Saturday, December 4, 2010

Weekend Warrior

Markets capped off a bullish week Friday with a nice reaction to a poor jobs number. Markets that open low, close on their highs on bearish news must be taken note of. Volume rose and leading stocks continued to make good headway. The S&P led the way this week with a 3% gain, followed by the Dow with a 2.6% gain and the Nasdaq finished 2.2% higher for the week. Energy and semis were strong once again on Friday while retail and financials were weaker.

Stocks with specific buy points are: HOT @60.10, NBL @86.10, VRSN @35.78, EMN @83.52, AAPL @321.40, TDC @42.08, IBM @147.63, QCOM @49.55, AAP @68.98, MCD @80.10, YUM @52.57, ENTR @10.45, XRX @12.05, SIAL @66.11, BMC @47.05, GR @87.64. All those previously mentioned were flat bases. Cup bases are: VMW @89.28, XLNX @29.50. Cup with handle bases are: AA @14.27, VALE @34.47. Double bottom with handle bases are: XOM @72.00, MRVL @21.10. Cup with high handle bases are: IPI @35.24, CCL @45.00. And KO has formed a 3 weeks tight pattern with a buy point @65.06. As always demand high volume thru the breakout price indicated above.

Stocks that should find support at their 50 day MAs are: JNPR @33, CNI @65, CP @64, JWN @40, YUM @49, LTD @30.25, M @24. Stocks that found solid support, meaning bounced off their 50 day this week in heavy volume were: MOS WYNN COP DOW MUR WLL IBM BIDU DD CLF BHP FCX RIO AEM SCCO CCK CRUS PPG TRMB PCP LOGI HNZ PTEN RAI. Stocks that could look to break back above their 50 day MA are: SMG @52.25, PSA @100.25, PM @55.75, CIB @66. ORCL moved back above the 50 day on Friday.

Stocks that found strong support at the 200 day MA this week are: NEM SWK PFE MRX MTL X BUD CREE WCRX VNO EGO. Stocks that could break thru their 200 day MA this week are: VLTR @23.40, CEDC @28.25, SWN @38.40. Both natural gas stocks RRC UPL are trading nicely after breaking thru their 200 day recently.

Steel seems to be breaking free from its laggard commodity status. MTL MT X all broke free from their 200 day MA this week. Whats up with NUE though? Closes lower on the day and perhaps can be paired up against the bullish steel equities previously mentioned.

Bullish gap ups to pay attention to this week were PAY ANF. MCK broke out this week from a flat base and ATU broke out from a cup with handle pattern.

Par Stars in the news this week: WLT moving ahead by more than 6%, even after disclosing a buy out of Canadas' Western Coal Corp. FCX surging 11% on the week. CMI WLL had a good week. WYNN was subdued this week but finding 50 day support. Who could be the next among the Par Star group. NKE CAT UNP? Studies have shown that the vast majority of stocks that move past $90 a share eventually move to par.

ETFs EWA EWZ EWG all have moved back above their 50 day MA. RSX broke out of a cup with handle base this week but volume was missing. See if it kicks in this week. XLF is now back above its 200 day MA and TBT after finding support at its 50 day MA @34 looks to challenge its 200 day @38.50. If it can proceed thru that 200 day the charge ahead can really pick up steam.

Short possibilities include DTV which we flagged as it lost its 50 day recently. Is it on its way back to its 200 day? BBD looks like its 50 day MA is providing resistance now. Short near that line if it can not get thru it again. VIT had a negative outside reversal day on Friday.

Good luck.

The author holds positions in CAKE NVDA ARMH GPS X CHRW.

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