AMZN is breaking out from support

I've been really lagging on the posts lately. If there's anyone who actually checks this blog on a regular basis, I'm sorry about that. One of my New Year's resolutions was to post more consistently. The market has really turned into a stock picker's paradise over the past year and I have plenty of ideas about things to post about. The S&P closed flat last year but there were stocks in the index up 100% while others were down nearly as much. One stock that moved a lot last year but didn't make much net progress in either direction was AMZN (Amazon.com). At it's high for the year (and all time), AMZN was up 30% yet it closed down 5% having "corrected" sharply since mid October. I don't want to get carried away with analysis on this one because the situation seems straightforward to me on a technical basis. I'll keep my opinions about AMZN's fundamentals to myself beyond saying that I only know a few people who didn't do more than half of their Christmas shopping on Amazon.com. So here's the chart:

Everything looks great up until late October when the stock gapped down $25 to below it's rising 50 dma. Even then, the stock was pretty well behaved. It bounced first at it's rising 200 dma and made two failed attempts to retake its 50 dma before rolling over below its 200 dma. As AMZN corrected with the rest of the market it traced out a very nice falling wedge consolodation pattern/flag on the daily time frame (blue). It has tested support at $177 from August multiple times and despite having broke for brief periods, AMZN bounced back each time. The most impressive false break of $177 occured on December 14th when AMZN formed a $10 hammer reversal candle for the day. Today, AMZN again broke back above $177 support and broke out of the falling wedge. While this pattern is stretching the limits of a healthy base/continuation formation, with the 50 dma/200 dma crossover that just occured, I really like the look of this chart.

AMZN still has a long ways to go before we can say the uptrend has been re-established. I'd like to see volume increase as it pushes higher. It needs to retake its 50 dma and after a few attempts I'd like to see AMZN decisively retake its 200 dma near $200 (a good first target). The CCI divergence is positive but it needs to get back above zero. I think AMZN has a great year ahead of it and I will be keeping a close eye on it.

Disclosure: I own AMZN calls but am short AAPL.

Saturday Rock Blog: C.R.E.A.M. (cash rules everything around me)

Saturday Rock Blog: Davyd

So much for posting everyday this week... I had less than time I thought, anyways here's another Pogo "mashup." Its produced from the film AI, which was oriringally a Stanley Kubric concept but got directed and produced by Steven Spielberg later. Its not perfect but a must see for sci fi fans (AI). Hope you all had a Happy Thanksgiving! After the worst Thanksgiving week since the 1930's, is it time for a ride in Santa's sleigh?

CVX at the top of its range, bearish signals

Disclosure: I have no position in CVX but might take a shot with puts if it holds below $100 this week.

Saturday Rock Blog: Mellow Brick Road

I just noticed Pogo has a bunch of new videos I haven't seen. This week I'll keep it mellow for the holiday and post a chart a day with a Pogo video. Happy Thanksgiving!

FSLR descending triangle coming to apex, big move expected

(click chart for higher resolution)

One great fundamental bull case for First Solar is outlined in this report by morningstar, just to quote a few lines:

"We expect an industry rebound will not occur until mid-2012 at the earliest. Solar demand growth remains promising in the long term, but near-term growth rates are going to be very modest...

First Solar is the only solar company whose shares have a clear near-term catalyst: its pipeline of utility-scale projects in North America. We project this business segment to constitute more than 70% of the firm's revenue and 35%-40% of production output in 2012, while also serving as the overwhelming source of near-term earnings beginning in the third quarter of 2011.

Pricing on First Solar's 2011-13 backlog of utility-scale projects was set before the industry downturn, and none are subject to renegotiation. These projects were priced using First Solar's 2008-09 project installation cost levels, which were 35%-40% higher than they are today. Also adding to the bottom line will be the reduction in costs of capital for the 1,070 megawatts' worth of projects that received Department of Energy loan guarantees, which allow the company to realize higher selling prices. Putting it all together, this book of business isn't just going to provide an earnings buffer, but will in fact mint the company a great deal of money...

The big risk to First Solar's longer-term story is what will happen to the company's profitability and returns when these lucrative projects are completed in 2013. Any new utility-scale deals will be signed at lower prices. Without another large reduction in costs, the company could encounter some major headwinds. But we don't think this risk will be influencing the stock for quite a while, as 2014 is a lifetime away in the solar sector."

To the best of my knowledge, First Solar presents the greatest long term (5-10 yrs) investment opportunity in the market today. Despite this, an obviously bearish descending triangle has formed in the daily chart appearing as a continuation to the long term downtrend. Unfortunately, with the broader market in bear mode, solar will continue to struggle despite soaring energy prices.

Is FSLR trying to fill the 2007 gap to $35?

Related post.

Disclosure: I am long FSLR stock and calls. I expect to continue buying FSLR for years to come.

Saturday Rock Blog: 'Round the Wheel

Saturday Rock Blog: Waste

AAPL year-to-date performance vs popular ETFs

Disclosure: No positions, but maybe soon.

Market retraces to its (declining) 200 dma

Back at the end of July, when the small caps first broke their (then rising) 200 day moving average (dma), I'm sure many hoped that the market would bounce back and rally to new highs. After all, a rising 200 dma should be a solid bastion of support/resistance in a secular trend. Since losing the 200 dma, the market leading small caps (IWM above) have been mostly range bound but ~25% lower than July prices. IWM did pierce the bottom end of the Fall range at the beginning of the epic October rally we just saw. In the final days of October, with the resolution (apparently) of the Greek problem with the default/bailout deal, the small caps broke up above of the Fall range. Will the breakout hold? Can the market retake and hold its ~200 dma? One thing is certain, the IWM 200 dma (and other index ETFs!) is now declining in value and as we approach it, expect resistance. Selling off from here would be characteristic of a bear market. In fact, many indications are the we began a new bear market in July/August. We shall see...

I have been too busy to monitor the market much lately (hence the infrequent posts), but one thing that has really caught my attention is the action in AAPL. Maybe its that the stock keeps pushing an eye popping $420 ($390B market cap) or just morbid curiosity following the unfortunate death of Steve Jobs. How much influence did Mr Jobs have on AAPL's stellar success of the past 7 years (4000% gain in the stock) and will his successors be able to keep up the growth? At any rate, a number of technical indications are looking bearish on the shorter term time scale while the long term uptrend clearly remains in tact. Note the rising 200 dma, which has acted like support. I wouldn't give shorts in AAPL much slack, $410-420 seems like a good line in the sand. Watch AAPL's behavior near its rising 50 day and 200 day moving averages.

Disclosure: I plan to initiate a put position against AAPL and perhaps IWM in the next few days.

Saturday Rock Blog: (No More) Bad Town

Saturday Rock Blog: Black

NFLX 50% retracement

The 50% retracement point (took under 3 months) should be good for a reasonable bounce, especially considering the (capitulation) volume NFLX saw late last week. Out of the next low its tough to say where NFLX is heading, volatility will probably remain elevated for some time.

Saturday Rock Blog: Come Monday

I'll post some charts later today.

Saturday Rock Blog: Back in the High Life Again

Saturday Rock Blog: You Can't See Me

Tupac this morning for no particular reason.

Double bottom, simple ABC correction or something far worse?

A simple ABC correction targets $106 on SPY or ~1057.5 on the index. If this is the beginning of a new long term trend, as the cross overs in the chart above suggest, then the bottom could be potentially much lower. However, I wouldn't be surprised to see Bernanke play some card up his sleeve and send us spiraling higher out of a double bottom. I am posturing bullish at the moment even though I don't think we've seen capitulation yet (on either side). I tend to think that the bull market isn't over yet and that we have one last big leg up, but honestly, these charts suggest otherwise. I'm leaning more towards a fundamental, longer term, argument that inflation should start creeping back up with rates at zero percent for two more years. So I'm not trying to trade these swings but nibbling when there's blood on the street.

Disclosure: Long IWM, LNKD, FSLR (broken charts, I know)

Saturday Rock Blog: Mojo Boogie

Sunday Night Rock Blog: Falcon Jab

Strange times call for strange music videos, enjoy...

LNKD Cup n' Handle

This cup n' handle looks pretty decent to me with a target that's $50 higher using the measure rule. The potential for LNKD to sqeeze is extremely high due to the small, overshorted float. This could start to fall apart if it got below $95 but above $110 it can soar. There might be a pause at $122.70, the IPO day high, but even with Bulkowski's conservative target, you get ~$135.

CAUTION: LNKD reports quarterly earnings tomorrow (after the close) for the first time since they went public. This report is likely to break the pattern one way or the other.

With the bollinger bands tightening I can't see a small move in the next few days. Most other indicators look bullish to me (RSI, CCI, MACD, stoch). Tomorrow we might hold mostly unchanged (as volume begins to swell) but I'd expect a large gap Friday.

Disclosure: I am long September LNKD calls.