Tuesday Game Plan

Markets rebounded in a healthy fashion Monday as Black Friday and another Euro "band aid" was announced. It gained impressively in the last hour, just when it looked as if things were about to fall apart. Volume was up sharply compared to Fridays levels but below average. The Nasdaq outperformed with a 3.5% gain, against the S&P 500s 2.9% advance. The S&P 500 stalled near an important round number of 1200. Just in front of that is 10 week resistance at 1204. A move above the 10 week on strong volume would be nice. SDS, a double bearish S&P ETF, met 10 week resistance today but did manage to find support at the 40 week. Breakouts were basically nonexistent today, which did not bolster confidence. However, the action of the tape must be respected. Some more valid bases are starting to develop among the strong stocks that consolidated during this ongoing correction (they will be discussed in the next paragraph). On greenback weakness today, energy stocks were powerful. XLE recaptured its 10 week MA on decent volume. My favorite COG retook its 78.75 double bottom buy point, and CXO retook its 40 week. IYT also reclaimed its 10 week today although volume was soft. KSU, the leader of the pack, advanced more than 5% on robust volume, and remains one of a few overall that are still above recent buy points. It took out its 62.86 cup base buy point on 10/27. XLU encountered stiff 10 week resistance today, and ED had a bad reversal intraday and finished UNCH. XRT met hard 40 week resistance and closed in its lower half of the trading range today despite record Black Friday figures. DECK VFC COH were the cream of the crop today. All three reclaimed their 10 week MAs and were up at least 6.5%, with COH up a devilish 6.66%. TSCO BBBY WMT finished near their lows for the day. SMH rose 3% today, below the Nasdaqs 3.5% gain. It is readying itself for an eventual 10 week test at 30. I would short it there. Contrasting the leader/laggard in this group SIMO was higher by over 7%, closing near highs for the day, while AVGO just barely finished higher, just escaping a negative outside day. Let see how this market plays out. We must be ready for bullish and bearish scenarios. As they say, the best trade is normally the hard trade. Their does seem to be a lot of skepticism about todays move so perhaps their will be some further follow through. I am not in that camp, but more importantly I follow the tape, and not my own opinions. That is how we are measured. Our P&Ls. So trade prudently and accordingly. TIF reports tomorrow.

Stocks near specific buy points and to be put on a watch list should the markets sentiment improve further are cup with handles MELI 90.09, BUD 59.57, NSC 76.30, FTNT 26.30, JKHY 33.83, COH 66.64, FFIV 113.70, RAX 45.56, FTI 50.30, INT 42.22, ECL 56.41. Double bottom with handles are CBI 40.10, CXO 102.07, CLR 72.39. Double bottom is WPI 72.16 and V 95.92 in a flat base pattern.

Stocks that can be shorted at 10 week resistance are RL 147, COST 83, LTD 41.65, TSCO 69.40, WFM 68.05, ADP 50.10, EMC 23, ATHN 58, ORCL 31, BIDU 130, AMGN 56.40, JAZZ 39.80, PNC 51, DOW 26.25, PX 99. Stocks that met 10 week resistance today were COST DLTR ULTA INTC SO INFA HANS GIS ADS PNC BBT CLF FCX NEM DOW EMN MON COP DVN XOM RRC. Stocks that can be shorted as they lose 10 week resistance and their sell stop spots are SCSS 17.70, WSM 34.75, NUS 44.75.

Stocks that can be shorted at 40 week resistance are AMZN 200, NVLS 33.10, CERN 60.40, HSY 56.50, CPHD 32.95, MAKO 30.10, DFS 24, PPG 84.50. Stocks that met 40 week resistance today were LULU WSM QCOM ACN GILD MAKO EFX FMC APC PXP. ABX can be shorted with a sell stop under 49, as it loses 40 week support.

Stocks that can be bought as they reclaim 10 week support and their buy stop spots are ABV 32.65, JNPR 21.50, INTU 51.55, HANS 90.30, BMY 31.75, WPI 67.85, ADS 97.30, BBT 22.55, FCX 36.50, NEM 66.10, EMN 37.75, X 24.50. Stocks that retook their 10 week MAs today were DECK COH NKE UA VFC HXL TIF QCOM DEO UPS IBM SGI VMW ADSK NUAN RHT SAP GOOG ALXN XRAY IP CBOE V TROW SCCO APC DHR NUE. Stocks that can be bought at 10 week support are DPZ 30, SBUX 41.10, CBOE 26, SCCO 28.85, CRZO 25, NOV 64, NUE 36. MDRX found 10 week support today.

Stocks that can be bought as they reclaim their 40 week MAs and their buy stop spots are MDRX 19.70, CTXS 70.75, PMTC 20.90, JEC 42.15, PAY 44, EFX 35, JOYG 87.50, PLL 52.40, EOG 100.25, EXXI 30.50, PXP 33.75, CBS 25.20. Stocks that retook their 40 week MAs today were BEAV UNP CHKP CPO AMGN CXO USO NBL. Stocks that can be bought at 40 week support are PCP 155, JBHT 43.05, CPO 50, URI 24.25, NBL 88.75.

Good luck.

The author is flat. We sold FE early today for a $1 gain overall. Will look to repurchase if it trends back to its 40 week and holds.