Saturday, November 6, 2010

Weekend Warrior

Indexes took a healthy pause after a big rally on Thursday. Volume was tame. Just what you want to see after a big run up. For the week the S&P led the way with a 3.6% gain. The Dow and Nasdaq both finished just under 3%. The jobs number premarket Friday was benign. A stronger than expected 159,000 jobs were created in October but the market failed to rally on the news. As a bull market should act it closed with a late round of buying to finish near highs of the day.

Semis have been strong as of late. TXN hitting 2 yr highs. Looking like its former leader self. Two small caps in the group that had nice earning gap ups recently include: AXTI ATML. Look for them to hold their gap up and move higher. MRVL MXIM looking strong as well. NVDA closing in on its 200 day MA @13. Put in a buy stop just above that line. ARMH continues to struggle with its 50 day line @18. If it can bump up and push thru it put a buy stop @18.25. If it fails there it can be shorted.

The metals are all looking bullishly on the charts here. NEM a buy stop can be put going thru the 50 day MA @62.40. If we can be fortunate to get some ABX @47 near its 50 day pick some up. Put a buy stop in on X @50, the 200 day. It has been stopped at the line in both July and August. Put in a buy stop on NUE @42, also its 200 day MA. Is it any surprise that a foreign steel maker is a little bit ahead of our own domestic steel producers. MT peaked its head above the 200 day line late this week. Purchase it near that line if you can.

A common theme I have repeatedly brought up these last couple weeks are the earnings reactions among leaders. Having negative response to the report (the day of the earnings report) only to find support at its 50 day, then proceed higher. Add AMT which found support @50, its 50 day MA, then finishing 2 dollars higher. DVA PPO CEDC did the same thing late this week. Other names that acted in similar fashion this week were CMI HLF HS CHRW SUN.

Stocks with specific buy points are: ROVI @53.10 (flat base), TKC @19.48 (cup with handle), WLT @99.55 (cup without handle, although it may go on to form a handle). HES broke out on 10/18 @64.78 from a cup with handle base. This week had a nice earnings related gap up. Watch that one closely.

SBUX had an earnings gap up. WFMI gap up still intact, but barely so. XXIA broke away from its recent gap up in big volume this week.

Other entry points for stocks are: CNX @40.50, UPL @45. Both buy stops thru their respective 200 day MAs. CEDC looks to challenge its 200 day this coming week. A buy stop can be put in just above 28, its 200 day.

JCG perked its head up above its 50 day MA ON Friday. BUD 50 day is 59. It should be bought there. CNI needs to hold its 50 day right here. Other stocks looking real strong now are AA GS KBR.

DISCA MRX both losing their 50 day MAs. Lets see if those lines act as resistance their now.

Good luck.

The author owns FCX ORCL CAKE RADS.

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