Little Higher..

7:15am EST Like I mentioned yesterday, even though the futures were strongly lower to start the day, the Dow closed higher and the other indexes ended the day close to break-even. You could have easily day-traded one of the index ETF's and made some good money. Today will be choppy and we probably won't have much action in either direction. While it is healthy for the market to trade sideways or lower for the next couple of weeks, it makes difficult to make lots of cash. Good choices of individual stocks will be the difference between strong returns and mediocre-to-losing returns.

Yesterday's (GIS) trade was very strong. The stock broke out of its recent range and closed above its most recent high. That is very bullish for the stock. I only put on a part of the position yesterday and will be looking to add on a pullback. I will be looking to take profits in the 57.50 range. This will be where the stock eventually hits the 200 day moving average and the stock will probably sell off from there. This is a 1:1 risk reward trade.

I am still in the Morgan Stanley (MS) trade. I am at about a 10% profit right here and looking to start taking a little off. I am trading around a base position. When it starts to move higher, I take a part of my position off. When it goes down a little, I add a little more to my position. This is a longer term holding.

The trade for today is Brown Forman (BF-B) The liquor-maker reports earnings tomorrow before the opening bell. Watch the price action going into the close. It should give you an indication of what will be happening with earnings. Earnings estimates have been lowered recently and there are no analysts with a buy rating on the stock. A decent upside surprise will send the stock higher on good volume. If the stock goes much higher from here, it will land above the 200 day moving average. The stock has bumped up against the 200 day 4 times since May 7th. This should be the catalyst that sends the stock strongly higher. The strategy here is to buy a portion of your position today assuming you have good price action in the stock this afternoon. When the announcement comes out tomorrow morning, you buy the other portion. This way, you avoid the risk of a full position but have the benefit of owning the stock at a lower price prior to a pop higher. If the company disappoints, you would want to take the small loss and be out of the stock. It's a pretty simple trade. Until next time, stay low risk..