Tuesday, July 6, 2010


Any stock that can manage a volume spike in a short holiday trading week deserves respect, so a quick "Bravo!" to the cable company Comcast Corp. (CMCSA), whose volume so far today (about 105 minutes before the close) is 35% above Friday's, on a price increase that has traversed 3% low to high so far today.
CMCSA $17.64

This is not to claim that CMCSA is a bull play. Not yet, at least. But with earnings looming -- the announcement will be made before the open on July 28 -- an increase in trading volume with an upward price bias must be taken seriously.

The price today, however, has failed to deliver on its early promise. It peaked intraday 9¢ below a very near term reversal level and then dropped back to within the trading range of the last three days.

CMCSA has been trading sideways since early May. An end to that pattern would require a persistant breakout above the most recent swing high of $18.88.

Yet, today's action contains the early stirrings of bullishness. The macd is moving up toward the zero line, and the fast stochastic is rising through the neutral zone.

In the very long term, CMCSA has behaved like a tech stock. It peaked at $36.42 in December 1999, dropped with the collapse of the Internet bubble, and since then has zagged, zigged and zagged between $30 and $11 (with a few breakouts and breakdowns). It is, at present, in the lower half of that range.

I consider CMCSA to be a candidate for a sideways play, such as with an iron condor with maximum profit between $17 and $19, or as an income play, such as with a covered call. The stock pays a 2.13% dividend, so traders have a chance to profit a couple of ways -- always a good thing in my book.

Reversal Levels
  • $18.88, +7.0%
  • $18.19, +3.2%
  • $17.65 <== You are here.
  • $17.07, -3.3%

The Great Reflation: How Investors Can Profit From the New World of Money
OK. The credit bubble burst. Housing, burst. Shockwaves reverberated. Markets collapsed. What lies ahead as we reemerge from the wreckage.

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.
  • psar - Parabolic Stop and Reverse
  • adx - Average Directional Index
  • pps - Person's Proprietary Signal
  • ma20 - 20-day moving average
  • macd - Moving Average Convergence-Divergence
  • sto - Fast Stochastic
About the glance: The colors indicate the state of each signal.
  • trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
  • adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
  • psar, pps, macd: green for bull mode, red for bear
  • sto: green for overbought, red for oversold, yellow for the neutral zone.

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