how about another chart? CTXS

So the markets are showing staying power but no one is going to be a true believer until the S&P can break the highs of a few weeks ago and more importantly the highs of mid-February. Consensus is fairly mixed whether we are in the middle of a double-top or just consolidating before breaking out to new highs above 1344. The 200 day SMA and EMA are both providing nice support and earnings season will probably be the catalyst that moves this market higher (or lower.)

In the meantime, we continue to search for the strongest stocks that are moving higher and the weakest stocks that are moving lower.

Most recently we profiled RIMM and our trade thesis. We continue to maintain that position with belief that it has more room to run to the downside.

Today, the focus is on Citrix Systems, CTXS. The stock is at essentially all-time highs. It is a strong company with a smart management team, best-in-breed products and fundamentally the company has been growing both top-line and bottom-line numbers. Technically, the stock has been forming an ascending triangle since August 2010. The stock has been bid up to the low 70s several times before meeting resistance and selling off first into the mid 50s, then again to the low 60s and most recently into the high 60s. Each time the stock sells off, buyers step in earlier to buy up shares. The psychology of the investor/trader/buyer is that they have a positive outlook for Citrix and are buying the pullbacks with the hopes that it will be moving higher in the near future.

The stock broke-out to all-time highs in early April and has pulled back to the low 70s and is consolidating. What was once resistance has now become support. This is Technical Analysis 101. We are very recently long the stock from the low 70s on the initial move and anticipate a move higher to the low to mid 80s in the near term. Our stop is the low 0f 8 days ago. The stop is best defined as any print with a 71 handle. If this level is reached we will sell out of the position since it will confirm our thesis was wrong since the stock would have broken support, changing the dynamics of the trade set-up.

CTXS reports numbers after the close on Wednesday, April 27th, giving only 7 trading sessions left before the earnings hit.






In other news, oil has been trading on either side of $110/barrel, gold flirts with all-time highs, the Japan Nuclear Meltdown is occupying less of the news and the VIX has drifted back to the recent lows in the 15s. It will be interested if the VIX can solidly move to the 14s or will another Armageddon scenario drive it back up?


DJIA 12,341
SP500 1,319
Nasdaq 2,764

RIMM clings to the mid $50's

Thought a chart would be a nice change of pace. This is a stock that we are currently short. The company reported disappointing earnings last week. The general story for the bears is that even though Research in Motion and its competitors are in an expanding market, RIMM's products are capturing a smaller percentage of that increasing 'pie' and losing market share to the likes of Google's Android and the ever-popular Iphone. Their tablet product has been underwhelming and the chart has "negative outlook" stamped all over it. The stock gapped down below its exponential 20, 50 and 200 day moving averages in response to the earnings report and management's comments. Technically, it broke two very well-defined upward trend lines, the most recent dating back to late October 2010 and a longer upward trend line that began in mid-August 2010. Most recently, during the last week there has been continued downward pressure on the stock down to the $56 mark where it has found near-term support. Below $55 there is a large gap to fill and the next level of support is at $50. We are shorting this stock in anticipation of it making that move to $50, thus capturing a $6 to $8/share profit on the position.

All for now.