In This Edition...

• What Pumped Up CGYV's Volume Eightfold on Wednesday? 
• A Couple of Reversal-Rooted Trading Ideas 

CGYV's Newest Fans Pump Up Volume, Breakout Effort

Wow. I'm guessing you already saw Wednesday's final volume tally for China Energy Recovery (OTCBB: CGYV), but of you didn't, let me sum it up for you.... Wow. It was about eight times the norm, and the second-highest volume day ever for the stock - almost entirely on the buy side. 

Nice, but the net result for current owners is even better; we're painfully close to a possible breakout move. I really hope you're in a position already. If you're not though - and if you want to be - I can see one scenario that might act as a second chance. 

While I like these occasional home run days, the truth is that it's been difficult lately to string several of them together. This market environment simply requires the ability and willingness to take two steps forward and one step back. Following CGYV's two steps forward (at least on Wednesday), I think we have to mentally prepare for a step back... not unlike what we saw Thursday. No big deal - that's just the way it works. 

How far back does China Energy need to be reeled in? That's tough to say, so we'll have to answer that question when the time comes. Regardless, if the recent rally convinced you about the stock's potential like it convinced a whole lot of other people, then any dip is an entry window. 

So, you can probably still get in at a reasonable level - you just need to be ready... I'm not sure how long the window will remain open. Keep tabs on the blog for more info. 

And what happened to prompt the surge? Glad you asked. 
 

The Catalyst

In a nutshell, someone else found in China Energy Recovery the same value we found back in September. And, they published a pretty optimistic research report on the company, setting a price target of $4.00. As a result, a whole lot of other "someone elses" found China Energy Recovery on Wednesday. 

Personally I think CGYV - over the long-term - could actually be worth more than $4.00, but we'll save that discussion for later. The point here is that more eyes are starting to follow this great story, and dollars are following. In other words, things are working out the way they're supposed to... the company is doing well, and the stock is doing well as a result. (Remember when things made sense like that?)

While I'm thrilled CGYV is getting its due attention from the investment community, just remember we saw it first.

I'll try and get a copy of the research report up on the blog sometime before the end of this week. 
 

This Freakin' Market... At Least We've Got Some Trading Ideas

Let me get this straight - we spend the majority of the day down a couple of percentage points on Thursday, and then close pretty well into the black? Oh wait... that's nothing new. That's par for the course.

After basically six straight days of market losses (2 of the 6 gave us slight gains, but didn't stave off the overall slaughter), it looks like the bulls have finally had enough. We were already oversold and ripe for a bounce anyway. But, yesterday's lower lows and then higher highs that accompanied the turn-around is called an 'outside day'. This is often a sign of longer-term reversal. Of course, long-term by current market standards may only be a few days. 

All the same, from a risk/reward perspective we like our odds of going long on several ideas. We'll only throw out two of them today, and keep the others in our back pocket for later.

The first one is Edwards Lifesciences (NYSE: EW), a mid cap medical equipment maker. The company's been bullish about their 2009, and somewhat deservedly. The nature of their business has shielded them from the worst of the recession, and they've remained profitable. What their fundamentals lack in excitement they make up for in reliability... or so we'll see when they report earnings on February 3rd.

Chart-wise, I just like the way this stock behaves. It pushes forward, takes a break, finds support, and then pushes forward again. 

Following some consolidation over the last few days, the stock finally found support at its 20 day average line on Wednesday. Sure enough, Thursday was a nice rally. 

It's a tad volatile, but that's not a bad thing if you enter at the right time, pointed the right direction. I think it's worth a swing anyway.

The second idea isn't a small cap, but it's a chart I really like. 

Agilent Technologies (NYSE: A) basically shrugged off the market's recent weakness, but hasn't had much of a problem moving higher when the market does. In fact, it's one of the few stocks that moved above is 50 day line last week, and has since found support there... a good technical indication.

Agilent's best quality right now, however, is the steadily-growing stream of buyers coming to the table. Check out the volume trend.

One thing we like about these two tickers is how each trade's success isn't entirely predicated on the market's success. A complete meltdown (like September/October) might be tough for these stocks to overcome, but a neutral to bullish market may well be all we need to let these stocks really get rolling on their own merits.

We're not setting a target or stop on either of these two suggestions; you guys are smart enough to handle that on your own. We just wanted to mention them to you because we think they're some decent money-making opportunities right now. Keep 'em on a short leash though... this market is still throwing curve balls.

However, we will let you know we're not necessarily looking for home-runs from either of these charts. We'll just take what the market gives us, and move on when the party's over. 

On the other hand, we will follow up in the blog and future newsletters on both stocks no matter what the outcome is. 

I plan on doing a lot more of these picks in the future, so stay tuned.