current market price of the stock.
Bear call spreads profit when the price of the underlying stock decreases. Bear call spreads are typically created by selling at-the-money calls and buying out-of-the-money calls. Looking at the option chain
Open interest in the July contracts shows a very low value, but the August options contracts have adequate open interest. This gives us a clue that a large portion of traders are thinking 35.00 is a strong barrier. Selling the Aug 08 35.00 @ 1.70 strike and buying the Aug08 40.00 @ .30, would fulfill the requirements of a credit spread.
Anticipating the drop of ZBRA our maximum profit is 1.40(1.70 -.30= max profit), and maximum risk is 3.60 ((40-35)-1.40 = max risk).
Michael Patterson
Stock Investor Personal Coaching