Sunday, July 3, 2011

Weekend Warrior

Markets Friday ended strongly, capping off a week of some extremely impressive gains. The Nasdaq finished the week up 6.1% (not a typo), and now it is only 2.5% off its 52 week high. Since January 1st the Nasdaq is now up 6.2%. The S&P 500 closed the week up 5.6%, and rests now 2.3% off its 52 week high. For the YTD the S&P 500 is now up 6.5%. In last weeks weekend roundup we did stress that the 3 very tight weekly closes were signaling a big move. We just were waiting to see which direction that move would go. This week was unequivocal. Being the technicians the indexes have put forth some very constructive action recently. The S&P 500 which never lost its 200 day MA on a closing basis, demonstrating wonderful relative strength, reclaimed its 50 day MA this week as well. A look on the daily chart shows the S&P 500 forming a bullish double bottom buy point as well. 1345.30. A look on its weekly chart shows a cup with handle base forming with a 1370.68 trigger point. The Nasdaq which lagged somewhat recaptured both its 50 and 200 day MAs this week. A look on its daily chart shows a double bottom formation with a trigger at 2835.44. A longer term view if this rally has legs is a peek at its weekly chart which shows a cup with high handle trigger of 2887.85. Of course we as traders are both short and long term participants, and we became bullish last week. Money can be deployed to good risk reward set ups. Two caveats we must be cognizant of was the swiftness this rally has displayed and the low volume that accompanied it. Low volume is traditional this time of year, especially preceding a holiday weekend. But the tape does not lie, and we must respect the action it has put forth. A look at leading stocks that have broken out and have maintained and trended higher, always a good sign, are FMC FAST LULU PX SBUX. The rally this past week was broad, with lots of economically sensitive sectors surging. Energy was of course strong, but other groups showed just as much muscle if not more. Machinery stocks plowed ahead, no pun intended. JOYG up 12%, ROK 10% and CAT 9% for the week. Transports motored ahead as well. EXPD up 10%, CSX UNP 7%, and CHRW 6% on the week. Engine makers CMI up 11% and ETN 9% on the week. Even credit card stocks charged ahead, again no pun intended. AXP up 8%, DFS 7%, COF 6%. Leisure stocks WYN HOT PCLN MAR WYNN all had great weeks. I think you get the picture. Factory orders get reported Tuesday morning.

Stocks offering precise buy points and they are getting plentiful are: Double bottoms MON 74.56, SWC 23.25, FCX 58.85, BHP 96.08, AA 16.93, MCHP 39.77, ALTR 49.01, AAPL 352.23, OMC 49.73, TYC 51.90, MWV 34.12, WMB 31.83, SGY 32.99, OXY 109.09, NBL 94.11, XOM 83.75, CVX 105.31, BHI 76.75, APC 80.85, TKR 52.49, KKR 17.45, ADS 95.37, APH 57.44, UPS 75.68, ORCL 34.40, ABB 27.19, WYN 35.34, CAR 17.97, SOA 25.19, EMN 106.34, PVH 68.56, DECK 93.74. Cup bases are UA 80.10, AGN 85.84, BAX 60.60, WLP 82.02, COST 84.00, PAG 23.34, YUM 57.08, JOYG 102.27, PLL 58.99, WCN 32.79, A 55.43, TMO 65.96, GSM 24.90, COP 81.60, HP 70.56, KEG 19.03, NOV 80.75, RRC 59.74, SPN 41.11, WNR 19.14, MMM 98.05, UTX 90.77, ILMN 76.91. Flat bases are ALB 71.89, ABC 42.60, MSI 48.01. Cup with handles are M 30.10, AET 46.11. Cup with high handle is CRM 154.09.

Stocks that can be bought as they reclaim their 50 day MAs and their buy stop spots are DOW 37.25, LYB 40.75, SOA 23.75, COV 54.95, ZMH 65.90, CBE 62.25, IR 47.75, CTXS 81.75, ORCL 33.60, SAP 62.25, ARW 42.50, KKR 171.0, CHK 30.45, CXO 93, HES 76.50, MDR 20.60, NE 40.25, BTU 59.80, PXD 91.40, SU 40.95, VLO 26.30, WFT 19.30, PAYX 31.55, VCLK 17.25, APKT 73.60, ARMH 29, KLAC 41.95, MXIM 26.50, MCHP 38.85, NXPI 28.10, TXN 34, SCCO 34.25, MOS 68.75, DE 86.30. Stocks that retook their 50 day MAs Friday were CAR MAR RCL HLS SYK VPHM DKS PIR ABB ITW CHRW JBL MOLX PKI TTMI COF TROW GTI CVX XOM OXY HK RDSA SE SGY WMB CCK IP DHR ADP MCO AAPL PCS MSI ADI CY BRCM AA CMI ENDP PSA. Stocks near 50 day support are CHKP 54.30, NAUN 21, TIBX 27.90, X 44.80, SLB 84, HON 58.95, EMC 27.50, QCOM 56, TWC 76.25, ADI 39.50, SMTC 27, BHP 93.80, POT 54.25, AGU 84.80, IPI 31, ACOM 38.50, RAX 42.10. Stocks that received 50 day support Friday were APA BHI NBL RDC WAT WSH ARUN.

Stocks that can be bought as they break through their 200 day MAs and their buy stop spots are LVS 44.25, HOT 58.75, AVT 33.25, TROW 62.30, TS 46.20, CAM 50.85, NBR 25.25, TCK 53, JDSU 17.25, DE 85.75, JPM 42.95. Stocks that retook their 200 day MAs Friday were BID DIS CBE EXPD AMP MT BP NFX EMR PAYX TXN VALE. Stocks near 200 day support are ATI 60, FTI 42.75, VECO 46.30. Stocks that found 200 day support Friday were ANN CXO EOG NE PXD SUN OPEN. Stocks that can be shorted at 200 day resistance are ADSK 39.55, IVZ 24, DVN 80. Stocks that found 200 day resistance Friday were LVS VRSN TS CAM HES NBR TCK. Stocks that can be shorted as they lose their 200 day MAs and their sell stop spots are PAY 42, EOG 101.50, OPEN 81.

Stocks that can be shorted at 50 day resistance are STJ 50.15, ANF 71, LTD here, MUR 67.50, FCS 18.05, LRCX 46, AEM 63.75, ABX 46, PAAS 32, SLW 34.75. Stocks that encountered 50 day resistance Friday were SOA CTXS CHK HES NFX BTU PBR KLAC MCP MOS. DAR lost its 50 day MA Friday.

Good luck.

The author owns XOM DE FCX.

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