Thursday, January 26, 2012

Friday Game Plan

Markets demonstrated poor action as they opened on highs and continued to drip lower, closing upon the lows. Volume expanded a bit. The Nasdaq and S&P 500 near .5%. A healthy pause is warranted and even healthy. We did manage another breakout today from JBHT which took out a 49.22 cup base buy point in sturdy trade. It hit an all time high in the process. There are many more set ups forming each day. During earnings season I focus on the leaders and how and where they meet support or resistance. Today, HXL found support at its 10 week MA and rallied 7% from there. ARG fell 4%, post earnings but found precise 10 week support. This chemical has been best of breed. See how it reacts tomorrow, it could offer a buying opportunity. UA whose base has become increasingly sloppy and loose, did manage to find support right at its 40 week line after their report. Also we watch how stocks react once they retest their prior trigger points. Today PII did just that and rebounded very slightly from its 63.16 double bottom trigger. FFIV was down after hours right back to its 117.40 cup with handle base buy point. Others of interest to us, as this market is due for a normal pullback are COH 66.64, ADP 55.12, WFM 74.55, TSCO 78.32. Keep an eye on ENDP, as it needs one more day to complete its handle on its cup base. Potential trigger is 38.02. Some nice moves on earnings today were CAT DOV BLL. After hours SBUX was down slightly, while KLAC was up smartly.

Stocks near specific buy points include cup with handles FDX 93.62, TRN 33.02, RAX 45.55, IP 32.68, RS 57.40, CE 50.10, OMC 48.06, PXP 39.47, LOW 27.67, MHK 66.17. Cup bases are BIIB 120.76, CBS 29.78. Double bottom with handle is SPR 23.61 and FTI 54.98 in a flat base pattern.

Stocks that can be bought at 40 week support are GOOG 562, JPM 37, SGY 27, COST 81, JWN 47.05, ITUB 19.50, MWV 29.75. TD ARMH both found 200 day support today.

Stocks that can be shorted as they lose 40 week support and their sell stop spots are PH 79.75, KO 67.45. NTRX CPX both lost 200 day support today.

Stocks that can be shorted at 40 week resistance are NTRS 41.90, COG 34, COP 70.85, FE 43.40. TAP COG DO WLL TIBX all met 40 week resistance today.

Stocks that can be bought at 10 week support are TMK 43, VRSK 38.95, APC 78, EOG 100, EXXI 31, V 98, KLAC 47.50 (earnings beat after close), SO 44.50, DLTR 82, M 32.50, SBH 20.25, CL 90. JWN found 10 week support today. AMZN retook its 10 week MA today.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are CFX 29.75, ABT 54.55, ANN 23.75, LTD 39.80, MCD 97.50. PRGO HUM GNC all surrendered 10 week support today. VFC can be shorted at 10 week resistance at 132.60. COST met 10 week resistance today.

Good luck.

The author owns XOM JPM WFM. Short DPZ RAI. We sold WFC as it fell well below its 29.73 double bottom trigger and is on pace to complete a very bearish outside week. We bought some WFM at 75.44, as it trended back to its 74.55 cup base trigger.

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