Wednesday, January 11, 2012

Thursday Game Plan

Markets displayed dull action Wednesday, as the indexes closed just around flat. Volume was below normal. They did show some bullish behavior as benchmarks came back late in the day to finish near highs. Economically sensitive issues are shining recently, with the transports leading the way. The IYT is regaining some daily volume as it builds the right side of its base on a possible move towards par. UNP NSC are both near all time highs, while FDX is up 7% in the last 4 sessions. These three stocks make up more than 30% of the ETF. CAT looks solid as it kisses 100, ETN is up 6% in the last two days as it smashed right through its 200 day MA yesterday. Steel price hikes of 25% have stuck, as these firms have pricing power. RS NUE X are all behaving favorably. Another sector that has been in the news of late has been the defense sector. As the administration slashes defense budgets, the stocks themselves ignore the gloom. RTN is sporting a nice cup with handle, and GD is building a handsome right side of its base after recently bursting through its 40 week MA. Bad news, good action must always be respected. Stocks that can be bought as they retreat to former trigger points include SCSS, which came within pennies of its 22.29 cup base. Watch BEAV to see if it can retrace back near its 40.14 cup with handle it broke away from Tuesday in decent trade. Stocks to keep an eye on as they build their right sides are TRN KMX. Stocks potentially forming handles on their cup bases are WFM TYC. Keep them on a watch list. WSM still has a nice looking inverse head and shoulders pattern. It can be bought as it trades through 40. CELG AMGN have been demonstrating excellent relative strength lately.

Stocks near specific buy points include cup with handles are PX 109.31, JBHT 46.69, UPS 75.02, PLL 58.94, TMK 44.93, CBI 42.02, RTN 49.61, RHI 29.47, PXP 39.47, ASML 43.11, VRSN 36.55. Double bottoms are BBT 27.46, WFC 29.73, BBBY 63.48, PII 63.16. Cup bases are ADP 55.12, BIIB 120.76, CBS 29.78. XOM 87.77 in a double bottom with handle, EAT 27.45 in a cup with high handle, and MCD 101.69 in a 3 week tight pattern.

Stocks that can be bought as they reclaim their 40 week MAs and their buy stop spots are DOW 31.90, JPM 37.60, NTRS 42.55, MUR 60, TXN 30.95, TPX 60.35. EMN retook its 40 week MA today.

Stocks that can be bought at 40 week support are CBE 55.50, FLS 102, JEC 41, BLL 36, EMN 43.95, COG 67.50, COP 71.10, KEG 15, OXY 94.25, AMP 51, MCHP 35.50, XLNX 32.20, CL 87.40, DHR 48.90. Stocks that found 40 week support today were DOV PH CE KO.

Stocks that can be shorted at 40 week resistance are FE 43.10, COST 80.80, TGT 50.55, TIBX 26. ARMH lost its 40 week MA today.

Stocks that can be bought at 10 week support are GOOG 15, RAI 40, ATI 47.50, APC 78, BP 42.95, CPX 33.95, SGY 26.15, V 96.15, ABT 54.55, GNC 27.40, SNPS 27.10. Stocks that found 10 week support today were DEO MELI PII POT.

UA can be bought with a buy stop above 78.25 as it retakes its 10 week MA. Stocks that retook their 10 week MAs today were BDU ALGN BBBY.

Stocks that can be shorted as they lose their 10 week MAs and their sell stop spots are DGX 56.75, ED 58.75, DG 39.80, DLTR 80.10. COH RL VFC EL all lost 10 week support today.

Stocks that can be shorted at 10 week resistance are SWI 30, IBM 186, COH 61.90, VFC 133.85, LTD 40, SBH 20.15, CL 89.75, NUS 48. Stocks that met 10 week resistance today were JOY RAX LTD HLF.

Good luck.

The author owns HXL DOV. Bought HXL at 25.52 as it retreated to its 10 week MA. Bought DOV at 58.98 as it found 40 week support today.

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