I continue to like stocks in the oil and gas area. Anadarko Petroleum (APC - commentary - Cramer's Take) has a particularly good-looking chart. It built a two-month long base and now has slightly moved out of the top of that consolidation. Volume is tending to come in on the upside. The two volume-adjusted moving-average lines that overlie the price plot have just crossed in the positive direction. The wide base could justify a substantial advance. I see it as a buy around current levels.
99 Cents Only Stores (NDN - commentary - Cramer's Take) is one of the few stocks that looks as though it could be sold short at this time. In spite of the sliding market, it was in a strong uptrend until mid-November but now appears to have turned lower. It broke the ascending trendline with heavy volume and a very wide trading range. The subsequent rally has created a small upsloping flag. A stop sell order below that line would be a way of only shorting the stock if the decline resumes.
P.S. Will you be there when Cramer makes his next move?
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At time of publication, Arms had no positions in the stocks mentioned.Richard Arms is a renowned stock market technician who invented the Arms Index (often referred to as the TRIN), which has become a mainstay of market analysis, appearing in The Wall Street Journal and Barron's. Arms also developed the widely used technical method Equivolume Charting. Since 1996, he has been publishing the Arms Advisory newsletter for money managers and financial institutions. He also has authored Stop and Make Money: How to Profit in the Stock Market Using Volume and Stop Orders, Profits in Volume, Volume Cycles in the Stock Market, Trading Without Fear and The Arms Index, and has been honored with the Market Technicians' Award for Lifetime Contribution to Technical Analysis. Under no circumstances does the information in this commentary represent a recommendation to buy or sell stocks. Richard appreciates your feedback; click here to send him an email. TheStreet.com has a revenue-sharing relationship with Trader's Library under which it receives a portion of the revenue from purchases by customers directed there from TheStreet.com.
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