Monday, January 9, 2012

Tuesday Game Plan

Markets were for the most past flat today to start the week. The Nasdaq finished above its 40 week for the third straight day, and for the second consecutive day found support there. The S&P 500 traded in a tight range quietly. You know the adage, never sell a dull market. Today we had something we have been waiting for now; breakouts. A couple emerged today with NUAN taking out a 27.07 cup base and BEAV doing the same with a 40.14 cup with handle base. We need to see more in the coming days. Previous breakouts in action today were V which retreated back to its 98.70 3 week tight trigger almost exactly then rallied. PM is now hovering just below its own 77.13 3 week tight pattern buy point. Some sectors in action today were the transports. KSU UNP both hit all time highs today. The IYT is demonstrating good action as it becomes more comfortable each day it closes above its 40 week MA. The thin trade is becoming concerning though. The XRT retook its 10 week MA today, as some names in the group are materializing as leaders. They include NKE M COH WFM. The XRT itself is in the process of a base on base pattern with a cup base buy point of 55.02. The 40 week on the XLE continues to act like a "third rail". A buy stop above that line could be put in at 71.35. Favorites in the group are NBL which has a 99.27 cup with handle trigger. CPX is building the right side of its base as is HP. Both should be closely monitored as they bases form. Disturbing action was seen by both AAPL which reversed after hitting an all time high and taking out a 426.80 cup base buy point in the process. GOOG was down 4%, as it approaches its 10 week line, and IBM to me looks shaky, and probably headed to its 40 week. Are we on the cusp of a new bull market? Only the benchmarks themselves can answer that question. We need to see some new leading names step up and break out of valid bases. We know one thing for sure. In new bull markets, old leaders do not assume their old prestige. Case in point for the ones in the recent bear which fell apart. They include DECK WYNN CRM AMZN. Who will be the new leaders to take responsibility for the next potential bull in the making?

Stocks near specific buy points include 3 week tight patterns OKE 88.23, GPC 62.61, MCD 101.69, AMT 61.03. Cup with handles are JBHT 46.69, AME 43.83, HXL 25.52, NBL 99.27, DGX 59.49. Cup bases are VAL 40.70, ADP 55.12, ASNA 35.35, WFM 74.55, CBS 29.78. Double bottoms are CFX 32.10, SPR 22.53, WFC 29.73, COH 64.08. EAT 27.45 in a cup with high handle, and DLTR 84.61 in a flat base.

Stocks that can be bought as they reclaim their 40 week MAs and their buy stop spots are ETN 46.30, MMM 86, STLD 14.70, DOW 31.70, NTRS 42.70, WLL 53.80, DHR 49.15. CAT CBE both retook their 40 week MAs today.

Stocks that can be bought at 40 week support are FDX 84.50, GD 67, EOG 98, NOV 70, TROW 56.25, ARMH 27.95, AVT 30.45, NEM 60. Stocks that received 40 week support today were TRN FLS KMT GD TAP PPG AMP UA KMX.

Stocks that can be shorted as they lose 40 week support and their sell stop spots are PPG 83.50. JEC RRC COST all lost 40 week support today.

Stocks that can be shorted at 40 week resistance are TXN 30.90, FE 43.05, TGT 50.55, HLF 53.50, TPX 60. STLD met 40 week resistance today.

Stocks that can be bought at 10 week support are DOV 56, TMK 42.15, CBI 38.05, JEC 40.25, GOOG 614.50, ATI 47.35, X 26, VRSK 38.05, BP 42.95, SGY 26.10, ABT 54.40, BIIB 112, SO 44.05, LKQX 29.50, JWN 48.50, WMT 58.10. Stocks that received 10 week support today were TCK VFC ED SBH ULTA EL FCX.

Stocks that can be bought as they retake their 10 week MAs and their buy stop spots are BBBY 60.85. Stocks that retook their 10 week MAs today were CNI FFIV TXN QCOR WSM PII.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are ABV 34.20, CE 43.25, DG 39.80, SBH 20.05, CL 89.15, EL 110.20. COG ALGN both lost 10 week support today.

Stocks that can be shorted at 10 week resistance are PH 80, SWI 30, ANN 24.75, LTD 40, MELI 83, TSCO 72, NUS 48. RL SNPS both met 10 week resistance today.

Good luck.

The author owns IYT NUE KEG BLL NUAN. Short DPZ. We bought some NUAN as it took out its 27.07 cup base buy point on strong volume.

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