Sunday, July 31, 2011

Weekend Stock Reflections

Markets offered little inspiration Friday, or for that matter the whole week. The S&P 500 made it a perfect 5 for 5 Friday finishing lower everyday last week. For the week the S&P 500 fell 3.9%, and the Nazz 3.6%. The intraday action remains troubling with indexes falling late into the close. The one positive is that the S&P 500 did have a nice bounce off its 200 day MA Friday. Although it did lose its 50 day MA earlier in the week. The Nazz's positive is that it did rally 30 points off its intraday low Friday and found 50 day support. Action among leading stocks, a great barometer of market health, for the week was dismal. Weekly losses for former leaders this past week included BMC down 18%, ACOM 18% (did find 200 day support to the penny though), NTGR 18%, ILMN 16%, ITW 13%, WAT CHRW CLF all down 10%, MMM lower by 8%. EMN was also off 4% for the week, finding support right at its 200 day MA. Some positive earnings reactions Friday included DECK, which held its 50 day MA to the penny, and then flew toward par. EXPE up 9%, after finding support the day before ight at its 50 day MA. JAZZ was up 15%, CERN 7% as well on earnings Friday. A look at some important sectors, shows some concerns. The transports ETF IYT is at a critical juncture here. It lost its 200 day MA Friday, but was able to recapture it by the end of the day. FDX UPS both down 6% this week not helping the cause. XLB, a materials ETF, lost its 200 day MA Friday as well but managed to finish off its lows. The semi ETF SMH has looked horrible after losing its 200 day MA recently. Some in the sector are holding their 200 day MAs nicely however. XLNX ALTR. ARMH remains above its 50 day MA. Perhaps a pairs trade is in order against some of the laggards in the group. The XLF continues to find support around the 14.50 level, but I find this to be a contrarian indicator as the market has actually performed well as they sagged. Just a chart readers opinion as illogical as that may sound. Stocks still holding bullish gap ups in this anemic environment include AAPL AMZN JWN CROX TPX QCOR PM GOOG IBM BBG RRC. Among the companies we follow reporting earnings Monday are HUM before the bell, and HLF HUM OIS SM FMC PPO report after the close. SINA also reports Monday. For first time giving my top 5 plays for the week and stop prices down below.

Stocks offering specific buy points, and worth inclusion on your watch list until we see some market resilience are: Cup with high handles ANF 78.35, BBBY 60.65, NCR 21.07, WPRT 28.15, ATW 48.94, PXP 42.06, SM 80.91 (reports after the bell Monday). Double bottom with handles are EBAY 35.09, NKE 94.33, BEXP 34.03, EXXI 35.46, NBR 27.73. Cup with handles are DFS 28.02 (cup dates back to its IPO ON 07/06/07 on its weekly chart), JOYG 101.54, PXD 99.74 RIO 74.10. Cup bases are APC 85.60, CHK 36.05. 3 week tight pattern is SBUX 41.00.

Stocks near 50 day support are AN 36, BBBY 56, KMX 30.95, MCD 83.85, PAG 21.45, KO 67, CHKP 56, POL 15.05, MTZ 19.95, NSC 73.10, ACN 58.10, MON 70.70, POT 56, WPRT 24, PTEN 30.75, ROSE 49.75, WMB 30, SLW 34.60, ABX 46.05, GILD 41.05, SWKS 24.20, PENN 40, HSY 56. Stocks that found 50 day support Friday were ANF CHS DRI DLTR M TIF TSCO COH UA WYN WPI R KSU SINA IP VCLK SQM GS GSM CMI APA CRZO CVX EXXI ARMH SCCO WCN. Stocks that can be bought as they reclaim their 50 day MAs and their buy stop spots are JBHT 46.25, CCK 38.75, SOLR 14.25, WLK 53.50 (earnings before bell Tuesday). ARBA LYB both retook their 10 week MAs Friday.

Stocks near 200 day support are EAT 23, FAST 31, FL 20.05, YUM 51.50, HNZ 50.25, LVS 44.35, CELG 57.95, XRAY 35.95, MYL 22.30, ABV 29.40, INFA 48.30, NUAN 19.10, SIAL 66.05, CMCSA 23.30, QCOM 53, TWC 70, EMC 25.15, ROP 79.80, BX 16.05, ABB here, AME 41.10, CXO 91.40, COP 71, XOM 78.65, ALTR 40, GPC 52. Stocks that found 200 day support Friday were TITN YUM BDX VPHM WLP ZMH CSX SWI DD UTX CAT UPL XLNX ALTR. Stocks that can be shorted at 200 day resistance are CAKE 30.30, BID 44.10, CAR 15.60, ORCL 31.90, APD 90, VMED 27.90, HON 55.10, JBL 19.05, MOLX 24.60, ADP 49.90, DOV 62, TRW 54, SU 39.80, RIG 64, SMTC 24.30, WY 21. ANN DKS CAR DOW AGU KLAC all met 200 day resistance Friday. Stocks that can be shorted as they lose 200 day support and their sell stop spots are STJ 45.50, DD 51, BG 67.50, OXY 97.50, GG 47. KMX TYC OVTI all lost their 40 week MAs Friday. Put in a buy stop on MOS @73.50, as it retakes its 40 week MA. FTNT retook its 40 week MA Friday.

Stocks that can be shorted at 50 day resistance are ANN 27,COST 80.05, DKS 38.05, LTD 38.20, PETM 44.80, HRL 29.30, CHD 41, AET 43.50, AGU 82.10, BAX 59.50, ERTS 23.50, TIBX 27.55, ALB 68, SOA 22.50, CNI 77, VIAB 49.90, DIS 39.50, RAX 42, MCO 38, JPM 41.05, RS 49, DVN 80, MRO 31.55, AVGO 35.10. Stocks that met 50 day resistance Friday were LTD ICON CRL XRAY MYL PX BLL MS ATU BTU WLL CLF. Stocks that can be shorted as they lose their 50 day MAs and their sell stops are UA 71, WPI 65.80, DTV 49.60, CBS 27 (reports after bell Tuesday). Stocks that lost 50 day support Friday were CI AXP DISH MSI DELL ROP XOM KLAC.

Top 5 plays for the week. ALTR buy at 40.40, stop at 39.50 (200 day play). UPL buy here, stop below 46. UPL has closed within a 30 cent range everyday last week, garnering 200 day support in the process, amazing giving the volatility and weakness last week. ABB buy 23.75, stop 23.25 (200 day play). VPHM buy 17.95, stop 17.40. Earnings out of way and reclaimed 200 day intraday Friday. Short WPI under 65.80, its 50 day MA. That would undercut a long term secular uptrend. Stop at 66.60.

Good luck.

We added some SDS for protection Friday as it took out its 50 day MA on enormous volume.

The author owns DE FCX WNR WOR SDS.

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