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Charts: DGP, PWE, SPX (S&P 500 Index)

January 07th, 2009 Comments(2) tagged , , , , , and

Click charts to enlarge

(DGP: 46.21 -0.84%) — Short @ $16.90

Though RSI(3) indicates that gold is short-term oversold, I’ve highlighted 2 recent occasions when it was oversold and kept dropping further.
As of this moment, US$ is moving up and gold is dropping.
My target is still tied to GLD, but I’m guessing it’ll be around 50dma on DGP as well, or $15.
dgp_jan7

(PWE: 14.01 +0.07%) — Short @ $13.24

50dma is lower today, overall PWE behaving as expected with all the indicators starting to correct.
Stock went down on slightly higher volume today, but not significantly.
pwe_jan7

SPX — S&P 500 Index

Well… I have Jan $75 puts, as insurance against a dramatic plunge, because I’m still slightly paranoid. I have that TZA which is a 3x Small Cap Bear ETF. And I bought Feb $92 SPY calls (that I sold yesterday, re-bought them cheaper today). So though overall I’m net short the market, I’m slightly hedged. Saw a “signal” indicating that SPY should be at $91.50 at some point tomorrow, we’ll see.

RSI(3) worked off the overbought condition pretty fast.
Volume was slightly lower today.
Closed at support. Should it break, SPX will go to 50dma.
Pivot points for tomorrow:
R1 921.98; S1 896.90; R2 937.25; S2 887.09, DP 912.17

spx_jan7

Trade Plan: Short PWE

January 06th, 2009 Comments(0) tagged , , , , , , , and

Though I dislike trading oil and natural gas, PennWest seems like a fairly low risk short trade. TSX ticker is PWT, but I prefer NYSE-listed (PWE: 14.01 +0.07%).

Trade: short PWE
Entry: today’s close or on morning pop
Target: $12.15, once reached, I may move the stop to this level and let it go to maybe $11
Stop: $0.50 above entry
Risk: $0.50
Potential profit: $1.30-$1.80

Why:
  • Barely touched the 50dma, but couldn’t break above it, even on fairly strong volume
  • Bumping against strong resistance at just under $14
  • Unfilled recent gap up from $12.15
  • RSI(3) – short term – is at an extremely overbought reading, 96
  • Stochastics also showing it’s overbought

I’m hoping for a quick and simple trade. The stop is tight as oil may take the stock above resistance in a flash.

Wouldn’t mind buying this back for its insane yield but not yet.

Click charts to enlarge
pwe

pwe2