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MXC - Amex. Mexco Energy Corp.  If you ever wanted to trade a Pennant Up, this would have to be a perfect example.  This pattern has a measurable target price of around $69 and offers an opportunity for an exceptional trade for the short term trader.

NFG - NYSE. National Fuel & Gas Co. has formed a Darvas box entry at the 63.71 all time high following a good expansion in volume.  Recent expansions in Volume show a continuing buyer’s interest in this stock.  A breakout of the top of the box would signal an entry.  A tight Darvas stoploss should be placed just under 59.00 at the time of entry.

Trading Software Selection

You need to select a software package that not only will help you making trading decisions, but one that will be a pleasure to work with.  We recommend you avoid spending thousands of dollars on large sophisticated analysis packages and instead focus on getting yourself a charting package with basic scanning functions that will allow you to search the entire market and highlight a shortlist of potential trading opportunities.

5 Steps to Selecting the Correct Software Package:
 
1. Must be easy and fun to use.  Avoid packages that offer hundreds of indicators, multiple analysis screens and live feeds that paralyze you with information overload.  Look for a package that’s quick and easy to navigate and simple to use.  With experience, you should be able to flick through the charts and have your analysis completed for each stock in seconds.  Keep it simple, and trading will be simple.

2. Must have a high quality data feed.  It is of utmost importance that you only use the most accurate up-to-date data in your software.  So make sure that the vendor you choose is well established with a good reputation in the industry and can guarantee data integrity to a high degree.  Cheap or free data can often be inaccurate or poorly formatted so always, always pay for your data.

3. Must have functions to quickly scan a market for opportunities.  The ideal package should let you scan the entire market in minutes for changes in a stock’s behavior using numerous filters such as “find all stocks between $5 and $20 that traded over 50 million shares last week and made a new 30day high today on a Volume increase of 10 times that of the previous day”.  The above scan would for example allow you to shortlist only those stocks that are rising under strong accumulation.  A very healthy sign common in all winning stocks.  Your software may have such scans already built in else it should allow you to easily program them.

4. Must clearly display a large chart for each stock together with indicators.  A big chart displayed across the entire screen in bar or candlestick form is what you want to look for when selecting software.  Your software must also display the daily Volume and On-Balance Volume indicators to show whether buyers or sellers are in control of the stock – this is most important!  Your package should also display simple & exponential moving averages with periods you can set manually, to smooth the data.  MACD, Bollinger Bands and the Average True Range (ATR) indicators are also good to have.  You do not need to worry about other indicators to trade profitably.

5. Must not cost more than a thousand dollars and ongoing costs must be minimal.  That should be the absolute maximum amount to pay someone for their software.  The only thing you should be paying the vendor for after you’ve bought your software is the ongoing data feed.  And that’s it.  If there are membership subscription fees, software upgrade fees and other ongoing costs, look elsewhere.

Broker Selection

To help you get the best returns from your trades, you will need a good broker.  I would recommend staying away from online brokers and those offering discount brokerage and instead focus on finding a good traditional broking service.  It will cost more per trade but believe me, this will be a small price to pay for better order execution and service rendered.  A good broker will always get you in and out of the market at better prices that an automated online system and will be there for you at all times.  And this will make a difference to your profits.  Here’s a few rules on what to look for when selecting a broker.

5 Steps to Selecting a Quality Broker:

1. Must specialize in the market you are going to trade.  Ask them how long they’ve been transacting on the particular market and what their level of experience is.  Give preference to a broker that’s been around for at least 10 years and seen some ups & downs.

2. Must allow Contingent Order placement.  That is, allow you to place a buy stop, stop limit, stop loss and take profit orders that are triggered based upon the price action of the stock.  Since the last few years, a lot of brokers have finally caught up and begun offering this facility.  Don’t ever trade without it.

3. Must execute your orders at all times exactly as specified by you, without a question.  You should decline advisory service your broker may want to offer you as it can cloud your judgment.  You want a broker that transacts, not questions your orders.

4. Must be reachable by telephone at all times during working hours.  On the occasion, you may need to contact your broker by phone to discuss matters that would otherwise be lengthy via email.  Make sure you only deal with a broker who is happy to be there for you, at all times, and can be reached when needed.

5. Keep your relationship with your broker professional.  That is, your broker should probably not be your cousin or close friend. The reasons are obvious.

FL - NYSE. Foot Locker Inc has completed a Head and Shoulders Bottom after breaking out above resistance on a good volume expansion last friday.  The pattern now gives us a measurable target around 18.70.

ARBA - Nasdaq. Ariba Inc. has formed a tight Darvas box entry at the 14.10 high formed on the 19th of May.  Recent expansions in Volume show an increasing buyer’s interest in the stock.  A breakout of the top of the box would signal an entry.  A tight Darvas stoploss should be placed just under 13.00 at the time of entry.

NCOC - Nasdaq. National Coal Corp has formed a Flag Up following a breakout on large volume. Valid entry would be to now buy on a break of 7.00.  Pattern has a measurable target of around 9.00 and presents an opportunity for the short term trader.

ASIA - Nasdaq.  AsiaInfo Holdings Inc has been under heavy accumulation for over a year now.  Strong rising OBV shows the buyers all over this stock.  We now have a Darvas box entry upon breakout of the 13.88 high formed on 5th of May 2008.  A highly promising candidate here for the long term investor.

PHTN -Nasdaq. Photon Dynamics certainly looks like its turned a corner. Rising OBV since the start of the year shows the buyers have resumed control. Good recent volume expansions have led to the formation of a Darvas box with a 12.54 high formed on the 7th May. A break of this high would constitute an entry into PHTN. Keep an eye on this stock.

HMA - NYSE. Found this Pennant Up just the other day. Rising volume and OBV since early this year shows the buyers are getting more and more interested in this stock. The pattern has a height of 1.67 (7.72-6.05). Adding this to the likely point of breakout at today’s high of 7.31 projects a target price of 8.98. Also there’s a gap to fill at 10.61 so a lot in favor here for a good trade.