BCE, Inc.

BCE Inc. provides a suite of communication services to residential and business customers primarily in Canada. Its services include Bell Home Phone local and long distance services, Bell Mobility and Solo Mobile wireless, high-speed Bell Internet, Bell TV direct-to-home satellite and VDSL television, and IP-broadband services, as well as information and communications technology services, such as voice, data, Internet, video, and value-added solutions. The company’s solutions for small and medium-sized business customers comprise Internet access; Web hosting; business applications that automate business processes, enhance online presence, secure networks, and support employees; wireless voice and data solutions.

We have a very strong upward wedge taking place here. A rising wedge is characterized by higher lows and higher highs, and should mark the top of the current uptrend. Even though prices continue to rise higher throughout the formation of the pattern, it is still considered a bearish pattern.

When you are getting ready to enter the trade, wait until a candlestick closes outside of the lower rising trendline before entering your trade. Make sure that the volume is strong on the breakdown or the pattern could fail.

Once your trade is entered and your stop loss is set, you have to decide when and how much profit to take out of the trade. Like most other patterns, the target price of the breakdown can be calculated. Subtract the height of the pattern from the breakdown level, and that will give you the target price of the breakdown. Here it is about 5.2

Vanguard Index Funds Mid-Cap Gr VOL

The investment seeks to track the performance of MSCI US Mid Cap GrowthIndex.The fund invests all, or substantially all, of assets in the stocksthat make up the index, holding each stock in approximately the sameproportion as its weighting in the index. The index is made up of abroadly diversified index of growth stocks of medium-size U.S.companies.

The head and shoulders pattern is generally regarded as a reversalpatternand it is most often seen in up trends. It is also most reliable whenfoundin an uptrend as well. Eventually, the market begins to slow down andtheforces of supply and demand are generally considered in balance. Sellerscome in at the highs (left shoulder) and the downside is probed(beginningneckline.)  Buyers soon return to the market and ultimately pushthroughto new highs (head.) However, the new highs are quickly turned back andthedownside is tested again (continuing neckline.) Tentative buyingre-emerges and the market rallies once more, but fails to take out theprevioushigh. (This last top is considered the right shoulder.)

We are not quite ready to get in on this stock yet but is is really worth watching closely. When we hit at neckline, about 46.8, then we want to watch for higher volume and when it breaks that line, look for a bearish option play. We have roughly 8 points to work with, so look for a straight Put Play or a Debit spread.

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HMS Holdings Corp. (HMSY)

Sector: Services
Industry: Business Services

HMS Holdings Corp. provides cost management services for government-sponsored health and human services programs. The company offers coordination of benefits, cost avoidance, and program integrity services, which enable customers to recover amounts due from third parties, avoid and reduce costs, and ensure regulatory compliance. Its coordination of benefits services route claims paid by a government program to the liable third party, which reimburses the government payor; cost avoidance services provide validated insurance coverage information that is used by government payors to reject claims that are the responsibility of a third party; and program integrity services are designed to review claims paid by government programs, identify payment errors, and recover the erroneous payments.

We are looking at a rising wedge here. The rising wedge is a bearish pattern that begins wide at the bottom and contracts as prices move higher and the trading range narrows.

While it is a consolidation formation, the loss of upside momentum on each successive high gives the pattern its bearish bias. However, the series of higher highs and higher lows keeps the trend inherently bullish. The final break of support indicates that the forces of supply have finally won out and lower prices are likely.

We have huge signs here that it is about to break downward so we would get ready to make money with bearish option strategies. We have a large negative divergence with the MACD. This is another indicator of the bearish pattern that will develop.

Look for the support break line at 50 unless it continues to form for the next couple weeks. If this occurs, we are looking at a possible 52.50 break line.

There is no real way to know how far down the stock can fall with these patterns. Other studies of the technical aspect is needed.





Possible Option Plays:

• Straight Put Option Purchase
• Bear Put Spread (Debit)
• Bear Call Spread (Credit)
• Selling Naked Calls

Deere & Company Common Stock (DE)

Deere & Company provides products and services primarily for agriculture and fores try world wide. The company operates in three segments: Agriculture and Turf,Construction and Forestry, and Credit.The Agriculture and Turf segment manufactures and distributes a line off arm and turf equipment,and related service parts, which include large,medium, and utility tractors;loaders; combines, cotton, and sugarcane harvesters and related front-end equipment; sugarcane loaders; and tillage, seeding, and application equipment.

We really like the bearish channel that DR has started to trade in. It has formed a very nice channel for us to be able to trade in and make money.

Since this is very bearish at the moment, we want to establish a bearish strategy to make money on this stock. We are going to start by watching the downward trend.

The pattern is pretty pronounced. If we are going to do a BEAR CALL SPREAD, now might want to wait until we hit the top of the the trading channel again and watch as it moves down. We want the calls we sell to lose value on a play like that so the best time to buy is at the top of the trading zone and as it goes back time, we will have time and the devaluation of the stock on our side.

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Nordic American Tanker Shipping Ltd. (NAT)
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Nordic American Tanker Shipping Ltd., an international tanker company, owns and operates crude oil tankers. It operates its vessels in the spot market, on time charters, or on bareboat charters. As of December 31, 2008 the company owned 15 double hull Suezmax tankers. Nordic American Tanker Shipping Ltd. was founded in 1995 and is headquartered in Hamilton, Bermuda.


NAT has a nice descending triangle going on right now. The descending triangle is a bearish formation that usually forms during a downtrend as a continuation pattern. There are instances when descending triangles form as reversal patterns at the end of an uptrend, but they are typically continuation patterns. Regardless of where they form, descending triangles are bearish patterns that indicate distribution.

If one is looking for a play on this, we wish to keep it bearish along with the nature of the formation. Watch for the chart to bounce off the established resistance level. When it is confirmed, we would look for a Put Option play.

Comstock Resources Inc.

Comstock Resources, Inc. engages in the acquisition, development,production, and exploration of oil and natural gas properties in the United States. It has onshore operations primarily in the East Texas/North Louisiana and South Texas regions, as well as Mississippi,New Mexico, Kentucky, and the Mid-Continent regions. As of December 31,2009, the company owned interests in 1,641 producing oil and natural gas wells, and had proved reserves of 725.7 billion cubic feet of natural gas equivalent. Comstock Resources was founded in 1919 and is based in Frisco, Texas.

The falling wedge is a bullish pattern that begins wide at the top and contracts as prices move lower. This price action forms a cone that slopes down as the reaction highs and reaction lows converge. In contrast to symmetrical triangles, which have no definitive slope and no bias, falling wedges definitely slope down and have a bullish bias. However, this bullish bias cannot be realized until a resistance breakout. We have broken out of the wedge pattern already and we are now looking for the stock to move upward. We have increased volume on the break out and now if we were to make an option play here, we would look at a September 35 Call option.

Sanderson Farms, Inc. (SAFM)

Sanderson Farms, Inc., an integrated poultry processing company, engages in the production, processing, marketing, and distribution of fresh, frozen, processed, and prepared chicken products in the United States. It sells ice pack, chill pack, bulk pack, and frozen chicken in whole, cut-up, and boneless form under the Sanderson Farms brand name. Sanderson Farms sells its products to retailers, distributors, and casual dining operators in the southeastern, southwestern, northeastern, and western United States, as well as to brokers. The company was founded in 1947 and is headquartered in Laurel, Mississippi.

We really have taken notice of the well defined downward movement that we have here with SAFM.

In particular the defined resistant points.

Notice that after it peaked, it started to use the 20 day ma as a resistance point and then as it went down farther, the 50 day ma became the point of resistance.

This really shows us strength in a downward trend. Now we continue. We like this for a bearish play. Since this stock is option-able, we would suggest any bearish option play wait until we have a chance to test and bounce off that 50 day ma again. Obviously on a bearish play, we want the options losing value to we want to buy/sell calls.

iShares MSCI Chile Investable Mkt Idx (ECH)

The investment seeks to track the performance of MSCI Chile InvestableMarket index.The fund invests at least 90% of assets in the securities of theunderlying index or in depositary receipts representing securities inthe underlying index. The underlying index is a free float-adjustedmarket capitalization index that is designed to measure broad basedequity market performance in Chile. The fund is nondiversified.

We have a really nice channel forming here with our ETF of Chile. Since we are just over 2 1/2 weeks out before our June options expiration, we have a really nice looking play here.

A perfect setup for a Bear Call Spread play. And it is a perfect time to get into this play also.

We are expecting this to continue downward after the bounce off the top of the Bollinger Bands . Look at selling a '60' June call at $.70 and buying the '65' at $.60.

This looks like the perfect time to make the play. Or, you may consider buying a straight '50' put at $1.25. We are expecting this to continue in a downward move. And when it bounces off the bottom of the Bollinger Bands, we do not expect it to rise above the last point it was at.

AMERIGROUP Corporation

AMERIGROUP Corporation operates as a multi-state managed health care company. It focuses on serving people, who receive health care benefits through publicly sponsored programs, such as Medicaid, Children Health Insurance Program (CHIP), Medicaid expansion programs, and Medicare Advantage. The company's Medicaid program makes federal matching funds available to various states for the delivery of health care benefits to eligible individuals, as well as allows each state to establish its own eligibility standards, benefits package, payment rates, and program  administration under broad federal guidelines.

The double top is a major reversal pattern that forms after an extended uptrend. As its name implies, the pattern is made up of two consecutive peaks that are roughly equal, with a moderate trough in-between. 

While the double top formation may seem straightforward, technicians should take proper steps to avoid deceptive double tops. The peaks should be separated by about a month. If the peaks are too close, they could just represent normal resistance rather than a lasting change in the supply/demand picture. Ensure that the low between the peaks declines at least 10%. Declines less than 10% may not be indicative of a significant increase in selling pressure. After the decline, analyze the trough for clues on the strength of demand. If the trough drags on a bit and has trouble moving back up, demand could be drying up. When the security does advance, look for a contraction in volume as a further indication of weakening demand.

Kongzhong Corp.

KongZhong Corporation, through its subsidiaries, provides wireless interactive entertainment, media, and community services to mobile phone users in the People's Republic of China. It offers interactive entertainment services, which include mobile games, pictures, logos,karaoke, electronic books, and mobile phone personalization features,such as ring tones, wallpaper, clocks, and calendars; media services that include content, such as domestic and international news,entertainment, sports, fashion, lifestyle, and other special interest areas; and community services, which comprise interactive chat, message boards, dating, networking, and photo albums.

With this nice downward pattern, we can look at a short term play here. A nice Bear Call Spread would work perfectly.

We have the opportunity to use someone's money to make this play and the pattern is very strong. Research the stock and option costs. It might be a nice 10 day option play for May still.