Trade Ideas for January 28, 2010

As I said yesterday, today will no doubt be pretty crazy in regards to the number of variables out there influencing the market’s direction today. Not the least, you have the affects of yesterday’s FOMC Statement being further digested – in fact I have seen it at times, where the following day of its release, do a complete 180 on how the market initially viewed it. So while Wall Street seemed to embrace the optimism put forth by the Fed, I don’t put it out of the realm of possibility today that the market could ultimately decide to puke on their comments.

Then you have President Obama’s State of the Union speech last night, which I didn’t even bother to watch – its not like all of a sudden our leaders are going to be transparent and honest with us. Besides I have a hard time watching the two “public servants” sitting behind the president with their botox-laced smiles (ouch! that was harsh!) – it just doesn’t make for “good-tv”. So instead I watched a few of the excerpts this morning and can’t say I was “wowed!” or inspired. However, during the course of the speech the futures did shoot up, but has since given back those gains.

We have at 8:30am ET this morning, the Durable Goods Orders along with Jobless Claims. On the earnings front, you have Amazon (AMZN) announcing, along with AT&T (T),  Ford Motor (F), Microsoft (MSFT), Motorola (MOT), among the plethora of other companies reporting too. We currently are seeing the futures in positive territory with the Dow up 19 points, followed by the Nasdaq at 1 point, and the S&P at 2.5. However, this can all change in the blink of an eye, when considering the number of reports coming out this morning.

Here are Today’s Trading Ideas…

Potential Swing Trade (Long): Hartford Financial Services Group (HIG) – This stock has no doubt seen better days – you can be sure of it! However, after pulling back substantially from its highs, HIG looks poised to make a move upwards, assuming the market cooperates. You have some solid support underneath as a break of this support would be catastrophic for HIG. The overhead prospects looks fairly good, with resistance coming in the mid 28’s. So if you are able to get a move out of HIG, it should provide a handsome reward. An appropriate stop for this trade would be 23.91 or a more liberal stop would be at 22.59.

Others to consider: Boston Scientific (BSX)

Potential Swing Trade (Short): Advance Auto Parts (AAP) – Not a lot of good setups to the short side right now, that is why it would be really helpful if the market could rally some here, so that the bears could reload. Nonetheless, we do have an opportunity in AAP. In the second half of last year, AAP put in an inverse head and shoulders pattern, that completed itself, but the rally has since showed signs of breaking down, and by doing so, putting in a lower-lower, and right now attempting to put in a higher-low as well. If this happens, you have a nice trend reversal to the downside. Stop-loss here should be at 41.81.