Trade Ideas for February 24, 2010

After yesterday’s resounding victory for the bears, today we got a market heading into the open that is slightly negative and could be looking to extend yesterday’s decline. With consumer confidence hitting a 10-month low, there are a lot of people on edge as to whether we are truly out of the woods. In my humble opinion, I don’t think that we are, and until I’m proven otherwise, I am going to continue shorting this market.

I’ll also be taking my position in Gap (GPS) off the table today, and possibly replacing it with Amazon.com (AMZN) which still has the making of an excellent short setup. The reason for taking GPS off is due to their earnings release tomorrow. I can’t stand holding positions through earnings, and I definitely am not making an exception to my rule. Yes, I could make a whopping amount of profits if they report a bad quarter, but I also stand to lose a bunch if they don’t. And since I have no idea as to which way it could go, I am going to take my position off the table. Despite me being very passionate though about not holding stocks through earnings, I still manage to ponder whether I should or should not, mainly because I think about the potential to make something from a nasty earnings sell-off. But I’m not going to do it.

On the economoic front, you have the MBA Purchase Applications at 7am ET, followed by New Home Sales at 10am. But most importantly you have Ben Bernanke speaking at 10am as he speaks before the House Committee on Financial Services.

Here are Today’s Trading Ideas.

Potential Swing Trade (Long): Lime Energy (LIME) – Nice inverted head & shoulders pattern in place from the latter part of last year, and has rallied since with a consolidation around the neckline of the H&S. Ideal stop-loss is 4.55.

Click here to See the Rest of My Trading Ideas.

Potential Swing Trade (Short): Bally Technologies (BYI) – Hard sell-off after its highs in January, has since rallied back up to its Fibonacci 50% retracement level, which also coincides with the 50-day moving average that is acting as resistance. Use a stop-loss of 42.91.

Potential Swing Trade (Short): Warnaco Group (WRC) – Topped in January, followed by a break of major support in February, in which it has since rallied back up to. Good possibility with this short setup, that you will see a decline down into the $36-range. Stop-loss is 44.15.

Potential Swing Trade (Short): Dolan Media Company (DM) – Technically speaking, this stock has been in a downtrend since May, and when considering that against the crazy bull-market back-drop, that in and of itself is impressive. But with a trend of consecutive lower-highs and lower-lows, this recent rally should be strongly considered for shorting. Place your stop-loss at 11.31.