Thursday, December 1, 2011

Friday Game Plan

Markets provided some soothing relief after yesterdays gigantic gains. The Nasdaq finished up by .2%, while the S&P 500 closed lower by that same margin. The benchmarks remain in between their 10 and 40 week MAs. They can be tested to the upside with a benign job number. Volume was gentle as market participants await Fridays job report. As we always discuss here, a key barometer to the markets health are the behavior of leading stocks and the amount of break outs occurring with those generals. Leading groups are hailing from more defensive related sectors, not the traditional growth names you would come to expect. As far as breakouts are concerned, they are scarce. COST tried to breakout from a 86.44 flat base today, but volume was mediocre. DEO tried to break out from a 86.10 cup with high handle base, but reversed just 2 pennies from that trigger. M DG both tried to break out today as well, only to reverse, and close lower on the day. SCSS is back to its 19.33 cup base buy point on 10/20, as it has acted well finding support at its 10 week, while groupmate TPX has faltered. HD is still above its 38.85 breakout from a double bottom with handle it took out Tuesday. EL HUM remain above buy points, but we need to see more of that behavior. JBHT is patiently developing the right side of its base. SMH acted well today and is nearing its 40 week near 31. Lets see how that ETF reacts there. KLAC rose smartly as it assumes its leadership role. XLE IYT both are scoping out there 200 day MAs and moves above those will provide much needed comfort going into year end. The action in energy leader COG was concerning although the move came in normal volume. I am proposing a new pair trade tonight. Long DEO/Short TAP.

Stocks near specific buy points include cup with handles COH 66.64, BEAV 40.14, AAP 71.10, KLAC 48.85, CNI 80.54, NSC 76.30, UNP 104.26, FTNT 26.30, RAX 45.56. Double bottom with handles are MDRX 21.20, USB 26.74, JOYG 93.94, CXO 102.07, CLR 72.39. Flat bases are ED 59.99, IBM 190.63, ALXN 70.52, BMY 33.37. GIS 40.35 in a cup with high handle base.

Stocks that can be bought as they reclaim their 40 week MAs and their buy stop spots are NVDA 16.15, TRN 30.20, ADSK 36.25, AKAM 29.70, JEC 42.25, MAKO 30.70, AXP 48.25, TROW 58, DE 82, CAT 98.25, CMI 100.25, COP 72.25, ARW 37.25, DHR 49.45, NUE 39.90. ADP ORCL both retook their 40 week MAs today. Stocks that can be bought at 40 week support are DKS 37.80, ASML 38.50, QCOM 54, UPS 70, CTXS 70.25, CPO 50, XRAY 35.80, CE 45.25, PPG 84.25, JOYG 87, EOG 100, EXXI 30.20, OXY 95, PXP 33.60, CBS 25. Stocks that found 40 week support today included ARMH MDRX PMTC EMR HON PAY CE PX CVX EXXI XOM NOV.

Stocks that can be bought as they retake their 10 week MAs and their buy stop spots are NTRS 37.95, HSY 58.25, AAPL 392, CTSH 68.30, CELG 64.25. FE EMC both reclaimed their 10 week MAs today. Stocks that can be bought at 10 week support are DECK 104, NKE 92, HXL 23.45, TSCO 70, ACN 56.25, JNPR 21.60, NUAN 23.75, BBT 22.45, NEM 65.90, RIO 51, MON 71, BHI 53.50, CJES 18.25, HAL 35, SM 75, SU 29.30, NUS 45.80, REXX 14.55. BBY CMG FIO TIBX WY BHP all found 10 week support today.

Stocks that can be shorted at 40 week resistance are LULU 50, AMZN 200, ADI 36.55, SWK 67, TPX 60. BIDU MAKO DFS AXP ARW all met 40 week resistance today. CHKP can be shorted with a sell stop at 54, as it loses 40 week support.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are BBBY 59.75, TAP 40. Stocks that can be shorted at 10 week resistance are RL 147.50, JAZZ 39.60, JPM 32, POT 46. Stocks that met 10 week resistance today were WFM EXPD CTSH HSY VLO WYNN PCLN.

Good luck.

The author is long KEG. We bought some as it retook its 40 week MA this morning. Tight stop here, and will obviously be affected by tomorrows jobs report.

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