Top two 'bounce plays' -- INTC and NYX by Microsoft Windows NT

Filed under: Intel (INTC), NYSE Euronext (NYX), Technical Test, Feasts to Buy

I tend to weigh fundamental analysis much higher than technical analysis when it comes to investing predictions. However, I do think technical analysis has value when it comes to looking for shorter-term trading ideas.

My favorite way to approach trades with a technical bias is to look for very low-risk plays, meaning the downside is very limited due to a logical stock, while the upside, on the other hand, could be rather significant. I usually tend to like "bounce" ideas because the downside is often very limited. However, I do sometimes follow and trade breakout stocks.

First up is Intel (NASDAQ: INTC):


As you can see from the chart, the last time the stock made it to the 50-day moving average, it served as a bottoming line. In addition, the stock is beginning to show strength today with the stock beginning to rally. At these levels, I'd be buying the stock and keep my stop around $23 per share (80 cents of downside) and I think the upside could be as high as the previous top in the stock at $26.50 per share.

Next up is NYSE Euronext (NYSE: NYX):


As you can see from the chart, about a month back the stock established a solid base and managed to rally back more than 10%. I think that scenario is very plausible here. The stochastics are starting to turn around and the share price has began rallying. Again, the risk here is limited -- I'd sell the stock if it closed below $72.90 per share. Upside is potentially the $84+ range.

Both of these ideas seem very interesting because the potential downside is very readily defined and understood while the upside isn't nearly as limited. When playing trades like this I tend to use trailing stops in order to protect my profits while allowing the position to run.

 

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