« 2009 October: Stock Trading Picks »

The markets experienced a choppy month. There was a drop early in the month, following by a sharp rebound to new highs, which was then followed by a decline in the last two weeks. When all was said and done, most stock traders would have felt satisfied with a net unchanged portfolio at the end of the month. We were able to pull off a few winners on the Stock Picks front; the Options Picks lists though had several very handsome winners.

Market Action

Let's take a look at the action on the broad S&P-500 Large Cap index, in order to get a feel of market conditions, before moving on to a selection of stock trading picks closed in the month.

SPX had closed September at a level of 1056. The index had a harrowing first day in October, losing around 25 points. Thankfully, the bulls will testify, it wasn't quite a sign of things to come in the rest of the month. The markets quickly found support from their lower bollinger bands and bounced strongly towards the upper bollinger bands.

Resistance was found at the upper bands once again, however, and prices began to fall over the last two weeks. The index ended up with a net loss of around 2% for the month.

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Long Stock Picks

The month of October was one that you'd have found it much better to have been trading options than stocks. But here's a look at a few Stock Picks that pulled in profits nevertheless.

HOG had bounced off support at 21 and the 0-line on MACD, when we featured a long stock pick on it with a trigger based upon a closing above the 20-day Moving Average.

ACI had found support from old resistance at 20 and from the centerline on RSI, when we featured a long stock pick - as well as a model portfolio position - in the stock.

BNI had found support from the lower line of a intermediate/major trend channel and from the -1 level on MACD, when we featured a long stock pick that was to be triggered by any breaking of the 20dMA. The stock jumped a few points. allowing for a quick profit, before consolidating once again.

DD had found support from its lower bollinger band and from the 0-line on MACD. There was also a positive centerline crossover on RSI and when prices moved back above the 20dMA, the trade was triggered. A profit of a couple of points was available less than a week into the trade.

MMM was coiling in the 70-74 range when we featured a long stock pick on the stock. A profit of two points was available soon after the breakout.

ANF was featured when the stock was set to break out of an ascending triangle, after having found support from the 0-line on MACD. A quick 7-8% profit was there for the taking, following the breakout..

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Short Stock Picks

Now, let's take a look at a selection of short (bearish) picks that were closed during the month.

CY was showing negative centerline crossovers on RSI and MACD, as well as a descending triangle on price, when we featured a Short Stock Pick on the stock. The stock moved nicely post-breakout, providing a profit of 13-14% within two weeks.

AMGN was also showing a descending triangle. The stock promptly moved 6 points, after the break of support.

HD was showing a head & shoulders pattern with a staggered neckline, as well as as negative centerline crossovers on RSI and MACD, when we featured a short stock pick on the same.

NKE was showing a negative divergence on RSI that was worth a small profit, before the lower bollinger band came to the rescue of the bulls in the stock.

WAG was showing negative divergences on RSI and MACD. The stock dropped as much as 5-6%, before turning around and triggering the stop, which left a smaller profit on the trade.

JCI was trading at the upper end of a wide rectangle, when we decided to feature a short pick that was to triggered upon any breaking of minor support at 26. The stock breached support immediately thereafter and promptly moved to the lower end of the range, where profits were booked.

ORCL was featured as a short stock pick after the stock broke an intermediate trendline and was showing negative centerline crossovers on RSI and MACD.

TOT was showing a negative divergence on RSI when we featured a short pick on the stock. There was a drop of a few points, before the lower bollinger band came to the rescue of falling prices and a profit of a couple of points was booked.

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That was a look at selected stock trading picks from this month. In addition to the stock picks seen above, there was a large number of big winners on the Options Trading Picks list. For a look at those options trading picks and trading picks from other months, take a look at Past Trading Picks.

For a more in-depth look at our trading methods, we invite you to read the write-up - 'Identifying the Best Trading Opportunities.' 

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