Todays Big Stock: National Oilwell Varco, Inc. Co (NYSE: NOV)

National Oilwell Varco, Inc. is a provider of equipment and components used in oil & gas drilling and production operations, oilfield services and supply chain integration services to the upstream oil & gas industry. It operates in three business segments: Rig Technology, Petroleum Services & Supplies and Distribution Services. The Rig Technology segment designs, manufactures, sells and services systems for the drilling, completion and servicing of oil and gas wells. The Petroleum Services & Supplies segment provides consumable goods and services used to drill, complete, remediate and workover oil and gas wells, service pipelines, flowlines and other oilfield tubular goods. The Distribution Services segment provides maintenance, repair and operating supplies, and spare parts to drill site and production locations worldwide.

To analyze National Oilwell Varco’s stock for potential trading opportunities, please take a look at the 1-year chart of NOV (National Oilwell Varco, Inc) below with my added notations:

Over the last month, NOV has formed a strong support level at $60 (green). You can also see how the $60 price is not a new level of importance to NOV. The current resistance for NOV would appear to be $70 (red). Lastly, $65 has been an area of support and resistance off and on throughout the year (navy). Not surprisingly, that same $65 level is where the stock is currently finding support.  Regardless of your overall posture on the stock market, NOV provides you with multiple trading opportunities.

The Tale of the Tape: NOV is not only trading within the range of two important price levels at $60 and $70, but the stock also has a common level at $65. If you are bullish on the market or NOV, long trades could be made if the stock breaks through the $70 resistance or pulls back to the $65 support with a stop placed below the level of entry. Short plays could be made on a rise to $70 or on a break below $65 with a stop placed above whichever level is entered.

In addition, if NOV were to break below $65, the next level down for a long trade would be at $60. A break of the $60 support would provide another opportunity to short the stock.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!
Christian Tharp, CMT

Todays Big Stock: Silver Wheaton Corp Common Shar (NYSE: SLW)

As the market continues to recover, it’s becoming more uncertain as to which side of the trade to be on: long or short. Can the market keep reaching higher, or is a sell-off still looming? Could the market simply pull back a bit before continuing higher? As I stated in yesterday’s newsletter, it never hurts to have stocks in your watch list that present you with trading opportunities regardless of what direction the market heads. One such stock that may fit that description would be that of Silver Wheaton Corporation.

Silver Wheaton Corp. (Silver Wheaton) is a mining company that generates its revenue primarily from the sale of silver. At the end of 2010, Silver Wheaton had entered into 14 long-term silver purchase agreements and two long-term precious metal purchase agreements. The company operates in nine business segments: the silver produced by the San Dimas, Zinkgruvan, Yauliyacu, Penasquito, Cozamin, Barrick and Other mines, the gold produced by the Minto mine and corporate operations. Its wholly owned subsidiaries include Silver Wheaton (Caymans) Ltd. and Silverstone Resources (Barbados) Corp.

To review Silver Wheaton’s stock, please take a look at the 1-year chart of SLW (Silver Wheaton Corporation) below with my added notations:

SLW has created multiple levels of importance throughout the year. First, SLW has approached a common resistance/support area at $40 (red). In addition, the stock has also formed a short-term, up-trending support level (blue) over the last month. These two levels combined have SLW stuck within a common chart pattern known as an Ascending Triangle that will eventually have to break one way or another. If the pattern were to break to the downside, SLW may fall back down to its longer term $30 support area (green).

The Tale of the Tape: SLW is currently stuck between two very important levels for the stock: The up-trending support and the $40 resistance. A long trade could be made on a break above the $40 level with a stop placed under the level. On the other side, you could enter a short trade on SLW if the stock breaks below the up-trending support level. In that case, a stop should be placed above the level of entry. If SLW were to make it’s way down to the $30 level, a long trade could also be entered at that time.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!
Christian Tharp, CMT

Todays Big Stock: Dillard’s, Inc. Common Stock (NYSE: DDS)

Being that the market has had a nice recovery over the last week or two, it’s becoming a little uncertain whether the desired trades should be long or short. Does the market still have room to run, or is a sell-off looming? Might the market simply pull back before continuing higher? To be prepared either way, it never hurts to have stocks in your watch list that present you with trading opportunities regardless of what direction the market heads. One such stock that may fit that description would be that of Dillard’s Inc.

Dillard’s, Inc. (Dillard’s) is engaged in apparel and home furnishing retail business. The company operates in two segments: the operation of retail department stores and a general contracting construction company. As of January, 2011, the company operated 308 Dillard’s stores, including 14 clearance centers, and one Internet store offering a selection of merchandise, including fashion apparel for women, men and children, accessories, cosmetics, home furnishings and other consumer goods.

To review Dillard’s stock, please take a look at the 1-year chart of DDS (Dillard’s, Inc) below with my added notations:

DDS has recovered nicely over the last couple of weeks with the rest of the market. After finding support near the $40 level, the stock has rallied all the way back above the expected $45 resistance. That $45 level should now act as support on any pullbacks. On the other hand, the next level of expected resistance for DDS on the way up should be $50.  Lastly, a break below $45 should signal lower prices for DDS, while a break above $50 should mean a higher stock price to follow.

The Tale of the Tape: DDS has moved back up in between two very important levels for the stock: $45 and $50. Long trades could be made on a pullback to $45 or on a break above the $50 level. A stop should be placed under the level of entry. On the other side, if you are bearish, you could enter short trades on DDS if it rallies to $50 or breaks below the $45 level. In that case, stops should be placed above the level of entry.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!
Christian Tharp, CMT

Todays Big Stock: BJ’s Restaurants, Inc. (NasdaqGS: BJRI)

BJ’s Restaurants, Inc. owns and operates 103 restaurants located in California, Texas, Arizona, Colorado, Oregon, Nevada, Florida, Ohio, Oklahoma, Kentucky, Indiana, Louisiana and Washington. BJ’s restaurants operate either as a BJ’s Restaurant & Brewery, which includes a brewery within the restaurant, a BJ’s Restaurant & Brewhouse, which receives the beer it sells from one of its breweries or an approved contract brewer of its recipe beers, or a BJ’s Pizza & Grill, which is a smaller format, full-service restaurant with a more limited menu than its other restaurants. The company’s menu features its deep-dish pizza, its own handcrafted beers, as well as a selection of appetizers, entrees, pastas, sandwiches, specialty salads and desserts, including its Pizookie dessert. Its BJ’s Restaurant & Brewery restaurants feature in-house brewing facilities where BJ’s handcrafted beers are produced for some of its restaurants.

To analyze BJ’s Restaurants’ stock for potential trading opportunities, please take a look at the 1-year chart of BJRI (BJ’s Restaurants, Inc) below with my added notations:

As with yesterday’s SFLY, BJRI could be in the process of forming a common chart pattern known as a Rectangle. The pattern is being formed with the combination of the $40 support (green) and the $45 resistance (red). The $50 level was also important as support in May, June and July. If this pattern is in fact forming, the same declining volume that SFLY had is also in place with BJRI. Some traders will watch this pattern to see which way the stock breaks, either through the $45 resistance or below the $40 support, before entering a trade. More active traders could look at additional trading opportunities at $45 or on another pullback to $40.

The Tale of the Tape: Whether or not a potential Rectangle pattern is being formed, BJRI is trading within the range of two important price levels at $40 and $45. Long trades could be made if BJRI breaks through the $45 resistance or pulls back to the $40 support with a stop placed below the level of entry. Or, short plays could be made on a rise to $45 or on a break below $40 with a stop placed above whichever level is entered. If BJRI were to break below $40, the next level down for a long trade would be at $35 (blue).

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!
Christian Tharp, CMT

Todays Big Stock: Shutterfly, Inc. (NasdaqGS: SFLY)

Shutterfly, Inc. is an internet-based social expression and personal publishing service that enables consumers to share, print and preserve their memories and its technology, manufacturing, web-design and merchandising capabilities. Shutterfly provides a range of personalized photo-based products and services that allow consumers to upload, edit, enhance, organize, find, share, create, print, and preserve their memories. It generates revenues by producing and selling professionally bound photo books, greeting cards and stationery, personalized calendars, other photo-based merchandise and prints ranging in size from wallet-sized to jumbo-sized enlargements. It manufactures most of these items in its Charlotte, North Carolina and Phoenix, Arizona production facilities. It also sells a variety of print and photo-based merchandise that is manufactured for it by third parties.

To analyze Shutterfly’s stock for potential trading opportunities, please take a look at the 1-year chart of SFLY (Shutterfly, Inc) below with my added notations:

SFLY could be in the process of forming a common chart pattern known as a Rectangle. The pattern is being formed with the combination of the $41 support (green) and the $50 resistance (red). The $50 level was also important as support in April and June. If this pattern is in fact forming, the declining volume a trader would expect is in place. This decline in volume is the typical “calm before the storm” leading up to the breakout. Some traders will watch this pattern to see which way the stock breaks, either through the $50 resistance or below the $41 support, before entering a trade. More active traders could look at additional trading opportunities at $50 or on another pullback to $41.

 

The Tale of the Tape: Regardless of the potential Rectangle pattern being formed, SFLY is trading within the range of two important price levels at $41 and $50. Long trades could be made if SFLY breaks through the $50 resistance or pulls back to the $41 support with a stop placed below the level of entry. Or, short plays could be made on a rise to $50 or on a break below $41 with a stop placed above whichever level is entered.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

 

Good luck!

Christian Tharp, CMT