Wednesday, October 04, 2006

Trade Ideas: PPG, PRU, HDB, ERJ, SPW, HIG, PPA, MIM

A good day all round for the markets, even the Russell 2000 was able to reverse the last two days worth of damage. Closing volume will be interesting. The Trade Ideas scan was more bullish (but still not super-bullish); 8 picks covered a time span of 3 minutes. However, the frequency count was much more in line with a bullish market (even if the stocks were more defensive issues) with HDFC Bank (HDB) and Hartford Financial (HIG) appearing over 30 times during the course of the day.

Bullish crosses between the 50-day and 20-day MAs over the last two months were found in PPG, PRU (this week), ERJ, SPW (this week), HIG, PPA and MIM.

In terms of technical patterns; cup-and-handle patterns can be found in PPG (stop on loss of 20-day MA; buy break of $68; projected target of $76), and Embraer Aircraft (ERJ) (buy break of $42; stop on loss of $38.25; projected target of $48). Working right-hand-side bases are SPX Corp (SPW), Powershares Aerospace and Defense portfolio (PPA), HDFC Bank (HDB), and Hartford financial (HIG); trend traders might find interest in such stocks.



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