Trading Ideas for the Week Ahead: September 10

investing chart, good investments, going higher, up arrow, investing performance, growth, successBy Alex Salomon
After taking a “break” from updating this column (while trading extremely actively — too actively in fact to keep up with swing ideas), I am refreshed and back to review previous trade ideas/positions and preview the week ahead. You can follow most of my real-time updates and action on Twitter @Alex__Salomon where I comment on many of the stocks covered in this weekly column.

Before we attack the week ahead, though, let’s review the previous positions still open:

1) iShares Semiconductor Sector (SOXX) – “Looking for that double-bottom at $48 and a repeat of Nov./Dec. 2011. SOXX hit its first target of $52 (scaled 1/3) and still has outstanding targets of $56 and $60. So far, so good, it’s strong and staying strong. I sweated it a bit but it’s solidly in play!”

2) Apple (AAPL) – “The plan unfolded! From last week: “[…] take profits at $621.50 and $640 with a $40 trailing stop. We’re on!” Profits were taken (at 2 prior targets), the position is down to the last third with a $40 trailing stop for now. The more we go up, so does my trailing stop. Eventually, in a deeper correction, this last third will be stopped.” But so far, so good.

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3) Russell 2000 iShares (IWM) – The trade has been “on” for almost 1 month and while first and second tier profits were taken at $81 & $82, the stop has been raised to $80 and converted to a $3 trailing stop (currently at $81.40).

4) Teradata Corp (TDC) – After taking profits in the prior weeks, I still have 50% of the position with a recently loosened $4 trailing stop (from $3) trailing stop, resting at $76.20 and will keep it on as long as possible (until the trail is stopped).

5) Leapfrog (LF) – LF in at $11.00, use $10.50 as risk (stop) — which was triggered and forced an exit of the position.

In fairness, I should also mention that previous positions in F5 Networks (FFIV) did not pan out (-2%), nor did VirtualWare (VMW) (-1.8%) while active trading of GASL has been extremely rewarding (accumulated 17% over the last 3 weeks) and the unexpected Guidewire Software (GWRE) offered spectacular returns (in at $27.54, tiered at $29.15, $34 and $31).

For the week ahead here are a few tempting ideas:

IPG Photonics (IPGP) is a new position started on Friday at $62.50. My rationale is a mix of signals: what looks like a very long forming cup and handle (the cup from mid-February highs to a rounded June bottoms then back up in July, the handle all through August); the bullish crosses of faster moving averages above slower ones; the current price action above the 10d SMA; the price action also above the previous 52-wk highs (from February) and with all-time highs at $75 (back in 2011), a mounting action above peak prices would open “Blue Skies”. I am uncertain that IPGP will coil and explode as quickly as GWRE just did, but I am going to keep it above $60, targeting a first reward at $70, then $75 and keep the last third. This position could take a while to unfold, but it is compelling.

iShares Semiconductor Sector (SOXX) is an existing position and I’m resolved to add to it. I was in at $48, I added 1/3 at $54 to bring my current price to $50. I am still targeting $56, $60 and new highs as rewards, while my risk is defined to $52 & the 50d SMA (to protect some gains, while giving it some leash.

iShares Emerging Markets (EEM) is also a new position started on Thursday at $39.70 (1/3 position so far). The break above $40.25 and the long defined descending trend line, coupled with possible cross of the SMA 30d above SMA 200d during the coming week and a solid macro case (the theme being a recoupling of the Emerging Markets, catching up with the US & German indices) offer attractive views to get in. Since it is only a 1/3 of a position, I want to wait for a decisive hold of the $40.25 level (my risk is at $40) and a break above $41 to add 2/3 and make it a full position.

Superbly intriguing “Teflon” stocks that seem to defy all gravity are Texas Capital BancShares (TCBI); as well “buy-and-hold” possibility Natural Grocers by Vitamin Cottage (NGVC) begs to be investigated… in the event it repeats a The Fresh Market (TFM) sort of performance.

Between these positions and trails and active/day trading on GASL and VIX, I am almost completely invested.

Lastly, on a macro view, I believe we could see a brief pause in the market in the coming week (hoping for some QE3 action, which won’t happen), followed by some hope and gains into the subsequent week (including the expected Apple release of its new iPhone), and then, a tumultuous end of September and rocky October — before launching a rally into new recovery highs by January 2013 (my “secret” target is 1550 by January 30, 2013).

As always, keep stops, trade safe, stay disciplined!!

Disclosure: At the time of writing I own Apple common stock; I own IWM; I own SOXL, a 3x ETF based on SOXX & EDC, a 3X ETF based on EEM — 3x ETFs are riskier vehicles and investors considering them should carefully read the risk disclosures written by each leveraged ETF underwriter; I own TDC calls and common stocks; I own CRM calls, and GASL & IPGP stock; I am considering building positions in NGVC the next 3 trading days.


Twitter:  @alex__salomon   @seeitmarket     Facebook:  See It Market

Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of his employer or any other person or entity.