Monday, November 21, 2011

Monday Thoughts

Markets folded to start the week Monday on continuing Euro concerns, and the failure of the "Super Committee". Volume subsided which is normal during a holiday week. The Nasdaq and S&P 500 both closed lower by about 1.9%. The S&P 500 gave up its 10 week MA Monday. As always a look at leading stocks can provide valuable clues to market health. Today many slumped including TIBX UA. Others managed to hold up decently amid the markets nasty behavior today. We bought some $COG at 79.20 today as the leader revisited in 78.75 double bottom it broke out from 10/28. VRSK retreated back near its 35.31 5 week tight pattern and then staged a positive reversal. Others doing the same include HUM trending back to its 80.74 double bottom buy point on 10/31 in quiet trade. EL is trending back to its own 106.52 double bottom buy point it gapped out from on 11/3. The XRT bounced of the big round number of 50 exactly today and managed to close above its 10 week by the end of the day. Many retailers closed well off their lows of the day, showing strength, and included COH DLTR BBBY. M had a very positive inside day and closed up today. The XLE found exact 10 week support Monday. XOM SM COP APA DVN RRC APC all also found good 10 week support today. However, this environment is not painting a bullish picture. Positions should be kept small and nimble. Former leaders like WYNN PCLN AMZN were all down between 4-8%. FIO, a recent IPO was down 8.5%. However keep a close eye on stocks demonstrating relative strength on weak tapes. They include XRAY ORLY SWI (had a bullish inside day Monday) and VRSK M. DG has a 40.81 square box buy point and HRL has a 30.11 3 weeks tight pattern buy point. Careful this one reports earnings Tuesday. And a final note was merger activity returning with GILD taking out VRUS. Earnings tomorrow come from DSW HRL NUAN.

Stocks that can be bought as they approach 10 week support are DPZ 29.80, MCD 90.30, WMT 55.10, INTC 23.25, KLAC 43, TRN 26, ADSK 31.05, INFA 44.25, JKHY 31, RHT 45.90, SAP 55.95, IP 26.50, MA 341, PPG 80, NOV 64, ECL 52.55, CBS 23.60, NUE 35.85. Stocks that found 10 week support today were HXL PAG SBUX TJX SO DEO UPS IBM JNPR SGI NUAN (earnings Tuesday), HRL (earnings Tuesday), CLF CE DE APC APA COP DVN XOM RRC SM NUS DHR X. NEM can be bought with a 65.90 buy stop as it retakes 10 week resistance. NVDA retook its 10 week MA today.

Stocks that can be bought at 40 week support are TIF 70, FE 42.10, ABV 31.15, CNI 74.05, UNP 96.50, AAPL 362, TIBX 26, CPO 50.15, GIS 37.75, CELG 59. Stocks that found 40 week support today were COH BEAV WFM QCOM NVLS BUD VMW ATHN INTU CPO RAX CBI URI MON CXO NBL.

Stocks that can be shorted at 10 week resistance are VFC 131, COST 83, ULTA 69, ORCL 31, HANS 89.80, ALXN 65.70, JAZZ 40.15, ADS 97. CBOE MON met 10 week resistance today. Stocks that can be shorted as they lose their 10 week MA and their sell stop spots are IBM 179.50, NUS 45.10. Stocks that lost 10 week support today were SWN VFC UA TIF EMC HANS TROW BBT CMI HAL.

Stocks that can be shorted at 40 week resistance are ARMH 28, CHKP 54.10, AMGN 55.55, CPHD 32.75, DFS 24, ABX 49.10, EOG 100, PXD 33.75. WSM ACN MAKO PLL APC all met 40 week resistance today, however ACN MAKO both ended the day in the green today. Stocks that can be shorted as they lose 40 week support and their sell stop spots are HSY 55.75, WPI 63.50. CTXS SAP KO AMGN EFX all lost 40 week support today.

Good luck.

The author owns DE COG. We bought COG as it approached its 78.75 double bottom buy point it gapped out of 10/28. We exited our retail pair we had on, losing a little more than $1 on WMT, but gaining $7.25 on our LULU short.

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