Monday, December 19, 2011

Tuesday Game Plan

Markets once again wiped out early gains, and finished with decent losses. Classic corrective action. Both indexes gave up more than 1%. Volume was soft compared with the elevated trade Friday due to expiration. As we like to say here, pay attention to the leaders. They offer key insights to the general health of the market. Break outs are very rare, and should not be purchased in this corrective climate, but some attempted to do so today. ABV ED V all tried to take out valid trigger points intraday, but failed to hold on by the close. Poor action. We are technicians here, and the more we look at leading stocks and industries, the more we see bearish, wide and loose chart patterns. These are much more prone to failure. Big techs AAPL IBM QCOM have all been trading in this fashion recently. Retail stocks COH UA JWN PII have done the same. ROST reversed at had an outside day from an all time high. Transports stocks CNI NSC have both traded very loose and both are having troubles with their respective 40 week MAs. JBHT had a bearish outside, although it was in light volume. Energy equities trading loose include APC CLR. APC lost its 40 week last week, while CLR managed to hold it today. COG has become almost a laggard in the group and we will wait to enter near 40 week support near 66. Another recent leader in the group which has faded to the background is FTI which is now below its 50.30 cup with handle trigger, and has become overridden with distribution. Even utilities have felt the pain with the XLU losing 10 week support today. FE lost 40 week support, continuing its slide from Friday. Banks and semi were hit as well today, what was not, as leader KLAC finally surrendered its 10 week MA today. GS JPM both gave back 3% today, and FRC now remains by far the best looking bank chart out there. Take particular attention to upgrades in this fragile conditions we are experiencing. SPR had 2 upgrades in the last week and was repelled both times at the 40 week. FDX had the big guidance forecast and met 40 week resistance head on. HON was upgraded today and was smacked by its 10 week MA. And just to convey the notion of buying strength and avoiding laggards. Tale of the tape in the steel sector. Recent leader NUE down 2%, today, laggard X 8%. Only good news, besides the fact that I am becoming exceeding bearish, is that the SDS, which has been a good indicator to market direction is near 40 week resistance. Lets see how it reacts there.

Stocks near specific buy points for watch list purposes only are 3 week tight patterns SBUX 45.10, GNC 29.01, V 98.70, WMT 59.30, PM 77.13, RAI 41.71. Cup with handles RAX 45.56, TMK 44.11, PLL 58.30, FMC 86.49. CELG 65.92 in a double bottom base, ABT 55.71, ED 59.99 in flat bases and HSY 61.00 in a cup base.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are DLTR 79.75, DG 39.50, TSCO 71, SWI 28.75, INT 40, BIIB 109.40, HUM 82.50. Stocks that lost 10 week support today were KLAC EMR MMM ARO BBBY M FFIV PMTC CE CBI JEC CSCO BR FISV RJF WFC NUS.

Stocks that can be shorted at 10 week resistance are VFC 133.60, ASML 40, NKE 94.05, BEAV 37.10, BBBY 61, CMG 325, COST 83.70, M 30.80, IBM 185.25, OMC 43, NUAN 24.60, CAT 91.25, CBE 53.10, JEC 39.45, NUS 47.15, DHR 47. Stocks that met 10 week resistance today were NKE BEAV HXL AKAM NUAN ALB CXO CRZO EXXI NBL STLD ARW DE.

Stocks that can be shorted as they lose 40 week support and their sell stop spots are RL 134.50, JWN 46.40, PII 53.10, ADP 50.75, INTU 50.45, CLR 61.75, JAZZ 35.45. CBI BR FE RS all lost 40 week support.

Stocks that can be shorted at 40 week resistance are TYC 45.60, DKS 37.60, DFS 24.20, HLF 53. Stocks that met 40 week resistance are COH UA RTN SPR PXP DFS NUE MON.

Stocks that can be bought at 40 week support are INTC 22.10, BAC 69.15, UNP 97, UPS 70, KMX 29.90, COST 80, RHI 26.10, MENT 12.20, XOM 79, VAR 62.35, NEM 59.50. JBHT PII PAYX NTGR AET KO all found 40 week support today. Buy stops can be put in on these as they reclaim their 40 week MAs. ASNA 30.25, CPO 50.40, ENDP 35.65.

Stocks that can be bought at 10 week support are AAP 66.05, TRN 27.55, DPZ 32, GNC 25.95, LKQX 28.95, SCSS 19.50, TJX 60.20, WMT 57.20, DOV 54.40, CJES 19.15, ALXN 66, ABT 53.50, NUE 38, CPO 49, GIS 39.30, MJN 72.50, SPG 122, ROP 81.60. Stocks that found 10 week support today were HON MWV EOG DEO WCG TROW EL CPO MKC. CELG reclaimed its 10 week today.

Good luck.

The author owns V. We bought it as it passed it 98.70 3 week tight trigger. It did so in mediocre volume and will be kept on a tight leash.

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