Saturday, February 28, 2009

Cowgirl in the Sand (back pocket eligible long list for plunge+reversal)


Whether we flush-plunge now or popcorn further, back-test and then plunge, I'm fairly sure the L-button on the elevator is close at hand.

So while I'm focused almost entirely on the short side at the moment, an elevator drop would set the stage for a terrific counter-shot coming out of the panic. There are plenty of bears in the same pond here, which means a panic will likely be short-lived, even if severe.

Hence the back-pocket list of eligible longs is in order.

While certain oversold, overbroken, lifeless uglies will present brief counter-swing opportunities the day we turn (if timed correctly), the below list represents higher-relative strength, aggressive growth names still surviving on the charts and having a much better chance at becoming intermediate-term (IT) long opportunities; coming out of a panic low. This is not a buy here-and-now list. Rather, if the floor falls out and the market carves-out a classic key-reversal, a counter-trend rally should be good for anywhere from 33 to 66% higher for the broad market (from new intraday-low territory up to the ultimate intraday-highs).

In more direct terms, I'll be looking for higher relative-strength names which do not take out their November lows on a panic, and preferably do not breach December and/or January lows either. This list is a little early, since some of these names may end up breaking such levels, but in the meantime it is my best early guess at future potential leadership. Once we've flushed and then firmed, anything below which did not carve lower-lows in the end is a green light for an IT trade (in my opinion - as always, don't do what I do; at least not because of anything I've said).

(early) Back Pocket List of Eligible Longs:

Technology:
SNDA
STAR
EPIQ (thin)
NTES
BMC
TNDM (thin)
IDCC
NCIT (very thin)
MANT
CHKP
NTCT
TSYS
OTEX

Energy (mostly refiners at this point):
IOC
HOC
WNR (reports 5 mar)
SXL
NRGY
TSO
INT
NSH

Financials:
GS
NITE (11% short int.)
(others will be determned after the dust settles - and many of the future winners do not yet exist, as they will be newco's born from ashes of the fallen uglies)

Medical/Biomedical:
MYGN
(group is in flux, recently breaking down badly; too early to compile winners/survivors)

Ag/Fertilizers:
SYT
SQM
POT
MOS

Retail:
NFLX
AMZN
ROST
BIG
DBRN
ARO
ORLY
MNRO (very thin)

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