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Early Bird Trading: Plays on a Soft Open


...many traders will be on hold ahead of tonight's report from Google.


Good morning Minyans.

Yesterday sure was a roller coaster and I for one believe it did wonders on shaking out the weak holders and preparing us for what possibly could be our next leg up. Last night we had more positive earnings reactions from eBay (EBAY) however the initial euphoria faded and the stock is set to open lower than yesterday's close. If the stock can muster some dip buyers and takes out recent highs it will be the 2nd of the Dirty Dozen to break out and I will look to nibble some shares on the break, but leaving room to add in the future, as I am sure it will also remain choppy.

I suspect that many traders will be on hold ahead of tonight's report from Google (GOOG). The pause seems prudent however I am going to work very hard on letting the individual charts speak and pretend I know nothing of any pending news. We have a soft open on our hands which I like to see. Gaps higher often invite selling as we saw yesterday, and at least a sedate start allows us to gather steam throughout the day.

Not much has changed from yesterday's list. I started averaging into Charles Schwab (SCHW) and the intra-day rebound was encouraging. The stock took a pretty good hit but bounced back strong and is another example of why I will typically wait until day end to take my stops.

I am still interested in averaging in a bit more ahead of the break however I will wait until a push through $23.01 before adding my final piece.

Blackboard (BBBB) also weathered yesterday's action fairly well and I suspect weak hands were replaced by strong hands during the intra-day rinse. This pattern is similar to SCHW however the stock has yet to report 3rd quarter earnings. I like the idea of holding a small position here and wouldn't be surprised to see a pre-earnings run. If the stock does push through recent highs of $47.84, I will more than likely add with a tight trailing stop around the $47.75 area.

I have a few shorter term trades on the radar, but I want to give the market some time to settle in and get a better feel for where we go. I will post these trades on the Buzz & Banter when I take action and update Minyans accordingly.

The negativity continues to grow out there and while all arguments are sound, the market continues to shake them off and move higher. Remain open minded and use your speed and flexibility to keep you on track.

Go get 'em today.
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Positions in SCHW, BBBB

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