Todays Big Stock: Alpha Natural Resources, inc. c (NYSE: ANR)

As I often state in my newsletters, it never hurts to have stocks in your watch list that present you with trading opportunities regardless of what direction the market heads. On one hand, you may think the market is heading higher, but on the other hand; the market always reserves the right to change its mind! One such stock that may fit that description of giving you a trade either way would be that of Alpha Natural Resources.

Alpha Natural Resources, Inc. is a coal supplier in the United States. The company is a supplier and exporter of metallurgical coal for use in the steel-making process, and a supplier of thermal coal to electric utilities and manufacturing industries. It operates 66 mines and 13 coal preparation plants in Northern and Central Appalachia and the Powder River Basin. Alpha Natural Resources operates in two segments: Eastern Coal Operations and Western Coal Operations. Eastern Coal Operations consists of the mines in Northern and Central Appalachia, its coal brokerage activities and the company’s road construction business. Western Coal Operations consists of two Powder River Basin mines in Wyoming.

To review Alpha Natural Resources’ stock, please take a look at the 1-year chart of ANR (Alpha Natural Resources, Inc.) below with my added notations:

ANR has created a couple of short-term price levels over the last month. First, ANR has formed a clear resistance area at $35 (red). In addition, the stock has also been climbing a short-term, up-trending support level (green), which it has now tested (3) different times. These two levels combined have ANR stuck within a common chart pattern known as an Ascending Triangle that will eventually have to break one way or another. The volume drying up (blue) as the pattern forms is the “calm before the storm” that usually precedes the breakout.

A break above $35 should signal higher prices for ANR, but were the stock to break the up trending support line instead, ANR will most likely hit new 52-week lows.

The Tale of the Tape: ANR is currently stuck between two very important levels for the stock: The up-trending support and the $35 resistance. A long trade could be made on a break above the $35 level with a stop placed under the level. On the other side, you could enter a short trade on ANR if the stock breaks below the up-trending support level. In that case, a stop 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: Harley-Davidson, Inc. Common St (NYSE: HOG)

With the market starting to pull back again, it’s time to start watching some of your stocks for pullbacks to important levels IF you are still bullish on the overall market. A stock that may be pulling back to a key level now would be that of Harley-Davidson, Inc.

Harley-Davidson, Inc. operates in two segments: the Motorcycles and Related Products (motorcycles) segment and the Financial Services (Financial Services) segment. The motorcycles segment designs, manufactures and sells at wholesale heavyweight cruiser and touring motorcycles as well as a line of motorcycle parts, accessories, general merchandise and related services. The company conducts business on a global basis, with sales in North America, Europe/Middle East/Africa (EMEA), Asia/Pacific and Latin America. The motorcycles segment includes the Harley-Davidson and Buell product lines.

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

The trade on HOG is relatively simple. $35 has been an important level to HOG over the last 8-9 months. After stalling at $35 back in December and January, HOG found support at $35 in both June and August. When HOG fell below the $35 mark in mid-August, the stock quickly rallied back up to that level to find brief resistance there. Since hitting $39 last week, HOG has started to pullback and seems to be on its way back down to the $35 level.

The Tale of the Tape: HOG has an important price level at $35. If the stock continues to move lower, a long trade could be entered at $35 with a stop placed under $35. However, if HOG breaks below $35, then a short trade would be advisable with a stop above the level.

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: 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