February 4, 2008
RealMoney charts for February 4th.MSFT, DGX, DRYS, NM, BGP, and GNK
The market wasn’t too thrilled with MSFT’s possible acquisition of YHOO, and the stock sold down nearly 7% on Friday. But let’s set some levels here. First, there has been a significant amount of trading at the $28 – $30 level in mid-to-late 2007. That sets up the potential for a second bout of buying as the stock pulls back to give folks who missed it last time a second chance to buy. But with nearly 300 million shares changing hands on Friday, I’d be looking at the intraday range to define the new trading channel for a while.
DGX had consistently bounced off $48 for the past couple of years. No reason to believe that’s going to change, so I’d keep a stop just below that level. It’s not at a bad entry level right now.
DRYS is back above $70, which had been support in November and December. This stock is on its way back to test $80. But with the stock up 6 of the last 8 days, it’s due for a rest. I’d look to buy on a pullback.
NM had been trending lower for the past few months. But last week, the stock ran more than 20% on decent volume. I’d be a buyer on any pullback, but would be cautious about buying now — it has been higher 7 of the last 8 days. That’s a stock in need of a rest.
BGP appears to be reversing the prevailing downtrend, breaking above resistance on above-average volume, and then consolidating at the higher level. Now the stock is poised to move higher once again. I’d be a buyer on a move above Friday’s high.
GNK has been on a tear since the mid-January low and is now back to test the November and December support line. While the stock could just keep moving higher to test $55, I think the higher probability trade is for it to pull back a bit on profit-taking. When it does that, I’d buy.
Be careful out there.