Momentum Trader Report: 05/20/08

20 May

Posted by Momentum-Trader as Momentum-Trader Report

The market had a significant down day with both the Dow and S&P 500 logging another distribution day. The Nasdaq was down also, but on lower volume than yesterday, so it technically didn’t count as a distribution day.

The pressure on the market came from inflation fears and still higher oil prices. Since I have been (nervously) trading mostly oil stocks, it was a great day for my portfolio, and yesterdays breakouts followed through nicely.

There was one stock in the Watchlist for today. It was BZP, an oil stock that triggered into the close and is looking good here. This has become my favorite stock to trade, since it usually offered some nice short term gains.

I had set the entry point a bit high with this one. If you are playing along, use your own analysis to set your entry points.

There was nice follow through on all three stocks that triggered yesterday. Most notably, RRC, which closed up over +4% today.

VLNC, which triggered yesterday, was up over 5% at one point today, and BRY reclaimed much of yesterday’s pullback.

One stock I am still holding from earlier this month is GGB. It’s making me a bit nervous up here. I have sold some shares already, but its now up 30% from the entry point posted here.

Among the big oil movers today was CLR. This was a pick that I posted here last month. The stock moved over 23% today on news regarding an oil well in North Dakota. No, I don’t own this anymore.

To see even more ridiculous moves in oil stocks lately, check out the charts of PDO and MXC. They have gone absolutely parabolic. You just know that when oil does correct, it is going to be dramatic!

I looked hard for some charts to trade tomorrow, but didn’t find anything to my satisfaction. Most of the momentum is in oil and energy, and they are very extended right now. Too bad because the market might find some buyers tomorrow after today’s action. But I do think a correction is due, so I don’t want to take too many risks here. So I plan to spend tomorrow defending my profits.