Trade Ideas for February 18, 2010

Despite the tear the market has been on this week, the early morning hours is showing futures with a little bit of hesitation. I added three additional short positions to the portfolio with the expectation that this market cannot go much higher as it is up against critical levels of resistance. So if the market doesn’t start heading southward here in the next couple of days, then I’ll know that the short positions in my portfolio could be vulnerable, if not extinct.

On the economic front today we have Jobless Claims and Producer Price Index at 8:30am ET, followed by Leading Indicators and the Philadelphia Fed Survey at 10am. So that 8:30am time period is going to be very instrumental in shaping the market’s direction for the day.

Here are Today’s Trading Ideas…

Potential Swing Trade (Long): Renaissance Learning (RLRN) – Not seen any effect of the January/February sell-off, in fact it has consistently gone up during that time span. Historically this stock has clinged to the 50-day moving average and is doing so now, as it pulled back nicely to the previous highs of October and December of last year. Recommended stop-loss on RLRN would be at 11.11.

Potential Swing Trade (Short): Freeport Mcmoran (FCX) – After putting into a new high earlier this year, this stock has fallen pretty hard ever since, and is butting up against resistance at the lows of December. Ideal stop-loss is 79.05.

Potential Swing Trade (Short): Semiconductor HOLDRS (SMH) – The rally in the semiconductors looks to have the feeling of a bull-trap than a legitimate recovery off of its recent lows and has recently wedged itself up against major resistance levels. This trade carries a tight stop-loss at 27.15.

Potential Swing Trade (Short): Reliance Steel & Alum (RS) – Well oversold, and like other plays mentioned, has a nice level of price resistance sitting overhead. This stock already put in a lower-low. Preferred stop-loss is 46.25.