Tuesday, November 9, 2010

AM Meandering

Markets took a small pause Monday. Taking a look under the hood however, did show some groups that buyers were active. Energy, chips, autos led the way. A telling sign were how the energy and commodity groups bucked the stronger dollar Monday. Last Friday among stocks on their 52 week high list, and there were plenty, energy led the list. Buy strength.

In the energy sector RIG took out its 200 day MA @66. That line was resistance all last month. RIG has performed well since we flagged it popping above its 50 day MA in strong volume in early August. CNX also took out its 200 day MA @40 in good volume yesterday. These both can be bought here as long as they stay above that 200 day and close above that line. UPL took out its 200 day @44.50, although it was in lower volume. Look for RRC to challenge its 200 day @43 and SWN to do the same with its 200 day @38 this week. Buy stops can be put in for both RRC SWN above those lines. PBR remains above its 50 day MA @35. Look for it to gravitate toward its 200 day @38.

CRZO has a buy point of 26.26 in a cup with handle base. WLT has a 99.55 buy point in an 8 month cup base. May go on to form a handle however. NEM broke thru its 50 day MA @62. Look for it to make yearly highs above 65.50 soon. CAT broke out of a flat base last Thursday @81.30 and is still holding that breakout nicely.

Tech stocks that show my interest right now are: VMW. Put a buy stop @81.50 if it can regain its 50 day MA in strong volume. RIMM headed for a 200 day challenge @59. A (Agilent) is nicely building the right side of its base.

Retail has been popping back up the radar with plenty of leaders (COH TIF WFMI SBUX NKE) showing the way. GPS, although a laggard, can be bought here as long as it can hold its gap up above 20. Right now displaying 200 day support. Watch for 50 day support on BUD @59.

Gap ups still intact include BRCM WFMI COH GPC XXIA LTD HES.

ETFs doing well include FXI which blew thru a triple top on 10/13 and has not really looked back. XLF XHB both sectors that have not performed particularly well recently may be looking to play catch up. They both blasted thru their 200 day MA last Thursday.

Possible short candidates include: MRX, further losing its 50 day MA in big volume. Look for support now at 200 day @26 and resistance at the 50 day @29. DISCA, same chart. Support now at 200 day @27, resistance at 50 day @43.

Good luck.

The author owns FCX ORCL CAKE RADS.

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