Saturday, December 17, 2011

Monday Game Plan

Markets once again Friday splashed some cold water on the bulls. Indexes early gains were chopped down throughout the day after a strong opening. For the week the the Nasdaq gave back 3.5%, the S&P 500 2.8%. Both benchmarks surrendered 10 week support during the week. The Nasdaq did so after a bearish outside day Tuesday, and finishing near lows for the day from then on everyday of the week. The S&P 500 encountered 10 week resistance Wednesday through Friday and closed on its lows everyday of the week. Action among key leading stocks was mixed. DPZ lost 4% this week in tame volume and a 10 week test is looming quickly. Perhaps it will enjoy the 10 week support that SWI did this week, despite its own 10% weekly drop. IBM was down everyday this week losing 6%, and its 10 week line in the process. Some leaders managed to hold up. PETM rose 2.5% on the week, displaying excellent relative strength, and hitting an all time high Friday. MRK remains just below a 36.35 cup with handle base. As we have spoke about in the past it is not uncommon for stocks which have broke out in the past to revisit their previous buy points. It is important to see how they react there. EL did so this week, retreating back to its 106.52 double bottom buy point. It held both that and 10 week support. KSU retested its 62.86 cup base buy point and rebounded to close above that trigger and also reclaim its 10 week line Friday which it had lost earlier in the week. SCSS also retested its prior 19.33 cup base trigger and closed just above that number, and is meddling with 10 week support right here. GOOG continues to trade tightly at 52 week highs here. A look at some sectors was worrisome this week. Retail, via XRT lost 4% on the week, after an ugly outside day Tuesday. COH lost ground everyday this week, falling 8% and losing its 40 week MA. VFC lost 6% on the week, after an awful outside day Tuesday, losing its 10 week line that day as well. IYT lost less than 1% for the week, on the back almost entirely of FDX, after a stellar report. Action is mixed in the group however with CNI NSC both discarding their 40 week MAs and the bases becoming wide and loose. JBHT had a nice day Friday and now has a textbook handle on its cup base, which has developed above both the 10/40 week lines. SMH lost more than 5% on the week on the heels of INTC guidance slash Monday. It is still hovering near a 23.49 double bottom trigger, but it looks like a 40 week test is imminent here. LRCX takeover announcement of NVLS did little to help the group. KLAC did manage to find 10 week support Friday. Other leader KLAC did manage to find 10 week support Friday. SIMO looks somewhat suspect after its outside day Tuesday reversing from an 3 year high in the process. Commodities and the global growth story were thrown into doubt with JOY 16% weekly loss on lowered guidance and oil losing 6% on the week. XLE lost its 10 week MA this week and has had continuous trouble with its 40 week this quarter. NBL XOM are still trading above their 40 week MAs displaying solid relative strength in the sector, but leader APC lost 9% on the week as well as key 40 week support it has been enjoying. COG lost its 10 week line and 9% this week. EOG lost its 40 week, but held frim at its 10 week. Recent fracking IPO CJES lost 11% on the week and a 10 week test looks probable. OKE ARG gap ups still look good.

Stocks near specific buy points to be viewed as a watch list only, until the market sheds this corrective phase are: Cup with handles PLL 58.30, ADP 52.85, RAX 45.56, TMK 44.11, CBI 42.02, FMC 86.49, NTGR 38.57, UPS 73.76, UNP 106.09, JBHT 46.69, BA 72.86. 3 week tight patterns are GNC 29.01, RAI 41.71, SBUX 45.10, WMT 59.30. Flat bases are ED 59.99, ABT 55.71, SBH 21.04, BBBY 63.93. Cup bases are EFX 41.00, HSY 61.00. CELG 65.92 in a double bottom base and ADS 107.43 in a cup with high handle base.

Stocks that can be shorted at 10 week resistance are NKE 94, ASML 40, CY 18.05, HXL 24, CMG 324.50, PII 60, AKAM 27.10, IBM 185.25, OMC 42.85, ADSK 33, ATU 22, CAT 91, EMN 38.10, JAZZ 38.15, PPG 83.50, NOV 68, OXY 92. Stocks that met 10 week resistance Friday were KSU MMM COST SCSS AKAM INTU CBE CELG FE STLD JPM ARW DHR CLF FCX DE.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are M 30.60, EMR 48.60, ARO 15.05, BBBY 60.60, RCII 33.80, HUM 82.25, WCG 50.50.

Stocks that can be shorted at 40 week resistance are COH 58.75, DECK 93.50, CNI 74.50, TYC 45.45, DSW 47, VMW 92, TIBX 26.05, PXD 86.50, HLF 53, MON 69.50. Stocks that met 200 day resistance Friday were RTN NSC TYC PMTC DFS QCOM.

Stocks that can be shorted as they lose 40 week support and their sell stop spots are RL 134.50, UA 71.80, JWN 46.30. COH ACN both lost 40 week support Friday.

Stocks that can be bought as they reclaim their 10 week MAs and their buy stop spots are SCSS 19.60, ALB 51.25, CXO 94, CRZO 27, EXXI 29.40, CELG 64.25, STLD 12.70, JPM 32.60, DHR 47.25, CLF 66.50. ASNA NUAN CBI CLR ALXN all retook their 10 week lines Friday.

Stocks that can be bought at 10 week support are LKQX 28.95, SPR 18.05, MWV 28.10, DPZ 31.95, SBUX 42.50, TJX 60.10, SWI 28.95, DOV 54.40, INT 41.10, RJF 29.05, X 25.10, WFC 25.55, GIS 39.30, MJN 72.50. Stocks that found 10 week support Friday were TSCO CE EOG ENG KEG CSCO DEO BIIB TROW RJF X WFC CPO.

Stocks that can be bought as they reclaim their 40 week MAs and their buy stop spots are RTN 45.95, TRN 30.25, HON 53.80, ASNA 30.20, EOG 100, PXP 33.75, FISV 59.10, NUE 39.75, ENDP 35.70. JBHT WSM PAYX KO all retook their 40 week MAs Friday.

Stocks that can be bought at 40 week support are ASML 38.10, KMX 29.90, COST 80, CTCT 23.05, GRA 41, VAL 35.10, XOM 79.05, AET 40, VAR 62.50, AXP 48.10, BR 22.05, NEM 59.50. ADP CLR BR all found 40 week support Friday.

Good luck.

The author remains 100% in cash.

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