Wednesday, November 30, 2011

Thursday Game Plan

Markets exploded to the upside Wednesday as central banks around the world announced coordination plans to try and help alleviate the Euro crisis. Volume expanded across the board, as liquidity will eventually be thrust into the capital markets. The S&P 500 rose 4.3% retaking its 10 week MA. A 40 week test looms at 1262. The Nasdaq gained 4.2%, also retaking its 10 week MA today. The day saw some breakouts as well which have been rare recently. Today the energy sector yielded some nice breakouts. INT took out a 42.22 cup with handle on trade 163% above daily average volume. FTI took out a 50.30 cup with handle on trade 48% above normal. ECL took out a 56.41 cup with handle today on trade 455% above normal (breakouts are considered valid if volume is 40% greater than avg daily vol.). Others broke out today but volume did not confirm the move. They include BUD CBI V URI NBL. Energy continued its winning ways as the greenback slipped. XLE is now approaching its 40 week MA again. Put in a buy stop on that ETF @72.25. Banks decided to join the party today with the XLF up 6%, taking out its 10 week in the process. MS rose 11%, GS JPM 8%. The transports have been leaders and the IYT can be purchased with a buy stop above the 200 day @90.25. Stocks in that group which have formed valid bases are CNI NSC UNP. Leaders outperforming today and reaching all time highs were SWI up 7%, VRSK QCOR both up 5%. We mentioned to keep an eye on stocks demonstrating relative strength on weak tapes. The XRT did manage to take out its 10 and 40 week MAs today. Action in the group was bifurcated today however. M finished near a multi year high. Others fell as they reached new highs and reversed. They included NKE COST FAST ROST. BBBY DKS TSCO ULTA reversed from their highs of the session buy the end of the day. The semis had a strong day as the SMH reclaimed its 10 week MA and rose almost 6%. That has been an under performer and I would look to short that ETF near 200 day resistance at 31. As we always keep an eye on relative strength. Relative weakness should be paid attention to as well. Today that we seen from RL AMZN GNC KSU TIF FIO CJES. TIF met almost exact 40 week resistance after a poor earnings report Tuesday. Tomorrow ULTA LULU report.

Stocks near specific buy points include cup with handles PPG 90.10, RAX 45.56, FFIV 113.70, FTNT 26.30, UNP 104.26, NSC 76.30, CNI 80.54, ABV 34.89, AAP 71.10, MELI 90.09, BEAV 40.14, COH 66.64, OXY 101.75, PXP 37.01. Double bottom with handles are JKHY 33.83, USB 26.74, JOYG 93.94, APC 84.52, CLR 72.39, PXD 97.20. Flat bases are DG 40.81, ED 59.99, IBM 190.63, ALXN 70.52. Cup with high handles are DEO 86.10, GIS 40.35.

Stocks that can be bought as they reclaim their 40 week MAs and their buy stop spots are NVDA 16.20, FDX 88.75, SGI 16.15, ORCL 31.70, AKAM 29.60, JEC 42.25, TROW 58, DE 82, CMI 100.25, COP 72.25, KEG 15.20, ARW 37.20, DHR 49.50, NUE 40. Stocks that retook their 40 week MAs today were WSM ARMH ASML QCOM NVLS CERN CTXS PMTC SAP HSY CPHD XRAY EMR HON IP USB PAY CE FMC PX CAT JOYG PH PLL CVX EOG XOM EXXI NOV CBS. Stocks that can be bought at 40 week support are MDRX 19.20, XRAY 35.80, EMR 51.75, CAT 97, EOG 100, CBS 25. WPI found 40 week support today.

Stocks that can be bought as they retake their 10 week MAs and their buy stop spots are WFM 68.55, CHKP 56.50, CELG 64.20. Stocks that retook their 10 week MAs today were PCP LTD TAP EXPD ACN ATHN INTU NUAN CMG BIDU WY AMGN BMY BBT RIO DOW EMN BHI HAL SU TCK X. NUAN can be bought at 10 week support at 23.50. BBBY found 10 week support today.

Stocks that can be shorted at 40 week resistance are LULU 50.25, ADSK 36, BIDU 135, SWK 67, MAKO 30.15, DFS 24.05, TPX 60, PCLN 505. Stocks that met 40 week resistance today were LULU TIF ADP ORCL KO AKAM JEC MAKO AXP KEG.

Stocks that can be shorted at 10 week resistance are HSY 58, CPHD 36.30, WYNN 122. Stocks that met 10 week resistance today were RL WFM ADI FE CTSH EMC KO JAZZ NTRS BWA SWN VLO WYNN. SCSS can be shorted with a sell stop of 17.80, as it loses 10 week support.

Good luck.

The author is flat. We sold FE at 44.36 as it met 10 week resistance. We were fortunate for the upgrade it caught today. We covered AMGN just before the open at 56.45. Again very fortunate.

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