us stock market, trend trading stock

- Market fends off higher oil and interest rate roller coaster, closes a positive week positive.
- What a surprise: jobs top expectations, following the economy back up.
- Economy is improving, so are earnings expectations again too low?
- This current rebound looks a lot like March.

Here's a trade from "The Daily" and insights into our trading strategy:

Chart by StockCharts.com

Company Profile
In mid-June CTRP used the market selling to test the mid-May breakout from a nicely formed 15 week cup with handle base. Big surge on strong volume as it gapped higher. Given the gap we decided to wait and let it test and then move in. Glad we did because CTRP made a full test to fill that gap; at the time of the test the 50 day EMA had risen to the point of the breakout, a good double layer of support. Thus we took a great interest in CTRP on this test of key support.

On 6-18-07 CTRP made its move a strong volume and price jump off the 50 day EMA. We moved in with some stock positions at $76.38 and some September $75 strike call options at $7.20. CTRP did not continue the break, however. It faded back on low volume once more, but this time it held near support at the 10 and 18 day EMA. On the last day of June it found its legs again and broke over the June high on rising trade. We saw that move and we entered more positions at $79.26 along with some more September $75 strike call options at $11.30.

After that test of near support CTRP had its legs. It surged $5.20 on 7/03, another $2.47 the next session, and added $2.16 on Friday. With that move it hit our initial target and we decided to take part of the gain off the table, banking 15+% on our initial stock and 109+% on our options (sold at $15.10 or $790/contract). As for the second positions we banked some 11% stock and 73% option gain. We left half of our positions on the table as CTRP is making a strong run and we don't want to cut off a winner that is on the move.

We love buying leaders in good positions to move. When they break higher we move in as that shows us the big backers are piling in. When we get another pullback that is not too far into a run we use that to move in again; averaging up into winners helps focus your investment assets on proven leaders that are already moving and in position to make you even more money. That means we are not guessing about whether a stock that is beaten down is going to make a recovery because we see the strength and we are investing in that strength. That way we can make serious money in shorter periods of time, limiting our exposure to the market. With CTRP we made great money in less than three weeks and we still have half of our positions to work for us

Learn more about "The Daily" with Stock Picks! - Issued 5 Times Per Week

Playing stock splits can be very profitable, but it takes know-how. Our stock split service focuses on three main types of plays:

1) pre-announcement (where we forecast an upcoming split prior to the company making the announcement); 2) pre-split (these plays are made in the days leading up to the actual split day); and 3) post-split plays (plays made after the actual stock split where the stock is showing continued or renewed strength).

For post-splits, we can play them as we would pre-splits (very short term), but we prefer to stretch our horizons, playing the trend. When playing options, we look further out, 2 or more months at least. We let the trend carry us along if there is one, but we will also take profits if the technical pattern degenerates, e.g., breaks a trendline. The main difference between post-splits and pre-splits plays is that we really have to like the pattern. Pre-splits can run right before their splits even with poor technical indicators. For post-splits, we are looking at the stocks from more of a longer term "would I buy this stock at this juncture?" position. Now there are times when a hot stock splits and investors pile in to get in while the stock is 'cheaper.' We play those, but with more of a short-term, pre-splits mentality in that we will be ready to get out fast if the momentum fades.

Remember, everything we do has to pass muster with the market that day ... don't fight the market on these plays.

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Here's a post-split play and our current analysis.

Chart by StockCharts.com

Company Profile
EARNINGS: 7-24-07
STATUS: Ascending triangle. After an April breakout from a big 12 month base followed by a strong run to early June, JEC has consolidated and set up for its next break higher. It has formed a shorter 5 week base with constant tops at 60 and rising lows in the base. That is building pressure from below for the next explosive move upside. Indeed, volume surged back above average Thursday and Friday as JEC bumped at the prior high. Looking for that continued strong volume as JEC makes the break higher this week from its base.
Volume: 924.303K Avg Volume: 796.516K
BUY POINT: $60.22 Volume=1.2M Target=$69.38 Stop=$57.98
POSITION: JEC JL - Oct. $60c (54 delta) &/or Stock

Learn more about our Stock Split Report and how we have made gains of 321% with our powerful stock split plays!
Details Here.