Monday Game Plan

Markets ran higher Friday after a decent jobs report. Once again, and for the fifth consecutive week the Nasdaq outclassed the S&P 500. This time it was a full percentage point (3.2% to 2.1%), and the tech benchmark hit an 11 year high in the process. Do almost 12% YTD gains so far this year for the Nasdaq, and 17.4% YTD gains for the SOX seem frothy? Sure they do, but remember the famous adage "markets can remain irrational, a lot longer than we can remain solvent". As always we should remain cautious and vigilant. An interesting comment I heard on Bloomberg on my drive home from Ted Weisburg with Seaport Securities was that phones were basically dead silent suggesting their could be more fuel to add to the fire, as the retail investor still may be on the sidelines. Leading stocks breaking out were numerous Friday, signaling more conviction to this monster move. SWI took out a 33.78 cup base trigger, NOV a 78.55 cup with handle trigger, MA a 385.09 cu base trigger, FISV a 65.51 cup base trigger, and APC a 82.57 double bottom with handle trigger. BIIB retested its 120.76 cup base trigger Friday and held. Leaders breaking out often go on to retreat and retest their prior triggers. Keep an eye on LTD near 43.48, RAX 45.55 and WFM 74.55. Stocks building the right sides of their bases which need to be included on your watch lists to see if they complete cup or cup with handles triggers are KBR A ITW URS ROC CVE FSL PRU. Also find it interesting that recent acquirers continue to move forcefully higher. Not typically the case. GILD EMN are both examples. GILD has moved more than 50% after its purchase late last November of VRUS. More recently EMN has continued a strong advance after announcing its appetite for SOA. Is this an indication of good due diligence for complimentary synergie, a healthy market, or both?

Stocks near specific buy points include cup with handles GBX 26.76, OC 35.87, DE 88.99, IP 32.68, RS 57.40, MRO 32.98, PXP 39.47, AGCO 53.79. 3 week tight patterns are CELG 75.21, PETM 55.06, SBUX 48.72, GPC 65.48, LKQX 33.65, INTC 27.10, ORLY 85.42. Cup bases are FDX 98.76, DOV 70.25, ASH 66.46, CBS 29.78, AVT 38.10, ALB 71.31, WDC 39.12. Double bottom with handles are WFC 31.14, BBBY 63.70, flat bases are FTI 54.98, HCP 42.52, and double bottoms are UA 84.96, DPZ 34.85.

Stocks that can be bought as they retake their 40 week MAs and their buy stop spots are X 33.50, DO 64.25, WLL 52, LAZ 30.25, BHP 82.50, ST 32. BIDU retook its 40 week MA Friday.

Stocks that can be bought at 40 week support are SLB 76.75, TCK 42, VMW 92.40.

Stocks that can be shorted as they lose their 40 week MAs and their sell stop spots are PRGO 91.75, NEM 60.10. COG can be shorted at 34.10, its 40 week resistance. COP DO BHP all met 40 week resistance Friday.

Stocks that can be shorted as they lose their 10 week MAs and their sell stop spots are HUM 88.50, DG 40.75. SO can be shorted at 44.75, its 10 week resistance line. NSC ED TIF all met 10 week resistance Friday.

Stocks that can be bought at 10 week support are MRK 37.05, MCD 98.20. HUM KO both met 10 week support Friday. Stocks that reclaimed their 10 week MAs Friday were PM CVX VFC AMZN DPZ GNC ABT.

Good luck.

The author is flat.