Friday, January 24, 2014

SolarWinds Inc (NYSE: SWI)

SolarWinds, Inc. designs, develops, markets, sells, and supports enterprise-class information technology (IT) and infrastructure management software to IT professionals in various organizations worldwide. The company offers enterprise-class network management products, including SolarWinds Network Performance Monitor that monitors and analyzes network performance metrics for routers, switches, servers, and other simple network management protocol enabled devices; additional network management products for various network management issues; and SolarWinds Log and Event Manager, a server-based product that automates the collection and interpretation of logs from various sources.
Please take a look at the 1-year chart of SWI (SolarWinds, Inc.) below with my added notations:
1-year chart of SWI (SolarWinds, Inc.)
SWI appears to have been forming a base over the last several months. A couple of times over that period the stock hit a key resistance level at around $40 (blue). Earlier this week SWI finally broke up out of its base and above that important $40 level. The stock should be moving overall higher from here, and so far seems to have resisted the general $42.50 area as expected.

The Tale of the Tape: SWI had a key level of resistance at $40 that should now act as support on any pullbacks. A long trade could be entered on a pullback to $40 with a stop placed below that level. A break back below $40 could negate the forecast for a move higher.
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Should this Trendline in the Dow Matter?

A funny thing happened at the end of last year. As the Dow Jones Industrial Average rallied through the holidays, some really long-term trendlines started coming into play. The strength we’ve seen in US Stocks is undeniable. So that’s where the question stems from: Should we care about this trendline in the Dow? Or ignore it?
Today we’re looking at a monthly bar chart of the Dow Jones Industrial Average. By connecting the peaks from the January 2000 highs and October 2007 highs, you can extend that trendline to where we peaked on December 31st:
1-21-13 DJIA
So should we care? Is that reason enough to sell? Or even to sell short? Do we wait for the 2009 uptrend line to break in order to get more pessimistic?
I don’t have a clear answer to this. So I look at other averages like the Nasdaq100 and Russell2000 and they’re making new all-time highs. So what’s up with the Dow? For the most part, these guys all trade together, and any short-term divergences usually even themselves out over time. So who’s right? Nasdaq and Russell or papa Dow?
Do you guys use trendlines to connect peaks in uptrends, not just the troughs?1-21-13 trendline connecting peaksPersonally, I do use trendlines to connect peaks in uptrends. And I take them more seriously than connecting troughs in downtrends. That can be a death sentence depending on the name (i.e $BSC $LEH etc). If something is crashing that bad, you are taking serious overnight gap risk, and that’s too much for me. Peaks in uptrends are a different story.
So me? Yes I think this trendline matters.
Do you?
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3 Stocks Insiders Are Buying Now

Wise investors covet “insider stocks” because they realize something very important.

It’s something mutual fund legend Peter Lynch once described very succinctly: “There are many reasons why insiders sell, but only one reason insiders buy.”

That reason being, of course, that insiders know something about their company that they are certain will drive the stock price higher.

And research bears this out.

According to Nejat Seyhun, a professor and researcher in the field of insider trading at the University of Michigan, whenever you have insider buying, the stock tends to outperform the total market by 8.9% over the next 12 months.  (more)

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Market Divergence is Bizarre: Gartman

CNBC’s Bob Pisani and Dennis Gartman, The Gartman Letter Founder, editor & publisher, discuss the recent divergence between the major indices and the weakness in China.
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McAlvany Weekly Commentary

3 Canaries in a Coal Mine: Watch Them Closely!

About this week’s show:
-Real estate: Buy, sell or hold?
-Climbing interest rates could kill real estate recovery
-Loonie, Aussie and Dr. Copper are critical tell-tails
Read | Subscribe@iTunes
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Krispy Kreme Doughnuts (NYSE: KKD)

Krispy Kreme Doughnuts, Inc., together with its subsidiaries, operates as a branded retailer and wholesaler of doughnuts, beverages, and treats and packaged sweets worldwide. It owns and franchises Krispy Kreme stores. As of December 12, 2013, the company operated approximately 810 stores worldwide. It also produces doughnut mixes and doughnut-making equipment. The company was founded in 1937 and is headquartered in Winston-Salem, North Carolina.
Please take a look at the 1-year chart of KKD (Krispy Kreme Doughnuts, Inc.) below with my added notations:
1-year chart of KKD (Krispy Kreme Doughnuts, Inc.)
Other than a slight setback at the end of August, KKD had been flying high for most of last year. However, the stock had an even larger setback at the beginning of December.
A level that seems to stand out on the stock during the last eight months is $18 (blue). You can see how $18 has been both support and resistance since the end of May. In addition, the stock has also hit $20 as resistance on multiple occasions (red).

The Tale of the Tape: KKD is stuck between key levels of $18 and $20. Traders could enter a long trade at $18, or on a break above $20. A short trade could be made on a break below $18 or on a rally up to $20.
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