Monday, January 30, 2012

Tuesday Game Plan

Markets displayed some strong resilience Monday, as indexes started upon session lows and finished near their highs. Again the Nasdaq did perform better than the S&P 500, although both finished lower. The big round numbers of 2800 and 1300 seemed to provide some support for the benchmarks. Leading stocks were quiet, but many are in the process of retreating to or have already retested prior triggers. PII for a third consecutive day bounced right off its 63.16 double bottom buy point. FFIV bounced again off its 117.40 cup with handle trigger. Others that are retreating to their prior triggers and must be watched to see how they hold up are: DFT (24.87 cup with handle), NTGR (38.57 cup with handle). Banks had a tough day, although XLF did manage to find 40 week support today. JPM, intraday fell below its 40 week, but climbed above that line by the close. WFC had a bullish inside day. Stocks that had bullish outside days today included NKE MON QCOM. Gaps that are still holding up and consolidating, which indicates true strength are AAPL AAP COH CLR EMN LULU CA WDC. As long as these gaps remain intact, play from the long side. Other stocks that caught my attention today were ARG, a best of breed chemical, that has acted well ever since its 10 week MA proved sturdy following last Thursdays earnings report. JBHT which broke out to all time highs last week following a bullish forecast, looks to have the big round number of 50 as its line in the sand. JAZZ had a bearish reversal today after attempting to break out from 49.24 cup with high handle pattern.

Stocks near specific buy points are cup with handles FDX 93.62, TRN 33.02, GD 72.99, ETN 50.30, IP 32.68, CE 50.10, EXXI 34.77, PXP 39.47, AMP 55.71. Double bottom with handles are SPR 23.61, APC 82.57. 3 week tight patterns are VRSK 41.11, TSCO 82.08. CBS 29.78 in a cup base, RL 152.10 in a double bottom base, and ASNA 35.92 in a cup with high handle base.

Stocks that can bought at 40 week support are KBR 31.10, MUR 58.40, SGY 27, PRGO 92, CL 88, FCX 44.25, ITUB 19.50. JPM CVX ARMH NEM all found 40 week support today. WLL can be bought with a buy stop of 52.25, as it reclaims its 40 week MA.

Stocks that can be shorted as they lose their 40 week MAs and their sell stop spots are CNI 74.50, PH 79.55, COST 80.80.

Stocks that can be shorted at 40 week resistance are NTRS 42, COG 34.05, FE 43.50, KO 67.70. TCK TGT met 40 week resistance today.

Stocks that can be bought at 10 week support are HXL 24.50, RTN 47.95, TROW 56.65, SOA 44.50, EAT 25.25, DLTR 82, VMW 89. KSU BP FTI UA SO ANN BBBY MCD JWN MWV. CPX can be bought with a buy stop of 33.75, as it reclaims its 10 week MA.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are CFX 29.80, TAP 41.80, SIMO 20.20, LTD 39.80, EL 55.85. RAX OKE CL all lost 10 week support today.

Stocks that can shorted at 10 week resistance are PM 75.60, MA 360, DPZ 33, GNC 27.95, TIF 66. GBX HUM both met 10 week resistance today.

Good luck.

The author is flat. We liquidated our holdings today, as we have been trading poorly the last couple of weeks. Our P&L was letting us know our portfolio needed a change. Plus the mental capital that was being spent was taking its toll. We will begin anew tomorrow.

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