Nightly Stock Picks, February 25 2008

Posted by Blain Reinkensmeyer
February 25, 2008 at 9:31 pm

Big day for the groups /sectors featured here on Stock Trading To Go last night. Fertilizers, Steel, and Oil all ran nicely with more than a dozen stocks breaking to higher highs.

The overall market was up, but volume was lower then Friday which still leaves us in with an uncertain aroma in the air. As usual I will start tonight’s stock picks with the NASDAQ and SPY (S&P500 ETF).

NASDAQ Composite

Lower volume today doesn’t help us much. The same symmetrical triangle stands and my target numbers for this week are still in tact.

SPY (S&P 500)

May potentially be a ascending channel forming on the SPY, which is typically bearish. Look for resistance just under $140 and the 50 MA (blue line) possibly this week. A break below $135 on strong volume would signal a bearish break and would most likely trigger lower prices.

Celgene (CELG)

On the contrary to ascending channels, descending channels are usually bullish. CELG today technically broke out this descending channel on good accumulation volume, and at the close of $56.49 is a buy. The stock should move higher from here, 1st target price would be $60.

Mechel Steel Group (MTL)

Can’t see it with this chart but MTL reversed today after gapped up above $130 and closing below $123. MTL was upgraded today but this gap could be a exhaustion gap which would signal a rest for now. MTL is a buy at $131.50 with heavy volume, look for buying opportunities on weakness.

A K Steel Holding (AKS)

As originally called, AKS should now see resistance near $54 highs. The stock had anther accumulation day today and is up some 8% since the $49.50 buypoint. AKS is in the same group as MTL and STLD which is next up.

Steel Dynamics (STLD)

Another good day for STLD, but with the declining volume and the stock closing just under $62 near $61 resistance, a pause could be in store for STLD.

I took my 10%+ profits from the original buy point today and am looking to re-enter on any weakness.

Dry Ships (DRYS)

I originally featured DRYS at $77.77 in late January, and now the stock is forming a decent base. Next buy point on DRYS is $89 on good volume.

Mosaic (MOS)

Another break today on high volume as MOS closed up over 7% to $117 and cleared $116 highs. MOS is up nearly 17% since our $101 buy point and should move higher from here.

Potash (POT)

POT and MOS are just two fertilizer stocks red hot right now (CF is another). POT had another strong accumulation day today moving to new highs and is up 13% since the original buy point of $145.

Devon Energy (DVN)

If you were reading closely, I commented on the DVN retracement to $95 last Thursday night as a buying opportunity, “Today DVN retraced its steps from yesterday to close down at $95.89. For those who missed the original break above $95, you could now take a position.”

DVN has moved up and today cleared my 2nd buy point of $100.

Hess Corp (HES)

A much needed confirmation accumulation day for HES today. Volume still lower then the average, but with today’s close of $97.59 the stock is comfortably higher then our buy point of $94. Today HES also filled the gap range from 01/04/08.

Illumina (ILMN)

I commented on ILMN on the 14th stating, “The stock may have reversed today, but it came with lower volume. I think Januaryâ€™s highs of $75.20 will be tested.”

ILMN today cleared to new highs on affirming accumulation volume and should continue to move higher from here.

Carrizo Oil & Gas (CRZO)

My speculation play has panned out for now, highlighting last Thursday, “CRZO is a buy right here at $54.41 with a tight stop at $52.90.”

CRZO today closed at $56.40, and is set to test $57.38 highs.

Alongside these picks some stocks I mentioned last night had great days today: CPST, MON, CMED, BZP, and EOG.

Heads up, tomorrow (Tuesday night) I will be off as Sean Hannon will contribute his weekly market commentary. Nightly Stock Picks will be back Wednesday night.

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Comment by Jim

2008-02-26 09:24:03

This is an awesome post! Thanks so much for the technical look. I have been an interested buyer in a lot of the stocks mentioned, namely DryShips and Celgene. DRYS has been so volatile after their explosive growth, and the fundamental look at dry shippers looks somewhat dim in my opinion though. This is really the first positive information I have seen regarding the stock so I will definitely take it into account. Celgene was obviously one of the big movers yesterday, and it is good to see information suggesting they aren’t done yet.

Keep up the awesome work… do you have any technical work in the coal industry? Coal has been doing great as of late and I’d love to see some more information to back up investment strategies.

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Comment by Richard

2008-02-26 12:57:51

Great great work. I love your analysis on breakout stocks. I was wondering, though, do you also do analysis on when to sell? Is there a way to see when a momentum stock will fall?

I bought Mosaic largely on your recommendation at $95. I sold at $109 last week to lock in some profits, but I clearly sold too soon. I also own Potash and have made 35% in four months. I know sooner or later the momentum will slow. If only we could see the future…

I’m looking to pick up DVN soon, too. Thanks for all the good work.

Comment by theWild1

2008-02-26 15:36:33

really great job on the breakdown of every stock

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2008-02-27 19:59:48

[...] I said on Monday night, next resistance for SPY at the 50 MA and $139 - $140ish which we have now seen. A break to out of [...]