Trading Ideas of the Day

Tradable Trends in 3 Tech Stocks
Specialty: STOCKS
Published: 11/13/2012
By Thomas Kee, President and CEO, Stock Traders Daily
Tickers mentioned: AAPL, FB, RIMM

Most traders are aware of the seasonality of tech stocks, and Thomas Kee, Jr., of Stock Traders Daily highlights three opportunities he sees in the charts at this time.

In market environments like these, investors do not need to hear the warnings I have been making for months as much as they need more specific stock related information. My intention with this article is to point out both potential opportunities and risk controls in three of the 1,300 stocks that we follow at Stock Traders Daily.

Before I begin, I have advised clients to participate in the short side of the market already, but I only advise clients to do that near market highs. I will soon stop allowing them to initiate new longer-term short positions. We do not chase the market; instead we short near relative highs and then wait for the market to capitulate. If the market continues to pull back we will be too far away from the high for me to authorize new longer-term short positions, and therefore we will be in our waiting mode.

Today's article focuses on three stocks that have been very important to investors recently. They are Apple, Inc. (AAPL), Facebook (FB), and Research In Motion (RIMM). The summaries below are technical and are derived from our real-time trading reports for these specific companies.

AAPL: When Apple broke below $640, a material reversal signal surfaced and it told us that the stock could fall to $520 in a relatively short time frame. However, according to our technical observations $520 is not nearly as strong of a support level as $425. Therefore, our current technical observations for Apple tell us to respect $520, consider it a trading catalyst, and if this level holds we could see a bounce back, but if it breaks do not plug your nose and hope for the best. If $520 breaks lower, the stock could fall by another 20% without much trouble at all.

RIMM: anyone who reads the news knows that Research In Motion has been out of favor since it hit $70 in February of 2011, but our real-time trading report for RIMM tells us that the stock may be stabilizing and if it breaks over the longer term resistance level, it could actually increase significantly. The stock has already been flirting with this level, in fact it is doing so right now, so consider any increase from current levels to be extremely bullish and trigger a buy signal for Research In Motion. This is obviously a lower priced stock so small moves can turn into larger gains, but they can also turn into larger losses so limit your exposure. On that same note, if the stock is capable of turning higher here its first stop will likely be around $12.50, and if that breaks higher $25 is not far away either.

FB: Facebook is a stock that people are tempted to buy because they believe Web site traffic will soon convert to revenue, but trading a stock like this based on expectations is extremely risky. Instead, trading this with an unbiased objective, in other words trading instead of investing in it, can produce excellent results with very clear risk controls. My current analysis tells me that the range between $17.64 and $24.42 is extremely attractive and buyers should be willing to buy the stock near $17.64 with tight stop losses and short sellers should be willing to short it near $24.42 with tight stop losses as well. Either one of these can provide excellent returns, but the mindset is not one of investing in Facebook, but instead trading it. Longer-term investments would require Facebook to first break out of this range.

By Thomas Kee, Jr., President and CEO, Stock Traders Daily

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