Joel Elconin
Joel’s introduction to trading was in the Standard and Poor’s 500 Index futures pit at the Chicago Mercantile Exchange. During his time at the CME, he was involved in Index Arbitrage as well as trading foreign currency futures and options. From 1994-1999, he was a proprietary trader for Olde Discount Corporation. Following his tenure at Olde Discount, he founded the Detroit office of Bright Trading, LLC. Since 2003, Joel has been an independent trader researching and developing proprietary indicators and trading systems for the equities and futures markets. In 2007, Joel joined JC Trading Group as a Market Consultant and trading supervisor.
Posts by Joel Elconin
Breakout and Shake out in MSFT
March 6, 2013 - 5:00 pm
by Joel Elconin
in Articles
On many occasions, a trader can get caught in a stampede by going “against the herd”, when fading a breakout, especially if they do it too often or do not employ favorable risk-reward ratios. However, the recent price action in MSFT is one example of how this strategy can be profitable. On Tuesday, momentum and technical traders piled into MSFT as it cleared major resistance at the 28.20 level, trading as high as 28.54 before retreating to close at 28.35.
The boat was loaded with new short-term longs playing the breakout, but no trade ever goes smoothly in this market. This morning, the EU fined MSFT $731M (about 1% of their current cash hoard of $68.10B) for violating settlement terms. This caused weakness in the stock, flushing out those short-term longs in early trade.
But the stock found key support just above Monday’s low (27.70), putting in a potential double bottom, then rebounded to close at 28.09. With the short-term breakout herd washing out this morning, the stock may be setting up for another march towards the 29 level. For now, a rally above Monday’s close (28.35) may be enough to fire up the “herd” once again.
Here are the key support and resistance levels to focus on for tomorrow:
| MSFT
Price |
Significance Level | Reason | |
| 29.01 | ****** | 11/12/12 high | |
| 28.54 | *** | Tuesday high | |
| 28.35 | * | Tuesday close | |
| 28.23 | ** | Wednesday high | |
| 28.09 | CLOSE | ||
| 27.93 | * | ||
| 27.70-.78 | ****** | Monday/Wednesday lows | |
| 27.62 | * | ||
| 27.52 | *** | 4 day low |
Stock Chart of the Day – NFLX
March 5, 2013 - 10:12 am
by Joel Elconin
in Articles
Since its upside surprise earnings release on January 23rd, NFLX has added nearly 80 points. However, it appears to be finding some resistance just under 200 and is beginning to consolidate over the last six trading sessions. More importantly, three of the six lows during this phase have been between 175.45-176.66. Therefore, if NFLX retreats to that zone once again, it will be the fourth attempt, and it very well may blow right through it.
If the bottom of the trading range is breached, there may be minor support at 171.00 and major support at the double bottom from February 1st (163.88) and February 2nd (162.78). For NFLX bulls wanting the rally to continue, a close above the double top made in the mid-197 handle may confirm another leg up in the unprecedented rally.
Key support and resistance levels to focus on:
| NFLX
Price |
Significance Level | Reason | |
| 196.45 | ** | High close of move | |
| 192.13-.20 | **** | Thursday high/8 day highs | |
| 190.08-.34 | ** | Monday/Friday highs | |
| 186.21 | * | ||
| 181.21 | CLOSE | ||
| 175.45-176.66 | *********** | 3 of 6 previous lows | |
| 171.00 | ** | 2/05 low | |
| 162.78-163.88 | *** | 2/01&2/04 lows | |
| 160.32 | ** | 1/31 low |
Stock Chart of the Day: GS
March 1, 2013 - 7:53 am
by Joel Elconin
in Articles
GS has been one of the leaders, as the financials have instigated the last up move in the market. Since beginning the year, GS has rallied over 30 points. However, during the last seven trading sessions it has relinquished almost nine points to close at 149.76 (pushed down by a large sell on close imbalance yesterday).
After dipping to 146.71 on Tuesday, the rebound rally has found major resistance in the 152 handle, just off the 50% retracement of the decline. Unless GS can return to the aforementioned levels, it may be destined to retest the recent low. If that level is breached GS may find minor support at 143.30 and major support at the January 17th low of 139.62.
Today’s support and resistance levels:
| GS
Price |
Significance Level | Reason | |
| 152.05-.40 | ***** | Wednesday/Thursday highs | |
| 151.52 | ** | ||
| 150.64 | * | ||
| 149.76 | LOW/CLOSE | Thursday | |
| 148.88 | * | ||
| 147.77 | * | ||
| 146.71 | **** | Tuesday low | |
| 145.00 | ** |
Stock Chart of the Day: HPQ
February 27, 2013 - 4:55 pm
by Joel Elconin
in Articles
One of the dogs that has been barking as of late is HPQ. After announcing stellar earnings and raising guidance on February 22nd, it broke out of the major resistance at 17.15 and has not looked back.
However, during the last three of four trading sessions, the issue has topped out just under the strong psychological resistance of 20. Even in today’s furious rally, it was unable to close above 20. With today’s close at 19.77, it will have a running start at the institutional sellers perched at that level and it may be taken out. Above that level, there is only minor resistance at the July 2012 high of 20.42 and major resistance at the June 2012 high of 21.61. If you’re looking to protect profits on the long side (or trying to breakeven from a wayward purchase) a break below the double bottom from Monday (19.03) and Tuesday (19.05) may be a reason to exit the issue.
Support and resistance levels for tomorrow’s trade:
| HPQ
Price |
Significance Level | Reason | |
| 20.42 | *** | 7/05/12 high | |
| 20.25 | ** | 8/21/12 high | |
| 20.10 | * | ||
| 19.83-.92 | ******** | 3 of 4 previous highs | |
| 19.77 | CLOSE | 19.79 – Tuesday close | |
| 19.61 | ** | Wednesday low | |
| 19.45 | * | ||
| 19.20 | * | ||
| 19.03-.05 | ***** | Monday/Tuesday lows |
Stock Chart of the Day: BBRY
February 26, 2013 - 5:39 pm
by Joel Elconin
in Articles
Different name, different stock symbol, similar products and similar stock price is the best way to describe BBRY. Since the symbol change, which occurred when the issue was at 13.02, the stock has catapulted to 17.22, but has now returned to this level. With today’s attempt to break the major support at 13, the technical outlook for BBRY has further deteriorated.
In the short term, BBRY found support today at 12.56 and rebounded with the market to close at the magical 13 level. If 13 can hold early in tomorrow’s session, the bulls can approach today’s action as a possible end to the correction from 18.22. If not, and 12.56 is breached, BBRY may be heading back to single digits.
Here are the key support and resistance levels to focus on:
| BBRY
Price |
Significance Level | Reason | |
| 13.76 | *** | Monday high | |
| 13.45 | ** | Tuesday high | |
| 13.26 | * | ||
| 13.06 | CLOSE | ||
| 12.81 | * | ||
| 12.56 | *** | Tuesday low | |
| 12.40 | * | ||
| 12.27 | ** | ||
| 12.15 | **** | January 31 low |
