Wednesday, October 18, 2006

Trade Ideas: NCV, MIR, EQ, CMA, GPS, TR, BNK, ABK

The Dow just doesn't want to hit 12K, but early weakness didn't lead to bigger losses. Volume climbed to register a distribution day (a rare appearance given the frequency of accumulation days over the last 6 weeks). The semiconductor index was the big loser as it reversed off the 200-day MA. The Trade Ideas scan maintained a bullish stance; the 8 picks below covered a time span of 4 minutes - not bad given the resistance reversals in the broader market.

Of the 8 stocks, three: Gap (GPS), Tootsie Roll (TR) and Banknorth (BNK) have managed bullish crosses of their 20-day/50-day MA inside the last 2 months. Mirant (MIR) and Ambac (ABK) have suffered bearish crosses of these averages over the same time period.

Comerica (CMA) has shaped a handle from a 6-month base; stops on loss of $56, buy break of $58, projected target of $64. Gap (GPS) has broken through 12-month highs and should be good for a run to $22; stops on loss of $19. Trend followers should look to Ambac (ABK), although the stock has suffered a bearish reversal in its 20-d/50-d MAs, its yearly chart remains in a bullish uptrend.



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