Monday, January 3, 2011

Monday Monday

Markets started the New Year off on a very bright note. Volume came in stronger than previous weeks levels, although it was just normal on average. Leading stocks performed well which legitimizied the days rally. Energy and financials led the way. The Nasdaq led the way with a 1.5% gain. Markets started the day on a strong note with US factory showing a 17th consecutive expansion phase.

Stocks near specific buy points are: 3 weeks tight, ORCL @32.37, ANF @58.60. JCI @40.25 in a flat base. JWN @44.05 in a cup with handle. And CRUS @17.06, NETL @34.45 and GCI @16.27 all double bottom with handles. Stocks that did break out today were: CLF @80.50 in a cup with handle formation. VMW @92.05 from a 4 week tight pattern. NTAP @56.65 in a cup with handle. NSC @63.77 in a 4 weeks tight pattern. CAVM @40.22 from a flat base. MTL @29.84 from a cup with handle. ROK @72.69 in a 3 week tight pattern. PAYX @31.39 in a cup with handle base. All of those breakouts mentioned were on big volume.

Stocks near their 50 day MA are PTEN @20.80, STZ @21, NVLS @31 and COH here. Stocks that had strong support over the last day or two are PCLN CRM XXIA FOE VRSN TDC PCP UA NKE TIF KLAC TQNT. Stocks that bounce off that 50 day in strong volume can be bought as long as that line remains intact. Stocks that can be bought as they move upward thru their 50 day MA are: MCO thru 27.20, EPD thru 42.25, DTV thru 41.65, BUD thru 59.15, IBN thru 52. As always demand strong volume. Stocks that broke above their 50 day MAs today in strong volume were WYNN VNO GOOG ARUN.

Stocks near their 200 day MA are PBR @36.50, URBN @35, TBT here. BBT can be bought thru 27.25, its 200 day MA.

Gap ups holding intact are APC RHT CCL.

Stocks showing weakness today were: Outside reversals were WLL NBL IPI NLC OVTI. Stocks that were stopped at their 50 day MAs today were SMG LVS LTD. HAS WRC AAP all fell under their 50 day MA in heavy volume. Bearish action. AEM had a huge down day proving that 5% plunge 12/16 under its 50 day MA was no fluke.

As I alluded to during todays session I pared the portfolio back significantly. The market has had a big run and I took advantage of a traditional first day of the month strength. I still believe in the rally but didnt like the reversals in some commodity and other sectors today.

WCRX we sold for a 2% gain after buying it @22.30 on 12/17 as it broke above its 50 day MA in big volume. GPS we sold for a 5% gain after buying it thru its 200 day MA on 11/30 in big volume. NVDA we sold for a 20% gain after buying it @13.20 on 11/18 as it found 200 day support. And we sold X after buying it @50.15 on 12/1 for a 20% gain as well. We may revisit these names on pullbacks.

Good luck.

The author owns ARMH CHRW DE VRSN KKR SDS. Short TTM EBAY.

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