Tuesday, January 31, 2012

Wednesday Game Plan

Markets finished mixed today as the month ended with bulls giddy. The Nasdaq once again beat its counterpart S&P 500 again today, and clobbered it on a monthly basis. The Nasdaq gained 8% for the month. Leading stocks were quiet today. CBI once again held its 42.02 cup with handle buy point, almost to the penny. INTU retested its own 55.52 flat base trigger almost exactly and then proceeded to rally. Disappointments included TSCO which reversed after eclipsing an 82.08 3 week tight trigger. It can right itself in the next couple of days, but that is usually not a great sign. ADP is now below its 55.12 cup base buy point, and it illustrates the importance of demanding a big volume bump to validate the break out. Yesterday we mentioned as a big round number of 50 being the line in the sand for JBHT. Today I nominate KLAC as having that same big round number of 50, as its own line in the sand. As it busted through that 50 handle, 1/18 this year it was done so on very healthy trade, and has continued to defend that number 50. Stocks building the right sides of their bases and to be put on a watch list are DOV NUE CPO DHR ALB. Stocks putting handles on their cup bases, which need to be 5 days in duration, are BLL ASH JEC. Gap ups still looking good include TSS CA EMN CLR COH AAP AAPL. AMZN was down 8% after hours on a sour report.

Stocks near specific buy points include cup with handles SMTC 29.40, TWI 25.21, FDX 93.62, SWK 73.39, IP 32.68, EXXI 34.77, PXP 39.47, AMP 55.71. Cup bases are BIIB 120.76, CBS 29.78. Double bottom with handles are SPR 23.61, APC 82.57. 3 week tight patterns are TSCO 82.08, VRSK 41.11. Double bottom is UA 84.96, and ASNA 35.92 in a cup with high handle pattern.

Stocks that can be bought as they reclaim their 40 week MAs and their buy stop spots are LAZ 30.25, DO 64.40, WLL 52.25, VMW 92.75.

Stocks that can be bought at 40 week support are NSC 71, KBR 31.10, RAI 37.95, MMM 85, SGY 27, FCX 44.25, ESRX 49, ITUB 19.50. JPM MUR TIBX all found 40 week support today.

Stocks that can be shorted as they lose 40 week support and their sell stop spots are CNI 74.60, PH 79.50, CVX 101.75. TD lost its 40 week today. NTRS can be shorted at 41.75, its 40 week resistance. MWV met 40 week resistance today.

Stocks that can be bought as they retake 10 week resistance and their buy stop spots are MA 361, COST 83.15, NEM 63.25. RAX CPX HUM CL all retook their 10 week MAs today.

Stocks that can be bought at 10 week support are HXL 24.50, RTN 47, BUD 59.80, ARG 77.25, XOM 82.50, V 98.15, SO 44.55, EAT 25.25, DLTR 82. CFX TROW FTI BBBY SBH all found 10 week support today.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are KSU 67.75, SIMO 20.30, ANN 23.75, BBBY 60.10, M 32.50, MCD 97.50, ORLY 79.50. ALGN lost 10 week support today.

Stocks that can be shorted at 10 week resistance are PM 75.70, ABT 54.90, PRGO 97.10, DPZ 33, GNC 28, TIF 66. NSC MA VFC GBX all met 10 week resistance today.

Good luck.

The author is flat.

Monday, January 30, 2012

Tuesday Game Plan

Markets displayed some strong resilience Monday, as indexes started upon session lows and finished near their highs. Again the Nasdaq did perform better than the S&P 500, although both finished lower. The big round numbers of 2800 and 1300 seemed to provide some support for the benchmarks. Leading stocks were quiet, but many are in the process of retreating to or have already retested prior triggers. PII for a third consecutive day bounced right off its 63.16 double bottom buy point. FFIV bounced again off its 117.40 cup with handle trigger. Others that are retreating to their prior triggers and must be watched to see how they hold up are: DFT (24.87 cup with handle), NTGR (38.57 cup with handle). Banks had a tough day, although XLF did manage to find 40 week support today. JPM, intraday fell below its 40 week, but climbed above that line by the close. WFC had a bullish inside day. Stocks that had bullish outside days today included NKE MON QCOM. Gaps that are still holding up and consolidating, which indicates true strength are AAPL AAP COH CLR EMN LULU CA WDC. As long as these gaps remain intact, play from the long side. Other stocks that caught my attention today were ARG, a best of breed chemical, that has acted well ever since its 10 week MA proved sturdy following last Thursdays earnings report. JBHT which broke out to all time highs last week following a bullish forecast, looks to have the big round number of 50 as its line in the sand. JAZZ had a bearish reversal today after attempting to break out from 49.24 cup with high handle pattern.

Stocks near specific buy points are cup with handles FDX 93.62, TRN 33.02, GD 72.99, ETN 50.30, IP 32.68, CE 50.10, EXXI 34.77, PXP 39.47, AMP 55.71. Double bottom with handles are SPR 23.61, APC 82.57. 3 week tight patterns are VRSK 41.11, TSCO 82.08. CBS 29.78 in a cup base, RL 152.10 in a double bottom base, and ASNA 35.92 in a cup with high handle base.

Stocks that can bought at 40 week support are KBR 31.10, MUR 58.40, SGY 27, PRGO 92, CL 88, FCX 44.25, ITUB 19.50. JPM CVX ARMH NEM all found 40 week support today. WLL can be bought with a buy stop of 52.25, as it reclaims its 40 week MA.

Stocks that can be shorted as they lose their 40 week MAs and their sell stop spots are CNI 74.50, PH 79.55, COST 80.80.

Stocks that can be shorted at 40 week resistance are NTRS 42, COG 34.05, FE 43.50, KO 67.70. TCK TGT met 40 week resistance today.

Stocks that can be bought at 10 week support are HXL 24.50, RTN 47.95, TROW 56.65, SOA 44.50, EAT 25.25, DLTR 82, VMW 89. KSU BP FTI UA SO ANN BBBY MCD JWN MWV. CPX can be bought with a buy stop of 33.75, as it reclaims its 10 week MA.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are CFX 29.80, TAP 41.80, SIMO 20.20, LTD 39.80, EL 55.85. RAX OKE CL all lost 10 week support today.

Stocks that can shorted at 10 week resistance are PM 75.60, MA 360, DPZ 33, GNC 27.95, TIF 66. GBX HUM both met 10 week resistance today.

Good luck.

The author is flat. We liquidated our holdings today, as we have been trading poorly the last couple of weeks. Our P&L was letting us know our portfolio needed a change. Plus the mental capital that was being spent was taking its toll. We will begin anew tomorrow.

Sunday, January 29, 2012

A Contrarian Endorsement for the Salamander (Newt)

As an unapologetic Republican, I must admit as the November election looms, my trepidation grows. Intrade.com has Obama slowing gaining steam in the probability of his reelection prospects. Rasmussen Reports, probably the most accurate polling website, has Obama widening his lead on Republican front runners Gingrich and Romney in head to head contests. More troubling for the GOP hopefuls is the gradually improving, albeit very slow, economy. Since Obama was sworn in on January 20th, 2009, the Nasdaq has advanced from 1477 to this week's closing number of 2816. Almost a double. Give credit where it is due, warranted or not, but this did occur under his watch. However, unemployment still hovers near recent historical highs, (at which an incumbent was never reelected), and more importantly, the media is savoring a Romney nomination this fall. Is this not the man who four years ago could not even defeat John McCain, who in turn was beaten by Barack Obama?

Please do not misinterpret me. I think Mitt Romney would be a fine president. He looked as presidential as ever in the last debate. He is an entrepreneur who achieved the American dream on the heels of hard work and perseverance. I admire his success just as everyone in this fine nation should. But remember, I am here to introduce my contradictory opinion. Newt seems to me to be someone unrepentant in making the serious, bold, draconian changes this nation needs now more than ever. He favors a flat tax, social security and other entitlement reforms. Could it be in his golden years, he has drawn from his vast experience and PhD-level intelligence? Is he the perfect candidate? Of course not. Has he flip flopped? Which politician has not? Are his numerous marriages a detriment? Perhaps, but this is ancient news. Is it any worse than some of the company Obama surrounded himself with prior to being elected, like Ayers and Wright? Gingrich's poll numbers remained strong and elevated even after a shameful ABC interview with a former wife. This suggests that voters are looking past former indiscretions, and toward what the candidates will actually do to save this country. Politics, not as usual?

The objective of the left leaning media is to present the American public with a complimentary view of who Obama best matches up against. At the moment, this is obviously Mitt Romney. Unfortunately, many Republicans are joining the witch hunt bandwagon of Gingrich haters. Even my beloved Larry Kudlow was relentless, but well deserved, in Newt bashing concerning his anti-capitalist remarks. But Newt recanted those unconservative beliefs, yet Larry continues to hammer him day and night. Whomever appears on that ballot box for the Republican side this November, I will be supporting. Either Mitt or Newt would make a fine commander in chief. And in the spirit of writing in a contrarian fashion, should the journalistic outlets covering this fascinating campaign be careful what they do NOT wish for? What are they really afraid of? You may be witnessing the former speaker making new living arrangements next January on Pennsylvania Avenue.

Saturday, January 28, 2012

Monday Game Plan

Markets were slightly bifurcated Friday, but both the Nasdaq and S&P 500 registered weekly gains. For the 5th consecutive week now the Nasdaq has outperformed its S&P 500 rival. This week it was a 1.1% move versus a .1%. For the year to date, the Nasdaq has almost doubled the return of the S&P 500 (Nasdaq 8.1% YTD, S&P 500 4.7% YTD). The cries of market correction are growing louder with each passing day. Perhaps that will be the fuel to propel the benchmarks further. Leading stocks played their role in sustaining the rally. This week COH PII AAPL CXO AUY JBHT to name a few. Even better is the action after the generals that did break out. Many retested their previous trigger and held and advanced. They included WFM FFIV EXPE to name a few. Others are consolidating and offer a buy on opportunity as 3 week tight patterns. They include DCI VRSK TSCO. Several earnings reports were spectacular this week. AAPL CAT come to mind. The fact that we could not move higher than where we are off of those numbers is a little disconcerting. A look under the hood of the markets performance was worthwhile. As the S&p 500 was basically UNCH on the week, some groups shined. The global growth theme was on full display this week on CAT report. Others that flew weekly with it were DOV up 7%, JOY 9%. Chemicals benefited from some merger activity between EMN SOA. GRA also moved 5.5% for the week. Metals shone for the week as the Euro retook it 10 week MA, and rose 2.2%, as measured by the FXE. Gold, steel and copper rose smartly on the back of the weaker greenback. The GLD rose 4.25% on the week. JJC rose 4%, but ran dead straight into 40 week resistance. FCX rose 7% on the week reclaiming its 40 week in the process, although it did reverse some Thur-Fri. Steel stocks who demonstrated some muscular action this week were X up 7.5%, STLD 6%, NUE 4%. Curiously not participating were the rails which were down sharply on the week. NSC was lower weekly by 4.5%, KSU 6.5%, CNI 3%. UNP bucked the negative trend and advanced 2%. Any problem identifying the leader of that sector? Did not think so. Defensive sectors were soft this week with the XLU falling back below its 10 week MA Friday, and tobacco losing "smoke", with a disappointing report from MO. Handles forming on their respective cup bases include JEC GD AMP DHR TWI.

Stocks near specific buy points include cup with handles FDX 93.62, TRN 33.02, SWK 73.39, RAX 45.55, ETN 50.30, RS 57.40, CE 50.10, OMC 48.06, EXXI 34.70, PXP 39.47, ENDP 38.02, MHK 66.17. Cup bases are BLL 40.66, ASH 66.46, BIIB 120.76, CBS 29.78. 3 week tight patterns are TSCO 82.08, VRSK 41.11. FTI 54.98 in a flat base, SPR 23.61 in a double bottom with handle pattern, RL 152.10 in a double bottom, and JAZZ 49.24 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 BIDU 135, DO 64.50, WLL 52.25, VMW 93. TIBX retook its 40 week MA Friday.

Stocks that can be bought at 40 week support are KBR 31.10, JPM 36.95, COST 81, ESRX 49, MWV 29.75. Stocks that found 40 week support Friday were CPX TCK ARMH UA NEM.

Stocks that can be shorted at 40 week resistance are TAP 43.20, COG 34, COP 70.90, ANN 25.55. NTRS met 40 week resistance Friday. PH can be shorted with a sell stop of 79.75, as it loses 40 week support. TD TGT KO all lost 40 week support Friday.

Stocks that can be bought at 10 week support are HXL 24.50, ARG 77, CL 90, APC 77.95, FTI 51, V 98, SO 44.50, EAT 25.10, WMT 59, VMW 89.50. Stocks that received 10 week support Friday were KSU CFX PM CL CVX ABT GBX JWN. CPX can be bought with a buy stop of 33.90, as it retakes it 10 week MA. UA retook its 10 week line Friday.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are PM 75.05, OKE 83.80, MCD 97.50. ED lost its 10 week line Friday,

Stocks that can be shorted at 10 week resistance are MA 360, VFC 133, PRGO 97, GNC 28, TGT 51.45. CNI HUM both met 10 week resistance Friday.

Good luck.

The author owns JPM XOM WFM. Short RAI DPZ.

Thursday, January 26, 2012

Friday Game Plan

Markets demonstrated poor action as they opened on highs and continued to drip lower, closing upon the lows. Volume expanded a bit. The Nasdaq and S&P 500 near .5%. A healthy pause is warranted and even healthy. We did manage another breakout today from JBHT which took out a 49.22 cup base buy point in sturdy trade. It hit an all time high in the process. There are many more set ups forming each day. During earnings season I focus on the leaders and how and where they meet support or resistance. Today, HXL found support at its 10 week MA and rallied 7% from there. ARG fell 4%, post earnings but found precise 10 week support. This chemical has been best of breed. See how it reacts tomorrow, it could offer a buying opportunity. UA whose base has become increasingly sloppy and loose, did manage to find support right at its 40 week line after their report. Also we watch how stocks react once they retest their prior trigger points. Today PII did just that and rebounded very slightly from its 63.16 double bottom trigger. FFIV was down after hours right back to its 117.40 cup with handle base buy point. Others of interest to us, as this market is due for a normal pullback are COH 66.64, ADP 55.12, WFM 74.55, TSCO 78.32. Keep an eye on ENDP, as it needs one more day to complete its handle on its cup base. Potential trigger is 38.02. Some nice moves on earnings today were CAT DOV BLL. After hours SBUX was down slightly, while KLAC was up smartly.

Stocks near specific buy points include cup with handles FDX 93.62, TRN 33.02, RAX 45.55, IP 32.68, RS 57.40, CE 50.10, OMC 48.06, PXP 39.47, LOW 27.67, MHK 66.17. Cup bases are BIIB 120.76, CBS 29.78. Double bottom with handle is SPR 23.61 and FTI 54.98 in a flat base pattern.

Stocks that can be bought at 40 week support are GOOG 562, JPM 37, SGY 27, COST 81, JWN 47.05, ITUB 19.50, MWV 29.75. TD ARMH both found 200 day support today.

Stocks that can be shorted as they lose 40 week support and their sell stop spots are PH 79.75, KO 67.45. NTRX CPX both lost 200 day support today.

Stocks that can be shorted at 40 week resistance are NTRS 41.90, COG 34, COP 70.85, FE 43.40. TAP COG DO WLL TIBX all met 40 week resistance today.

Stocks that can be bought at 10 week support are TMK 43, VRSK 38.95, APC 78, EOG 100, EXXI 31, V 98, KLAC 47.50 (earnings beat after close), SO 44.50, DLTR 82, M 32.50, SBH 20.25, CL 90. JWN found 10 week support today. AMZN retook its 10 week MA today.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are CFX 29.75, ABT 54.55, ANN 23.75, LTD 39.80, MCD 97.50. PRGO HUM GNC all surrendered 10 week support today. VFC can be shorted at 10 week resistance at 132.60. COST met 10 week resistance today.

Good luck.

The author owns XOM JPM WFM. Short DPZ RAI. We sold WFC as it fell well below its 29.73 double bottom trigger and is on pace to complete a very bearish outside week. We bought some WFM at 75.44, as it trended back to its 74.55 cup base trigger.

Wednesday, January 25, 2012

Thursday Game Plan

Markets reversed from early losses to post decent gains by the close. The Nasdaq again outperformed its rival S&P 500, posting a 1.1% gain as opposed to a .9% advance. Volume was elevated, indicating big players stepped up their bullish bets. More stocks joined the break out list today with both PII CXO blowing by triggers. CBI rallied another 3% after retesting its 42.02 cup with handle trigger. A bid can be placed under the market for COH as it may retest its 66.64 cup base trigger. The amount of break outs occurring is a hallmark sign of a sound bull market. Concerning the earnings that we discuss each day and their relation to falling to important MAs were PII PX ABT. PII had a wild day, as it found exact 10 week support before rallying 6% and taking out a 63.16 double bottom trigger. PX found precise 10 week support before reversing higher by $2.25. Slight concerns are the rails, whose charts are becoming sloppy and loose, which is considered bearish. They include NSC KSU CNI. Curious action also took place today as both risk on and risk off equities steamed ahead. Commodities rose stoutly as steel, copper and gold were higher, but also recent laggard sectors such as tobacco and utilities. Sure it is just one day, but something to keep a close eye on. Check your earnings calendar.

Stocks near specific trigger points include cup with handles SWK 73.39, HXL 26.17, CE 50.10, EOG 107.37, PXP 39.47, DIS 40.35, MHK 66.17. Cup bases are JBHT 49.12, CAT 112.75, BIIB 120.76, CBS 29.78, EL 60.47. APC 82.57 in a double bottom with handle, RL 152.10 in a double bottom and FTI 54.98 in a flat base.

Stocks that can be bought as they reclaim their 200 day MAs and their buy stop spots are TCK 42.85, WLL 52.40, TIBX 26.40, VMW 92.75, BHP 83.25. FCX retook its 200 day today.

Stocks that can be bought at 200 day support are GOOG 560, MMM 85.45, SOA 18.95, DOV 58.50. Stocks that enjoyed 200 day support today were PH MMM JPM TD MUR APD KO.

Stocks that can be shorted at 200 day resistance are TAP 43.30, COG 68, ANN 25.70. WLL TCK NEM all met 200 day resistance today. NTRS can be shorted with a sell stop to short as it loses it 200 day MA at 42.80.

Stocks that can be bought as they reclaim their 10 week MAs and their buy stop spots are CPX 34, COST 83.15, CL 90.25. UA PM both retook their 10 week MAs today.

Stocks that can be bought at 10 week support are V 98, SO 44.40, GNC 28, M 32.50, SBH 20.25. CFX RAX PRGO SO JWN all enjoyed 10 week support today.

Stocks that can be shorted at 10 week resistance are KSU 68, RAI 40.50, MA 360, DPZ 33, TGT 51.60. BIDU AMZN both met 10 week resistance today.

Good luck.

The author owns JPM WFC XOM. Short DPZ RAI.

Tuesday, January 24, 2012

Wednesday Game Plan

Markets closed once again off sessions lows. The Nasdaq again out performed and closed in the black. It is nearing another big round number in 2800, and has traded remarkably tight the last 4 days. It has traded within a 4 handle range on a closing basis. The S&P 500 has done the same, but even tighter, a 3 handle range on closing basis. Very out of the ordinary, as we are in the heart of earnings season. We had a few more breakouts today, and the more the merrier. Today COH broke out from a 66.64 cup base trigger, and DGX from a 59.49 cup with handle base. Both did so on earnings reports. Others that broke out recently and retested their prior triggers today included CBI which traded to the penny of its 42.02 cup with handle trigger. EXPE retested its 30.52 cup with handle trigger and rallied a dollar on a soft tape. TSS retested its 20.60 flat base buy point and rallied 1.5%. Action from leaders like this add credibility to the health of this recent rally. Of course V followed through another 1.5% today after holding its 98.70 3 weeks tight pattern Monday. A stock which disappointed today was MCD. A great example of why you must demand strong volume on the break out. Took out a 101.69 4 week tight trigger on soft trade Friday. That 1/3 bearish outside day was another red flag. The rails were hit today as KSU sank 8% on earnings, and CNI 5%. Within the transports, tighter action on their respective charts that I like more are FDX TRN. Both are in the process of developing handles on their cup bases. Some bifurcating action to take note of in the alcohol sector include TAP weakening (lost its 40 week today), and BUD DEO accelerating higher. Take note. Handles developing on other cup bases are BUD BLL CE. WFM had a bullish outside day. Had one of the better looking break outs as of late from a 74.55 cup base. AAPL trading 6% higher after hours on a blow out quarter.

Stocks near specific buy points include cup bases ASH 66.46, MRO 35.07, LTD 43.48, CBS 29.78, DHR 55.76, DFS 28.02. Cup with handles are KMT 43.82, EOG 107.37, PXP 39.47, MHK 66.17. Flat bases are FTI 54.98, EL 60.47 and double bottoms are RL 152.10, PII 63.16.

Stocks that can be bought as they retake their 40 week MAs and their buy stop spots are MMM 86.40, ARMH 28, FCX 45. SOA TGT VMW all retook their 40 week MAs today.

Stocks that can be bought at 40 week support are TD 77.50, MUR 58.95, SOA 18.95, COST 81, CL 87.75, ITUB 19.50, Stocks that found 40 week support today were KBR JPM CPX APD TPX KO.

Stocks that can be shorted as they lose their 40 week MAs and their sell stop spots are PH 79.70, NTRS 41.80. TAP MYL both lost their 40 week MAs today. COP met 40 week resistance today.

Stocks that can be bought as they reclaim their 10 week MAs and their buy stop spots are CPX 34, UA 77.15. RAX retook its 10 week today.

Stocks that can be bought at 10 week support are CFX 30, SWI 30.05, ATI 48, APC 77.75, HUM 88.20, GNC 28. FTI PRGO EAT all found 10 week support today.

Stocks that can be shorted at 10 week resistance are BIDU 125, PM 75, TGT 51.60. VFC AMZN ANN all met 10 week resistance today. SO can be shorted with a sell stop of 44.25, as it loses 10 week support.

Good luck.

The author owns WFC JPM XOM. Short DPZ RAI. We were stopped on CL, as our position went 3% against us. We ma reenter as 40 week support held. We covered half of our DPZ short. We will look to reshort that piece soon.

Monday, January 23, 2012

Tuesday Game Plan

Markets closed basically UNCH today in quiet volume. Tomorrow awaits "Turnaround Tuesday", with a few heavyweights reporting. They include AAPL MCD COH. We had another breakout to add to the list in the energy sector. NBL took out a 100.08 cup with handle trigger. Recent breakout V today held its 98.70 3 week tight trigger today to the dime. Remember it is very common for leaders to retest their prior triggers. A successful retest can be construed as bullish. To remind my readers of my favorites, they include CBI 42.02, FFIV 117.40, SCSS 22.29, WFM 74.55, EXPE 30.52, TSS 20.60. XLF displayed some relative strength today, as it closed above its pesky 40 week line for 3 consecutive days. We bought some JPM as it distanced itself a little more from its own 40 week line. TD gained almost 2% after piercing its 40 week to the upside. No we are in full blown earnings season, and remember that MAs are normally where euphoria ends, following an event. Last week FCX TIBX both were reprimanded at their respective 40 week MAs. UA was slapped today at its 10 week MA, following a GS upgrade today. Tomorrow I am watching two. VMW had a sweet report after the close, and approaching its 40 week MA at 92. See how it responds there. KSU was lower after hours on its report and is approaching its 10 week MA. I will buy that at 67.50, its 10 week if it proves stout. Chemicals have been back in vogue and many in the group constructively building their right sides of their cups include CE DOW EMN GRA ASH SIAL ALB. Others building their right sides to be included on watch list are AMP MSCC ENDP CPO DHR DE AGCO. Handles, which need 5 days to be considered valid, are being formed on FDX TRN KMT BLL PX KLAC AET MHK MWV. Monitor those and demand soft volume as the price recedes. I am keeping a close on recent gap ups which bullishly holding them. LULU TSCO FFIV are the ones that interest me the most.

Stocks near specific buy points include cup with handles CNI 80.60, NSC 78.60, EOG 107.37, PXP 39.47, TROW 60.86, VRSN 36.55, DIS 40.35. CBS 29.78 in a cup base, FTI 54.98 in a flat base and JAZZ 49.24 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 FCX 45, ARMH 28, SOA 19.15, TCK 43.15.

Stocks that can be bought at 40 week support are DOV 58.50, KBR 31.20, TAP 43.30, MMM 85, NTRS 42, CPX 31.55, MYL 21, COST 81, CL 87.80, ESRX 49. JOY MMM TPX all enjoyed 40 week support today.

Stocks that can be shorted as they lose 40 week support and their sell stop spots are PH 79.50, JOY 84.70.

Stocks that can be shorted at 40 week resistance are COG 67.50, RRC 60.50, WLL 52.10, FE 43.25, TGT 50.60, VMW 92 (had good reaction after hours, tight stop as always), NEM 60.25. Stocks that met 40 week resistance today were COP TCK SOA TGT NEM.

Stocks that can be bought at 10 week support are KSU 67.50 (poor reaction to earnings after close), AKAM 30, SWI 30.10, ATI 48, VRSK 38.70, APC 77.90, FTI 50.50, ABT 54.75, HUM 88, ORLY 79.10. GBX found 10 week support today.

Stocks that can be shorted at 10 week resistance are RAX 42.80, PM 75.20, ED 59.25, SBH 20.35. SBH BIDU RAX PM RAI ANN all met 10 week resistance today. VFC can be shorted with a 131.50 sell stop as it loses 10 week support. DGX AMZN both surrendered 10 week support today.

Good luck.

The author is long CL XOM JPM WFC. Short DPZ RAI. We covered KO today with a .75 cent loss. Tight stops and the catalyst of being short below the 40 week was no longer valid. We bought JPM as it closed further ahead of its 40 week at 37.54.

Saturday, January 21, 2012

Monday Game Plan

Markets prolonged their weekly winning streak to 3 straight as January remains in good spirits. The Nasdaq continued its relative outperformance compared to the S&P 500, and that streak is at 4 week now. This week it was certainly helped by good earnings reports from the likes of INTC IBM MSFT. GOOG was not so fortunate. I found it reassuring that the Nasdaq was UNCH Friday with GOOG AAPL down 8 and 2% respectively. The Nasdaq is now up 7% YTD, the S&P 500 4.6%. We had a few more leaders break out this week, with FFIV NTGR CBI EXPE taking honors. Many more are building valid trigger points which must be monitored and included on your watchlist. In this environment it is plausible, and not uncommon, for previous triggers to be retested. One to watch, and where I will most likely have bids placed, are WFM 74.55, SCSS 22.29, V 98.70, ADP 55.12, TSCO 78.32, NUAN 27.07, EXPE 30.52, NTGR 38.57. Stocks that reversed from triggers, and to be viewed on the bearish side were BBBY 63.48 double bottom, CFX 32.79 flat base.

Sectors we like to scrutinize are the IYT. It rose 2% on the week, in line with benchmarks, as it tightly and constructively builds the right side of its cup base. UNP had a stellar quarter and advanced 3% on the week, hitting an all time high in the process. JBHT came within .06 of making it 10 straight daily advances Friday. It was downgraded earlier in the week and shrugged it off to finish in the black on the day. Bad news, good action as we all know must be paid attention too. It is closing in on an all time high, which also corresponds to a 49.22 cup base buy point. Looking for TRN to start building a handle here on its cup. The XLF made a smart move back above its 40 week line Thursday, and closed above that line Friday as well. GS advanced 10% on the week, JPM 4%, WFC 3%. JPM retook its own 40 week MA on Friday, and WFC seems to be comfortable living above its recent 29.73 double bottom buy point. MA has a date soon with its 40 week MA near 320. XLE made it 3 straight closes above the 40 week Friday as XOM, which compromises 20% of the ETF, broke away from an 86.77 double bottom with handle formation. Volume was sub par however, but with a behemoth like XOM, it is hard to move the volume needle. FTI continues to be my favorite set up in the sector with a nice flat base. EOG PXP have finished benign looking cup with handles as well. WLL may have seen some capitulation selling Friday as it plunged 10% at one point, then recovered half of the sell off when 10 week support kicked in. COG continues to fumble losing a quarter of its value in the last 2 weeks. 40 week resistance has proven to be a stubborn foe. SMH had a stellar week gaining 6.5%. It is closing in on its prior 3 week tight pattern which finished the second week in May last year with a trigger of 35.09. That same trigger can now be its cup base buy point. INTC, had a wonderful quarter, has not seen a 26 handle since in plunged below that number, and 40 week support way back in the first week of 2008. KLAC was up 7.5%, an has been a leader for some time now in the semi space. It is looking to break through its 51.93 cup base trigger soon. XLNX also had a nice quarter and advanced 8%, on the week. TXN gained 9% on the week and reports on Monday. Tobacco stocks like PM RAI lost 10 week support this week, and utilities faltering seems to indicate a thirst for a higher risk tolerance.

Stocks near specific buy points include cup with handles HXL 26.17, PPG 90.10, EOG 107.37, PXP 39.47, TROW 60.86, JWN 50.94, VRSN 36.55, QCOM 58.07, DIS 40.35. Cup bases are JBHT 49.22, CAT 112.53, GD 76.03, BLL 40.66, IP 33.11, OXY 101.75, KLAC 51.93, BIIB 120.76. FTI 54.98 in a flat base, RL 152.10, in a double bottom, ABT 56.94 in a 3 week tight and JAZZ 49.24 in a cup with high handle pattern.

Stocks that can be bought as they reclaim their 40 week MAs and their buy stop spots are TCK 43.15, SOA 19.20. JPM NTRS TD all retook their 40 week MAs Friday.

Stocks that can be bought at 40 week support are DOV 58.50, KBR 31.25, TAP 43.35, STLD 14.10, MUR 59, MYL 21, COST 80.95, TPX 60.40. Stocks that met 40 week support Friday were DOV JOY PH MMM UA COST.

Stocks that can be shorted as they lose 40 week support and their sell stop spots are JOY 84.75, PH 79.50. TGT lost its 40 week Friday. VMW can be shorted at 92, its 40 week MA. TIBX NEM both met 40 week resistance Friday.

Stocks that can be bought at 10 week support are HXL 24.45, SWI 30.05, DEO 85, ATI 48, X 26.25, ARG 76.35, VRSK 38.60, CXO 97.50, APC 78, EOG 100, NBL 94, ALGN 23.75, GBX 22.80, HUM 88, AMT 59. DGX AMZN both found 10 week support Friday.

Stocks that can be bought as they reclaim their 10 week MAs and their buy stop spots are CPX 34.15. IBM retook its 10 week Friday.

Stocks that can be shorted at 10 week resistance are BIDU 125.50, RAX 42.75, PM 75.10, ED 59.30, ANN 24.20, SBH 20.30. RAI ANN both met 10 week resistance Friday. PRGO can be shorted with a sell stop of 96, as it surrenders 10 week support. RAX SBH both lost 10 week support Friday.

Good luck.

The author owns CL XOM WFC. Short DPZ KO RAI. RAI we shorted at 40.10, as it falters with 10 week support. KO retook its 40 week Friday so we will be keeping that one on a tight leash.

Thursday, January 19, 2012

Friday Game Plan

Markets edged higher once again Thursday as both indexes we follow are now trading comfortably above October highs and their respective 200 day MAs. The Nasdaq outperformed once again today, and volume backed up the move. The Nasdaq is now nearing its own round number of 2800. The S&P 500 has now traded consecutive days above its own big number of 1300. We had another breakout from a leading stock today brought to you by FFIV, which eclipsed a 117.40 cup with handle trigger after an earnings report this morning. Looking how others have fared post breakouts are holding up very well. BEAV is now 6% past its 40.10 cup with handle, WFM 4% since its 74.55 cup base trigger, AAP 4% past its 71.10 flat base trigger and ADP 3% past its 55.12 cup base trigger. CBI added another 2.5% today, one day after taking out a 42.02 cup with handle trigger. SWI has to be given an honorable mention with a 8% move reclaiming its 10 week in the process.

Looking at sectors today showed the XLF in focus as it printed a 14 handle, retaking its 40 week today for the first time since May. JPM NTRS TD all ran right into 40 week resistance today. GS continued its move after earnings Wednesday gaining 3% today. AMP looks better with each passing day, as it recently retook its 40 week 2 weeks ago. XLE has recorded back to back closes above its 40 week MA since August. FTI has set up a nice flat base, XOM took out a double bottom with handle trigger, albeit on very soft trade. COG has turned in a very short period of time from prince to frog. Lost 6% today after hitting 40 week resistance. IYT volume starting to kick back in as it rolls toward par. FDX is doing the same building its right side of its cup in a visually sweet way. UNP had a blowout quarter today, closing up 2%, but on session lows. XLU continues to trade below its 10 week after hitting resistance their today. SO is setting up a nice short trade, with a possible move undercutting its 10 week.

Of course there were many reports after the close. GOOG was sharply lower. ISRG was down as well. MSFT INTC IBM were all higher. The Dow may get a boost if IBM continues higher as it is a trade weighted index and therefore IBM has the biggest impact on that benchmark.

Stocks near specific buy points include cup bases FDX 98.76, R 60.48, CAT 112.53, KMT 45.76, BUD 64.63, BLL 40.66, IP 33.11, OMC 49.65, BIIB 120.76, KMX 34.91. Cup with handles arE TMK 44.93, HXL 26.17, TYC 49.71, EOG 107.37, NBL 100.08, PXP 39.47, JWN 50.94, VRSN 36.55, QCOM 58.07. Double bottoms are RL 152.10, BBBY 63.48, PII 63.16. FTI 54.98 in a flat base buy point.

Stocks that can be bought as they retake their 40 wk MAs and their buy stop spots are ATI 53.75, TD 78.10, TCK 43.25, SOA 19.20, FCX 45.25. JOY MMM TGT TPX all retook their 40 week MAs today.

Stocks that can be bought at 40 week support are DOV 58.50, KBR 31.25, MMM 85.10, STLD 14.15, MUR 59, COST 80.90. TAP COP SGY all found 40 week support today.

TIBX can be shorted at 26, 40 week resistance. JPM NTRS KO all met 40 week resistance today. NEM lost 40 week support today.

Stocks that can be bought as they reclaim their 10 week MAs and their buy stop spots are CPX 34.15. SWI AMZN both retook their 10 week MAs today.

Stocks that can be bought at 10 week support are X 26.25, APC 78, GBX 22.90. DEO RL SBH CL all found 10 week support today.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are RAX 42.50, RAI 40, SO 44.15. BIDU lost its 10 week today.

Stocks that can be shorted at 10 week resistance are PM 75, MA 362, ED 59.15, TGT 51.90. IBM CPX VFC ANN DPZ all met 10 week resistance today.

Good luck.

The author owns CL WFC XOM. Short DPZ KO. We bought XOM as it crosses a 86.77 double bottom with handle buy point. Volume ended very soft. Will keep on a tight leash. Tried to short JOY today at 40 week resistance and ended losing $1. Cut the trade short as the catalyst was gone.

Wednesday, January 18, 2012

Thursday Game Plan

Markets were higher once Wednesday with the Nasdaq outperforming. The Nasdaq was up 1.5% on solid volume. The S&P 500 rose 1.1%, closing above the much hyped 1300 level. Keeping abreast of leading stocks which is essential to gauge authentic market health, saw CBI break out from a 42.02 cup with handle base. KLAC took out a flat base trigger of 49.85 as well. A lot more however broke out on volume that was insufficient, below the 40% minimum average daily volume threshold. They included ORLY DLTR V COH AET AAPL. Volume could confirm in the near term, but I prefer to see it on the day of the break out itself. The Nasdaq was certainly helped by the semis today as the SMH roared ahead by 4%. A well received earnings report by LLTC, set the group blazing ahead with TXN up 8.5%, XLNX 6%, MCHP 5.5%. XLF was 1.5% higher as GS rose 7% on monster volume, as its earnings report was cheered on Wall St. JPM rose almost 5%, and it set for a clash with its 200 day MA just above. XLE retook its 40 week MA today, as apparently the 5th time it attempted to break through was successful. CVX shrugged off a downgrade, EOG NBL both have carved out bullish cup with handle bases, and MUR reclaimed its 200 day MA. Stocks currently building their right sides and that are to be included on watch lists are FDX TRN CAT DOV JEC RS CE MRO SGY CPO AVT DE. X had a bullish outside day today. PM dropped 3.5% today, losing its 10 week MA in the process. Perhaps that is an indication of risk on appetite progressing. Is TIF a value play? I do not usually get involved in these situations, but a triple bottom looks to be developing here. Earnings come tomorrow from heavyweights INTC UNP GOOG IBM.

Stocks near specific buy points include cup with handles QCOM 58.07, CBS 28.72, VRSN 36.55, TROW 60.86, PXP 39.47, NBL 100.08, EOG 107.37, TYC 49.71, HXL 26.17, TMK 44.93. Cup bases are KMT 45.76, BUD 64.63, IP 33.11, OMC 49.65, BIIB 120.76, ASNA 35.35, KMX 34.91. Double bottoms are BBBY 63.48, HLF 57.55. XOM 86.77 in a double bottom with handle base. RAI 42.05 in a flat base buy point.

Stocks that can be bought as they retake their 40 week MAs and their buy stop spots are MMM 85.75, JPM 37.40, TD 78.25, SOA 19.20, WLL 53.10, TPX 60.95, FCX 45. COP MUR SGY all retook their 40 week MAs today.

Stocks that can be bought at 40 week support are BLL 36, COST 81. Stocks that found 40 week support today were KBR TAP COST CPX UA NEM.

Stocks that can be shorted at 40 week resistance are JOY 85.50, NTRS 42.10, COG 68, TGT 50.55, TIBX 26. COG TPX KO FCX all met 40 week resistance today.

Stocks that can be bought at 10 week support are DEO 85, ABT 54.55, GBX 22.90. APC KEG DGX all found 10 week support today. AMZN can be bought with a buy stop above its 10 week MA at 191.50. CNI RL VFC NUS all retook 10 week support today.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are BIDU 125, RAX 42.50, DGX 56.75. PM ED both lost 10 week support today.

Stocks that can be shorted at 10 week resistance are SWI 30, ANN 24.15. AMZN DPZ both met 10 week resistance today.

Good luck.

The author owns WFC CL. Short DPZ KO. We bought WFC this morning as it held its 29.73 double bottom buy point. Bought WFC at 29.81. We bought CL at 90.30 as it retook its 10 week MA.

Tuesday, January 17, 2012

Wednesday Game Plan

Markets advanced Tuesday to start the shortened holiday week. Primarily, bulls would like to see markets open lower and finish higher but the action, today can be construed as benign. Although both the Nasdaq and S&P 500 closed well off their highs they did not sell off into the red, and reverse hard. The common theme of late continued Wednesday with the Nasdaq outperforming the S&P 500, by almost a 2-1 margin. The S&P 500 had trouble with the 1300 level, as it pierced that line but could not hold it by the close. Leading stocks acted healthy today and some even broke out. The best example of the day was WFM, which flew by a 74.55 cup base trigger, and closed up more than 4%. ADP took out a 55.12 cup base as well, but volume was well below average. Others that tried intraday only to reverse or finish beneath the trigger were HLF ASML AME. See how the perform tomorrow. Stocks I am watching that may revisit prior triggers, which is normal, are UNP 106.09 in a cup with handle, and WFC 29.73 in its double bottom. It reported Tuesday. SCSS as well in its 22.29 cup base. XLF met strong 40 wk resistance today as C WFC reports were not well received. BK FRC PNC reversed intraday as well. Perhaps GS earnings tomorrow will give the XLF another attempt to break through 14. Some alcohol/tobacco stocks are nearing important trend lines. BUD PM DEO are all nearing 10 week support, while TAP nears 40 week support. XLE is still meandering between its 10/40 week MAs, and a strong break one way or the other looks inevitable as they tight coiling action gets ready to spring. A buy stop above 71.25, its 40 week MA, seems prudent. IYT was weak all morning while the indexes were at their best levels which I found puzzling. Stocks putting handles on their cup bases and need to be kept attention too are SWK TYC EOG EXXI CBS. ENDP is building its right side here. PM BLL NUAN all had bearish outside days today. Other stocks of mention today were KORS, up almost 6%, and NEM down 4%.

Stocks near specific buy points are cup with handles TMK 44.93, CBI 42.02, RTN 49.51, RHI 29.47, AET 44.84, ALGN 25.68, VRSN 36.55, QCOM 58.07. Cup bases are KMT 45.76, IP 33.11, ASNA 35.35, BYI 42.02. 3 week tight patterns are V 103.55, EAT 27.45, DLTR 84.61, EL 115.36. Double bottoms are CBE 62.92, PXD 99.74, HLF 57.55. Flat bases are RAI 42.05, ORLY 82.27. Double bottom with handles are XOM 86.77, COH 63.74. 4 week tight is MCD 101.69, AAPL 427.85 in a cup with high handle base.

Stocks that can be bought at 40 week support are DOV 58.75, TAP 42.30, BLL 36, STLD 14.35, CE 45.60, DOW 31.15, EMN 43.95, CPX 31.25, AMP 50.50, TROW 56.50, MCHP 35.40, XLNX 32.25, TXN 30.65, MYL 21.05, COST 80.85, AVT 30.50, NEM 60. CNI KBR both found 40 week support today.

Stocks that can be bought as they retake their 40 week MAs and their buy stop spots are SGY 27.60, WLL 52.50, TPX 60.40, FCX 45.15. COST retook its 40 week today.

Stocks that can be shorted at 40 week resistance are TD 78, COG 68, SOA 19, TGT 50.55. JOY MMM NTRS COP MUR KO all met 40 week resistance today.

Stocks that can be bought at 10 week support are NSC 73.50, HXL 24.35, BUD 58.90, PM 75, DEO 85, ATI 47.95, X 26.20, VRSK 38.50, JPM 32.95, CXO 97, APC 78, DO 59.50, PXP 35.10, LAZ 25.05, ABT 54.50, WMT 58.40, PII 59.15. CL can be bought with a buy stop of 90.20 as it reclaims its 10 week MA.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are GOOG 617, RAX 42.50, FTI 49.75, KEG 14.30, NBL 93.60, KLAC 46.80, PRGO 95.60, DGX 56.75, GNC 27.40. FFIV lost its 10 week MA today.

Stocks that can be shorted at 10 week resistance are SWI 30, VFC 133, AMZN 184.25, ANN 24.20, BBBY 60.40, SBH 20.25. RL UA VFC SBH all met 10 week resistance today.

Good luck.

The author is short DPZ KO. We shorted KO at 40 week resistance at 67.70, and DPZ as it surrendered 10 week support at 32.90. We sold DOV HXL right after the open. Will look to revisit.

Saturday, January 14, 2012

Tuesday Game Plan

Markets ended Friday lower, but gain off session lows. For the week both the Nasdaq and S&P 500 edged higher. The Nasdaq gained 1.4% on the week, outperforming the S&P 500s .9% weekly advance. This is the third week in a row that the Nasdaq has outperformed its S&P 500 rival. The Nasdaq itself seems to be living comfortably above its 200 day MA, after regaining that line last week. The Nasdaq closed upon session highs the last 3 days of the week. The S&P 500 is flirting with the 1300 level, which is has not seen since losing its 10 week MA in late July. The tight trading ranges for the benchmarks has to be considered bullish, however a look at the VXX suggests some bumpy rides may lie ahead. The chart looks oversold. Leading stocks which must be closely monitored are faring well, and continue to move north from recent triggers. They include NUAN up 8%, from its 27.07 cup, and CELG ALXN both up 6% from their cup and flat base triggers respectively. Others I am eyeballing are BEAV just above its 40.14 cup with handle, AAP near its 71.10 flat base (ORLY AZO in that group are looking fit), SCSS near its own 22.29 cup base which has been tested in the last 3 days now, and PM hovering at its 77.13 3 week tight trigger. Sectors under scrutiny last week were the finnies. The XLF had a smart 3% gain on the week despite JPMs miss Friday. It met 40 week resistance at 14. The ETF seems to be having problems with the doorman at the 40 week club outside. Inside waiting are IYT SMH XRT XHB IYR dancing away. JPM did manage to finish well off its intraday lows Friday, as did GS (Buddy Carter @matterhornbob, been nailing the GS trade beautifully). Big week for the finnies as earnings kick in for WFC Tuesday (sporting a 29.73 double bottom buy point) that disappointed last quarter. GS reports Wednesday, and more later in the week. The XLE is having its own problems as well trying to get into the 40 week club. Breached that line to the upside Tuesday, but was quickly thrown out. It did receive decent 10 week support Friday. NBL also received strong 10 week support Friday and is in the process of developing another handle in its cup base. The potential trigger would be 100.08. XOM looks good to me as well here and has carved a nice double bottom with handle base. Am keeping a close eye on MUR as well in the group, if it can muster the strength to recapture its 40 week MA above 60. IYT seems to be enjoying life above the 40 week, as volume is slowly starting to kick in. My favorite name in the group currently is JBHT, which was up 6.5% this week, taking out a 46.69 cup with handle buy point. Volume could have been a tad higher, but Thur-Fri displayed benign action. UNP reports Thursday. Other stocks I am watching include HLF, which went from looking negative to positive. Now sprouting a double bottom trigger as it killed two birds with one stone this week, recapturing both the 10/40 MAs. PII could be putting a handle on its double bottom base. ADP, I continue to love the tight trade for the past month. Hovering just below a 55.12 cup base trigger. The 55 level looks like a quadruple top as well. IBM reports this week as well and the weekly chart is exposing distribution. In the very least a 40 week test awaits this week. I predict a breach to the downside. Handles developing in cup bases and to be put on the watch list also include TYC MRO TROW AGCO. The S&P downgrades, in my opinion are a yawner. Of course I could be dead wrong. They looked baked in, the leaks were widely known, and the markets which a few months ago would have imploded took it all in stride. Bullish action indeed. Regardless of what you think of the downgrades perhaps one good thing that could be said was the timing. Late on a Friday, before a 3 day weekend. Any hangover could be easily averted with the extra day.

Stocks near specific buy points include cup bases AME 46.69, KMT 45.76, BLL 40.66, IP 33.11, ADP 55.12, OMC 49.65, BIIB 120.76, ASNA 35.35, KMX 34.91, WFM 74.55. Cup with handles are TMK 44.93, CBI 42.02, RTN 49.61, RAX 45.55, RHI 29.47, AET 44.84, JWN 50.94, VRSN 36.55, QCOM 58.07. 3 week tight patterns are V 103.55, EAT 27.45, DLTR 84.63, EL 115.36. Double bottoms are WFC 29.73, PXD 99.74, HLF 57.55. Flat bases are RAI 42.05, ORLY 82.27. XOM 86.77 in a double bottom with handle, and MCD 101.69, in a 4 week tight base.

Stocks that can be bought as they reclaim their 40 week MAs and their buy stop spots are MUR 60, MMM 86, COST 81, TPX 60.40, FCX 45.15.

Stocks that can be bought at 40 week support are CNI 74.60, TRN 29.80, CBE 55.40, KBR 31.35, TAP 43.45, CE 45.60, DOW 31.20, EMN 43.85, APC 75.75, CPX 31, OXY 94, AMP 50.60,TXN 30.70, XLNX 32.10, MYL 21.10, AVT 30.50, DHR 48.90, NEM 60.05, IYR 57. DOV FLS STLD AMP TXN CL all found 40 week support Friday.

Stocks that can be shorted at 40 week resistance are COG 68, FE 43.10, TGT 50.50, KO 67.55. COG COST both met 40 week resistance Friday. KEG lost 40 week support Friday.

Stocks that can be bought at 10 week support are GOOG 617, ATI 47.75, X 26.10, CXO 97, EOG 100, EXXI 30.55, FTI 50, PXP 35.05, LAZ 25.05, NKE 95.50, AAP 69, WMT 58.30. Stocks that found 10 week support Friday were BIDU RAX DEO APC NBL MCHP DG GNC LTD MELI JWN EL BHP POT. SBH can be bought with a 20.45 buy stop as it reclaims its 10 week MA. COH PII both retook theirs on Friday.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are PH 79.75, KLAC 46.75, PRGO 95.50, DPZ 32.80, LTD 39.75. CNI FFIV COP SGY DGX all surrendered 10 week support Friday.

Stocks that can be shorted at 10 week resistance are SWI 30, RL 146, VFC 133.50, ANN 24.30, BBBY 61, NUS 48. RL UA VFC all met 10 week resistance Friday.

Good luck.

The author owns DOV HXL.

Thursday, January 12, 2012

Friday Game Plan

Markets once again displayed hallmark bullish behavior once again, opening lower and closing upon the highs. It is becoming a pattern recently. The Nasdaq is building the right side of its base, and for the 6th consecutive day it has advanced on volume greater than the daily average. The S&P 500 is shaping its right side as well and is about to challenge the big round number of 1300. Today some leading stocks broke out to add ingredients to the rally recipe. They included PVH, CFX, TSCO, VAR. Others broke out but did not qualify for failing to meet the greater than 40% of daily average volume threshold. They included JBHT PLL RTN PX. Others quickly building the right side of their bases and cup base buy points to be put on a watch list are DHR 55.76, MRO 35.07, OMC 49.65, HON 60.75, GD 76.03, FDX 98.76. The emergence of so many potential setups lends credence to the strong tape we have been enjoying. Stocks putting possible handles on their cup bases include AAPL WFM CBS. Stocks building their right side in a healthy fashion are KMT ETN RS XLNX KMX. COG has transformed itself from a leader to laggard. Today it pieced it 40 week MA in massive volume. it is now in an area where it may catch a bid. LULU, which I am not a big fan of, continues to impress nonetheless. As a strict tape reader, its gap up is holding and if it continues to hold I may be inclined to purchase. 4 days of holding a gap up is normally a signal that higher prices lie ahead. JPM report before the open Friday. The XLF hit 40 week resistance to the penny today, and will move big in one direction of the other according to that report. GS seems to be moving inthe right direction, WFC has a valid double bottom buy point, as does BBT. IYT for the third consecutive day traded with some decent volume. That group is on a strong roll as of late, as many who read my blog know I follow closely. The XLE is in between its 10/40 MAs, and 10 week support lies about a dollar lower. A purchase could be warranted their, or on a break back above the 40 week at 71.30. The tightness of trade in the benchmarks, especially after the big moves we have seen as of late is superb. The only concern is the amount of bullish sentiment. It is becoming a bit concerning. But that is a secondary indicator. As always let the market price and volume action, and that of the markets leading stocks guide your trading decisions.

Stocks near specific buy points include cup with handles TMK 44.93, CBI 42.02, RAX 45.55, GRA 47.99, PXP 39.47, ASML 43.11, ALGN 25.68, JWN 50.94, VRSN 36.55, QCOM 58.07. Cup bases are AME 46.35, SWK 75.77, BA 76.30, BLL 40.66, IP 33.11, FMC 93.10, ADP 55.12, BIIB 120.76, ASNA 35.35. Double bottoms are BBT 27.46, WFC 29.73, PXD 99.74, RL 152.10. Flat bases are FTI 54.98, INTU 55.53. Double bottom with handles are XOM 86.77, and EAT 27.45 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 MUR 60, KBR 31.80, MMM 86, JPM 37.55, TD 78.25, TPX 60.40. DOW TXN NTRS all retook their 40 week MAs today.

Stocks that can be bought at 40 week support are FLS 102, TAP 43.50, STLD 14.35, DOW 31.40, KEG 15, AMP 50.95, MCHP 35.50, TXN 30.70, CL 87.50. DOV RDSA COH all found 40 week support today.

Stocks that can be shorted at 40 week resistance are JOY 85.50, FE 43.05, COST 80.75, TGT 50.50, TIBX 26. Stocks that met 40 week resistance today were MUR SGY COST. KO lost 40 week support today.

Stocks that can be bought at 10 week support are CNI 77, BIDU 127, PM 74.55, RAI 40.05, DEO 84.85, CXO 97, APC 78, NBL 93.50, OII 45.50, SGY 26.10, LAZ 25.10, ABT 54.50, GNC 27.50, ULTA 69.25, WMT 58.25. Stocks that found 10 week support today were FFIV CPX COP DGX DG MELI JWN.

Stocks that can be bought as they retake their 10 week MAs and their buy stop spots are UA 78.25, NEM 65.25. RAX LTD EL HLF all retook their 10 week MAs today.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are ED 58.75, DG 39.75, DPZ 32.80. BBBY PII lost 10 week support today.

Stocks that can be shorted at 10 week resistance are SWI 30, ANN 24.45, NUS 48. UA VFC SBH NUS all met 10 week resistance today.

Good luck.

The author owns DOV HXL.

Wednesday, January 11, 2012

Thursday Game Plan

Markets displayed dull action Wednesday, as the indexes closed just around flat. Volume was below normal. They did show some bullish behavior as benchmarks came back late in the day to finish near highs. Economically sensitive issues are shining recently, with the transports leading the way. The IYT is regaining some daily volume as it builds the right side of its base on a possible move towards par. UNP NSC are both near all time highs, while FDX is up 7% in the last 4 sessions. These three stocks make up more than 30% of the ETF. CAT looks solid as it kisses 100, ETN is up 6% in the last two days as it smashed right through its 200 day MA yesterday. Steel price hikes of 25% have stuck, as these firms have pricing power. RS NUE X are all behaving favorably. Another sector that has been in the news of late has been the defense sector. As the administration slashes defense budgets, the stocks themselves ignore the gloom. RTN is sporting a nice cup with handle, and GD is building a handsome right side of its base after recently bursting through its 40 week MA. Bad news, good action must always be respected. Stocks that can be bought as they retreat to former trigger points include SCSS, which came within pennies of its 22.29 cup base. Watch BEAV to see if it can retrace back near its 40.14 cup with handle it broke away from Tuesday in decent trade. Stocks to keep an eye on as they build their right sides are TRN KMX. Stocks potentially forming handles on their cup bases are WFM TYC. Keep them on a watch list. WSM still has a nice looking inverse head and shoulders pattern. It can be bought as it trades through 40. CELG AMGN have been demonstrating excellent relative strength lately.

Stocks near specific buy points include cup with handles are PX 109.31, JBHT 46.69, UPS 75.02, PLL 58.94, TMK 44.93, CBI 42.02, RTN 49.61, RHI 29.47, PXP 39.47, ASML 43.11, VRSN 36.55. Double bottoms are BBT 27.46, WFC 29.73, BBBY 63.48, PII 63.16. Cup bases are ADP 55.12, BIIB 120.76, CBS 29.78. XOM 87.77 in a double bottom with handle, EAT 27.45 in a cup with high handle, and MCD 101.69 in a 3 week tight pattern.

Stocks that can be bought as they reclaim their 40 week MAs and their buy stop spots are DOW 31.90, JPM 37.60, NTRS 42.55, MUR 60, TXN 30.95, TPX 60.35. EMN retook its 40 week MA today.

Stocks that can be bought at 40 week support are CBE 55.50, FLS 102, JEC 41, BLL 36, EMN 43.95, COG 67.50, COP 71.10, KEG 15, OXY 94.25, AMP 51, MCHP 35.50, XLNX 32.20, CL 87.40, DHR 48.90. Stocks that found 40 week support today were DOV PH CE KO.

Stocks that can be shorted at 40 week resistance are FE 43.10, COST 80.80, TGT 50.55, TIBX 26. ARMH lost its 40 week MA today.

Stocks that can be bought at 10 week support are GOOG 15, RAI 40, ATI 47.50, APC 78, BP 42.95, CPX 33.95, SGY 26.15, V 96.15, ABT 54.55, GNC 27.40, SNPS 27.10. Stocks that found 10 week support today were DEO MELI PII POT.

UA can be bought with a buy stop above 78.25 as it retakes its 10 week MA. Stocks that retook their 10 week MAs today were BDU ALGN BBBY.

Stocks that can be shorted as they lose their 10 week MAs and their sell stop spots are DGX 56.75, ED 58.75, DG 39.80, DLTR 80.10. COH RL VFC EL all lost 10 week support today.

Stocks that can be shorted at 10 week resistance are SWI 30, IBM 186, COH 61.90, VFC 133.85, LTD 40, SBH 20.15, CL 89.75, NUS 48. Stocks that met 10 week resistance today were JOY RAX LTD HLF.

Good luck.

The author owns HXL DOV. Bought HXL at 25.52 as it retreated to its 10 week MA. Bought DOV at 58.98 as it found 40 week support today.

Tuesday, January 10, 2012

Wednesday Game Plan

Markets rose Tuesday as both the Nasdaq and S&P 500 gained close to 1%. Volume grew, in fact on the Nasdaq volume was above average for the fourth consecutive day. The increased volume may be a harbinger to a rally that seems to be gaining steam. I would like to have seen a few more breakouts in solid volume, but the overall increased volume on the benchmarks is encouraging. XLE retook its 40 week MA today, but did close upon its lows. COG, a former leader, sliced its 10 week MA in big volume, and RRC which we flagged yesterday fell further south of its 40 week. XOM has formed a 3 week tight pattern, and KEG and MUR were up 6 and 4.5% respectively. Banks which were secular laggards seem to be finding some upward direction. XLF is nearing a 40 wk showdown test. A move above 14, would be more evidence of a nascent bull in the making. Another group that caught my eye today were the chemicals. GRA has now formed a cup with handle base, EMN is now up 8% in the last 4 sessions, and nearing its 40 week as well. Remember to keep an eye out for previous buy points if we can get some weakness. It is a normal process for equities to return to their triggers before resuming their advances. Some I will be watching in the coming days are V 98.70 (3 week tight), PM 77.13 (3 week tight), CELG 68.35 (cup base), NUAN 27.07 (cup base), AAP 71.10 (flat base). Stocks which right side are looking more robust by the day include FDX R SWK CAT GD HON KEG OIS TROW MYL CPO AVT. A look at leader/laggard syndrome brings attention to CAT JOY. JOY which last earnings report was soft, hit 10 week resistance today, while CAT jumped 3%, sniffing par. IBM had a negative reversal, and SBH DGX both had neagtive outside days.

Stocks near specific buy points include cup with handles JBHT 46.69, UPS 75.02, PLL 58.94, TMK 44.93, CBI 42.02, RTN 49.61, GRA 47.99, RHI 29.47, COP 74.93, EXXI 33.53, VAR 69.87, VRSN 36.55, KO 70.81. Cup bases are ADP 55.12, AET 45.49, BIIB 120.76, ASNA 35.35, WFM 74.55, AAPL 426.80, CBS 29.78. Double bottoms are WFC 29.73, COH 64.08, RL 152.10, PII 63.16. 3 week tight patterns are XOM 86.77, ABT 56.94, MCD 101.69. Cup with high handles are RATE 23.18, EAT 27.45.

Stocks that can be bought as they reclaim their 40 week MAs and their buy stop spots are MMM 86, TXN 30.95, EMN 44.25, JPM 37.60, NTRS 42.70, MUR 60. Stocks that retook their 40 week MAs today were DOV JEC CE SGY HLF DHR.

Stocks that can be bought at 40 week support are CBE 55.25, BLL 36, STLD 14.50, AMP 51, XLNX 32.20, UA 72.25, DHR 49, NEM 60. ARMH found 40 week support today.

Stocks that can be shorted at 40 week resistance are TD 78, FE 43.05, COST 80.75, TGT 50.55, TPX 60.10. PH DOW WLL all met 40 week resistance today.

Stocks that can be bought as they reclaim their 10 week MAs and their buy stop spots are BIDU 127.80. Stocks that retook their 10 week MAs today were BBBY MELI TSCO SNPS BHP POT.

Stocks that can be bought at 10 week support are X 26.10, APC 78, ASML 40.25, KLAC 46.95, NUE 95.25, SO 44.10, GNC 27.35, JWN 48.50, WMT 58.10, WSM 37.80.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are VFC 132.40, DGX 56.70, DG 39.75, DLTR 80, DPZ 32.80. COG QCOR SBH lost 10 week support today.

Stocks that can be shorted at 10 week resistance are MA 363, ANN 24.70, LTD 40, SBH 20.15, CL 90, NUS 48. ALGN TPX NUS JOY BIDU SWI RAX all met 10 week resistance today.

Good luck.

The author is 100% in cash. We had some nice gains in all our longs and broke even in our DPZ short. Wanted to lock in some gains. The market complexion seems to be changing, and I have been focusing my trading on MAs, and I wanted to free up capital to focus now on legitimate break outs from cup with handles, double bottoms, cup bases, 3 week tight patterns, etc.

Monday, January 9, 2012

Tuesday Game Plan

Markets were for the most past flat today to start the week. The Nasdaq finished above its 40 week for the third straight day, and for the second consecutive day found support there. The S&P 500 traded in a tight range quietly. You know the adage, never sell a dull market. Today we had something we have been waiting for now; breakouts. A couple emerged today with NUAN taking out a 27.07 cup base and BEAV doing the same with a 40.14 cup with handle base. We need to see more in the coming days. Previous breakouts in action today were V which retreated back to its 98.70 3 week tight trigger almost exactly then rallied. PM is now hovering just below its own 77.13 3 week tight pattern buy point. Some sectors in action today were the transports. KSU UNP both hit all time highs today. The IYT is demonstrating good action as it becomes more comfortable each day it closes above its 40 week MA. The thin trade is becoming concerning though. The XRT retook its 10 week MA today, as some names in the group are materializing as leaders. They include NKE M COH WFM. The XRT itself is in the process of a base on base pattern with a cup base buy point of 55.02. The 40 week on the XLE continues to act like a "third rail". A buy stop above that line could be put in at 71.35. Favorites in the group are NBL which has a 99.27 cup with handle trigger. CPX is building the right side of its base as is HP. Both should be closely monitored as they bases form. Disturbing action was seen by both AAPL which reversed after hitting an all time high and taking out a 426.80 cup base buy point in the process. GOOG was down 4%, as it approaches its 10 week line, and IBM to me looks shaky, and probably headed to its 40 week. Are we on the cusp of a new bull market? Only the benchmarks themselves can answer that question. We need to see some new leading names step up and break out of valid bases. We know one thing for sure. In new bull markets, old leaders do not assume their old prestige. Case in point for the ones in the recent bear which fell apart. They include DECK WYNN CRM AMZN. Who will be the new leaders to take responsibility for the next potential bull in the making?

Stocks near specific buy points include 3 week tight patterns OKE 88.23, GPC 62.61, MCD 101.69, AMT 61.03. Cup with handles are JBHT 46.69, AME 43.83, HXL 25.52, NBL 99.27, DGX 59.49. Cup bases are VAL 40.70, ADP 55.12, ASNA 35.35, WFM 74.55, CBS 29.78. Double bottoms are CFX 32.10, SPR 22.53, WFC 29.73, COH 64.08. EAT 27.45 in a cup with high handle, and DLTR 84.61 in a flat base.

Stocks that can be bought as they reclaim their 40 week MAs and their buy stop spots are ETN 46.30, MMM 86, STLD 14.70, DOW 31.70, NTRS 42.70, WLL 53.80, DHR 49.15. CAT CBE both retook their 40 week MAs today.

Stocks that can be bought at 40 week support are FDX 84.50, GD 67, EOG 98, NOV 70, TROW 56.25, ARMH 27.95, AVT 30.45, NEM 60. Stocks that received 40 week support today were TRN FLS KMT GD TAP PPG AMP UA KMX.

Stocks that can be shorted as they lose 40 week support and their sell stop spots are PPG 83.50. JEC RRC COST all lost 40 week support today.

Stocks that can be shorted at 40 week resistance are TXN 30.90, FE 43.05, TGT 50.55, HLF 53.50, TPX 60. STLD met 40 week resistance today.

Stocks that can be bought at 10 week support are DOV 56, TMK 42.15, CBI 38.05, JEC 40.25, GOOG 614.50, ATI 47.35, X 26, VRSK 38.05, BP 42.95, SGY 26.10, ABT 54.40, BIIB 112, SO 44.05, LKQX 29.50, JWN 48.50, WMT 58.10. Stocks that received 10 week support today were TCK VFC ED SBH ULTA EL FCX.

Stocks that can be bought as they retake their 10 week MAs and their buy stop spots are BBBY 60.85. Stocks that retook their 10 week MAs today were CNI FFIV TXN QCOR WSM PII.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are ABV 34.20, CE 43.25, DG 39.80, SBH 20.05, CL 89.15, EL 110.20. COG ALGN both lost 10 week support today.

Stocks that can be shorted at 10 week resistance are PH 80, SWI 30, ANN 24.75, LTD 40, MELI 83, TSCO 72, NUS 48. RL SNPS both met 10 week resistance today.

Good luck.

The author owns IYT NUE KEG BLL NUAN. Short DPZ. We bought some NUAN as it took out its 27.07 cup base buy point on strong volume.

Saturday, January 7, 2012

Monday Game Plan

Markets concluded the week Friday quietly. The Nasdaq led the way with a weekly gain of 2.7%, and more importantly found good support its 200 day, after recapturing it Thursday. The S&P 500 finished the week basically UNCH. Strong employment and manufacturing data contributed to the market strength. Leading stocks, a key missing ingredient, were once again subdued. AAP took out its 71.10 flat base buy point Friday (actually took it out Thursday, but the volume confirmation kicked in Friday). Much like RS did but on Wednesday it took out a 51.02 double bottom with handle formation, but volume jumped a day after on Thursday. RS continued its move Friday with a 1.3% advance. Leaders on the downside to take note of were QCOR MA. Both stocks pierced their 50 day MAs in big volume and fell 6 and 8% respectively for the week. We mentioned the bifurcating action of MA and V this week. V refuses to give up par, was basically UNCH on the week, and remains above its most recent 3 week tight trigger of 98.70. Other leaders which are hovering near previous buy points, that is not uncommon, are PM which was downgraded and found support near its 77.13 3 week tight buy point. CELG came very close to its own 65.92 double bottom trigger, before finding support. Retail names were volatile this week on the back of sales results. M ROST were both up more that 7% for the week, clearly outperforming the benchmarks. LULU ran forward by 15%, after a GS conviction list add, and reclaiming its 200 day MA. An interesting scenario playing out in BBBY. After a recent earnings miss, and finding 40 week support it is approaching its 10 week MA. An initial buy through that line with a buy stop of 60.75, then an add on buy from a double bottom buy point of 63.48. The XLE was up 2% on the week, oil and gold were up 3%, and the greenback as measured by the UUP was up as well. Very interesting because they usually go in inverse directions. Of course all will say their is an Iran premuim, but we all know that. Something else bigger might be brewing here. Utilities displayed some disturbing action this week as both SO ED were lower everyday this week. Both remain just above 10 week support here though. IYT is trying valiantly here to remain north of its own 40 week MA. FDX had a good looking day Friday, retaking its 40 week MA. KSU reversed slightly after hitting an all time high Friday. UNP is holding its own near an all time high. Could be developing a cup with high handle base here. Also potentially forming that pattern is RATE. Stocks potentially developing patterns in there cup bases are PLL BA RTN COP EXXI PXP GRA VAR VRSN. XOM may be establishing its own handle in a double bottom base. Handles to be considered valid must be 5 days in duration. Have to admit I like this tight trading action in AKAM here after the gap up 10 sessions ago. Very bullish. AAPL is regaining some of its mojo here too. Nice cup base in the works. Earnings season traditionally kicks off Monday with AA. Markets are slowly, grinding out a wall of mountainous worry in my opinion. Constructive but leaders need to step up and break out. Is that to much to ask for?

Stocks near specific buy points include cup bases VAL 40.70, TYC 50.69, FMC 93.10, ADP 55.12, BIIB 120.76, ASNA 35.35, WFM 74.55, AAPL 426.80, CBS 29.78, NUAN 27.07. Cup with handle bases are JBHT 46.69, NSC 76.59, AME 43.83, CBI 42.02, DGX 59.49. 3 week tight patterns include GPC 62.61, OKE 8.23, MCD 101.69, AMT 61.03. EAT 27.45 in a cup with high handle base, and BBBY 63.48, COH 64.08 in a double bottom bases.

Stocks that can be bough as they reclaim their 40 week MAs and their buy stop spots are CAT 96.50, ETN 46.30, STLD 14.70, WLL 53.95, DOW 31.75, DHR 49.20. FDX TAP both retook their 40 week MAs Friday.

Stocks that can be bought at 40 week support are CNI 74.60, GD 67, RAX 40.45, HON 53.40, PPG 84, COP 71.20, MYL 21.10, KMX 29.70, COST 80.50, NEM 60, DE 80, AGCO 45.95. Stocks that found 40 week support Friday were FLS JEC GD BLL NOV OXY RRC AMP ARM MCHP UA AVT.

Stocks that can be shorted at 40 week resistance are DOV 59, TXN 30.90, TGT 50.55, TIF 70.50, HLF 53.50, TPX 60. CAT ETN STLD WLL all met 40 week resistance Friday.

Stocks that can be shorted as they lose 40 week support and their sell stop spots are RL 135, WSM 36.70. CE SGY surrendered 40 week support Friday.

Stocks that can be bought at 10 week support are JBHT 43.90, TRN 28.50, PLL 54, TMK 42.05, HXL 24.25, BUD 58.05, X 26, BK 19.90, APC 78, BP 42.95, COG 80, CPX 33.75, SGY 26.05, TCK 36.10, NKE 95, ABT 54.35, ALGN 23.15, SO 44.05, JWN 48.50, ORLY 78, WMT 58.10, CPO 51, FCX 38.50. Stocks that found 10 week support Friday were CFX CBE CBI ABV RAI ATI ASML PRGO GNC ULTA.

Stocks that can be bought as they retake 10 week support and their buy stop spots are BBBY 60.75, PII 60. COH retook its 10 week MA Friday.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are CBE 53, ABV 34.25, CE 43.50, OMC 43.05, KLAC 46.50, VFC 133, DG 39.75, DLTR 80, DPZ 32.75, GNC 27, SBH 20, EL 110.20. CNI CL NUS all lost 10 week support Friday.

Stocks that can be shorted at 10 week resistance are PH 80, IBM 186, RL 147, LTD 40, MELI 83, TSCO 72, NUS 48. FFIV TXN SNPS BHP all met 10 week resistance Friday.

Good luck.

The author is long IYT NUE KEG BLL. Short DPZ.

Thursday, January 5, 2012

Friday Game Plan

Markets displayed some muscle Thursday, as benchmarks overcame early weakness to close with modest strength. Classic bullish behavior. The Nasdaq rose almost 1%, on strong volume and reclaimed its 40 week MA. From its intraday low it recovered about 40 handles. The S&P 500 lagged slightly, but posted a bullish outside day. Concerning break outs, they were scarce once again with the exception of RS, which cleared a 51.02 double bottom with handle. It actually broke out yesterday, but volume confirmation was on exhibit today. The banks rallied on potential mortgage modification plans from the White House. But they have been in the bottoming process recently. XLF is sniffing out its 40 week MA near 14. JPM WFC rallied smartly. XLE closed well off session lows and is also readying itself for a 40 week test just above. Put in a buy stop there at 71.75. CLR WLL were both up over 3% today. Aerospace names are heating up, indicating a possible economic expansion. SPR was up over 4%, HXL is sporting a nice cup base, and even BA, shrugged off some disappointing news concerning plane shipments. SMH retook its 40 week today as SIMO advanced 4% to a 3 year high. Retailers had some volatile moves today as stocks such as M DECK ASNA DSW ROST were all up better than 4%. LULU is up more than 10%, in the last two days. Today it reclaimed its 40 week MA, a day after Goldman putting the company on its conviction list. TGT fell today, a day after it sliced through its 200 day MA like a freshly sharpened Ginsu knife. Think someone knew the news yesterday? Hmmm. At the risk of sounding cliche, this has certainly become a stock pickers market. As we saw with the mixed retailers today, even V and MA seem to be bifurcating. Talking individual stocks, POT relative weakness should be noted today in a strong ag sector. 10 week resistance is becoming a factor with POT as well. Stocks that may be putting a handle on their cup bases and warrant inclusion on your watch lists include GRA RHI EXXI VAR KO.

Stocks near specific buy points are cup bases NUAN 27.07, VAL 40.70, CBS 29.78, AAPL 426.80, WFM 74.55, ASNA 35.35, UNH 53.60, BIIB 120.76, MRO 35.07, ADP 55.12, TYC 50.69, IP 31.67, HXL 26.58, R 60.48. Cup with handles are NSC 76.59, AME 43.83, NBL 99.27, AET 43.99, ALGN 25.68, DGX 59.49. 3 week tight is DG 42.20, 4 week tight is DLTR 84.09, and cup with high handle is EAT at 27.45.

Stocks that can be bought as they reclaim their 200 day MAs and their buy stop spots are CAT 96.40, ETN 46.35, MMM 86.25, STLD 14.70, DOW 31.70, NTRS 42.90, WLL 54, DHR 49.15. LULU AGCO both retook their 40 week MAs today.

Stocks that can be bought at 40 week support are RAX 40.30, COP 71.20, EOG 98, OXY 94.90, RRC 60.30, GPN 47.10, ARMH 27.85, MCHP 35.40, MYL 21.10, NEM 60, AGCO 45.75. Stocks that found 40 week support today were FLS JEC GD BLL OMC RRC SGY TROW DE.

Stocks that can be shorted at 40 week resistance are TXN 30.90, FE 43, TIF 70.50, HLF 53.50, TPX 60. CAT STLD both encountered 40 week resistance today.

Stocks that can be bought at 10 week support are CNI 77, JBHT 43.70, JEC 40.15, KBR 27.30, BUD 58, ABV 34.30, RAI 39.85, BK 19.90, BP 43, COG 80, FTI 49.05, MUR 54.25, OII 45, TCK 36.25, NKE 95, SO 44.05, GNC 27.05, EL 110.30, FCX 38.50. Stocks that found 10 week support today were TRN CFX CBE KMT HXL ATI CPX NOV ASML MCHP VFC ED WMT WSM CL CPO AVT. COH can be bought with a buy stop of 62.30, as it reclaims its 10 week MA. ULTA retook its 10 week today.

Stocks that can be shorted at 10 week resistance are PH 80, SWI 29.80, IBM 186, RL 147, ANN 24.90, BBBY 60.60, COST 83.95, LTD 40.10, TSCO 72, SNPS 27.10, PII 59.80. TXN MELI TPX POT all met 10 week resistance today.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are CBI 37.65, KLAC 46.40, DPZ 32.75 (I am short DPZ). RAX BHP both lost 10 week support today.

Good luck.

The author owns IYT NUE KEG BLL. Short DPZ.

Wednesday, January 4, 2012

Thursday Game Plan

Markets digested a bit Wednesday after a nice run to start 2012 yesterday. Both the Nasdaq and S&P 500 closed basically UNCH. You can say the markets are climbing that proverbial wall of worry. The acted stubbornly today refusing to give back any recent gains. The S&P 500 has now closed above the 40 week MA 4 of the 6 past days. The Nasdaq is still hovering between 10 and 40 MAs. No breakouts occurred today but as we have been mentioning plenty, sets up are there. Today LOW broke out of its 26.14 cup with handle base but volume was inconsequential. On the bright side the transports which had bad intraday reversals yesterday, recaptured some of their mojo today. UNP KSU hit all time highs, and the IYT reversed higher after finding solid 40 week support. XLE met 40 week resistance today, but that did not hinder any of the stocks in the sector. COG CXO CLR were all up greater than 5%. You can put in a buy stop on the XLE, which has met 40 week resistance 4 times now since mid October, at 71.75. The more defensive groups were lower again today which bodes well. Alcohol stocks like BUD ABV were hit today. ABV reversed badly after attempting to surpass a 4 week tight buy point Tuesday. Utilities were soft too today. FE is now down 5% in 2012, which we are obviously only two days into, but that is a big 2 day move for a utility. LULU was added to Conviction buy list at GS today and it rallied 9%, which felt a lot like a short covering move. It was stopped right at 40 week resistance, which we like to say is where stock euphoria ends after events like earnings, upgrades, etc. At the expense of sounding like a broken record, I remain cautiously bullish. Stocks breaking out would add to the optimism. Patience is rewarded.

Stocks near specific buy points include cup with handles JBT 46.69, AME 43.83, NBL 99.27, AET 43.99, ALGN 25.68, SLE 19.36. Cup bases are VAL 40.70, ADP 55.12, UNH 53.60, WFM 74.55, AAPL 426.80, CBS 27.98, NUAN 27.07. DG 42.20 in a 3 week tight pattern.

Stocks that can be bought as they retake their 40 week MAs and their buy stop spots are CAT 96.45, ETN 46.45, MMM 86.30, STLD 14.70, TD 78.50, DHR 49.15, AGCO 46. FLS KMT ASNA DE all retook their 40 week MAs today.

Stocks that can be bought at 40 week support are GD 67.05, PPG 84, OXY 94.75, SGY 27.45, GPN 47.10, TROW 56.60, MYL 21.05, KMX 29.75, CPO 50.40, AVT 30.55, NEM 60. Stocks that found 40 week support today were FDX TRN JEC BLL CE OMC NOV RRC SGY TROW ARMH MCHP UA MELI WSM.

Stocks that can be shorted at 40 week resistance are FE 43, TIBX 26, HLF 53.40, TGT 50.45. STLD LULU both met 40 week resistance today.

Stocks that can be shorted as they lose 40 week support and their sell stop spots are SNPS 25.80, PII 53.60. Stocks that lost 40 week support today were DOV TAP AMP XLNX TGT.

Stocks that can be bought at 10 week support are CNI 77, TMK 42, CBI 38, KBR 27.40, BUD 58, RAI 39.75, ATI 47, VRSK 37.75, NTRS 39, APC 78, CPX 33.50, ASML 40.40, ENDP 33.25, BIIB 112, SO 44, ED 59.05, EL 110, NUAN 25. Stocks that found 10 week support today were CBE HXL RAX BK APC ORLY AMT BHP MON. COH can be bought with a buy stop of 62.30, as it reclaims 10 week MA. COG VFC retook their 10 week MAs today.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are CFX 27.80, KLAC 46.45, PRGO 96.70, COST 83.70, ORLY 77.55, SBH 19.85, CL 89.75, NUS 47.90. MA lost 10 week support today after a bearish outside day Tuesday.

Stocks that can be shorted at 10 week resistance are PH 80, TXN 30, RL 147, QCOR 42, ANN 25, BBBY 60.60, LTD 40.15, TSCO 72, ULTA 69, SNPS 27.10, TPX 58.40, POT 44. IBM met 10 week resistance today.

Good luck.

The author owns IYT NUE KEG BLL. Short DPZ. We added BLL today as it continues to garner 40 week support. We shorted DPZ at 33.80. Stop will be the recent high a little more than a dollar higher from here.

Tuesday, January 3, 2012

Wednesday Game Plan

Markets started off 2012 with a bang, however as the cliche goes, it was a stock pickers market Tuesday. Volume advanced smartly from Fridays anemic levels, but was still below average. The Nasdaq outperformed gaining 1.7%, but hitting stiff 40 week resistance. The S&P 500 moved further north of its 40 week MA. Most concerning overall to me today was that break outs remain nonexistent. Three emerged today, with UPS RATE CELG all breaking out but volume rendered them invalid. Some broke out only to finish under their triggers and upon their lows. ABV SCSS were the culprits there. More alarming was some of the reversals in one of the top sectors, the transports. JBHT CNI KSU TRN all basically closed hard upon their lows. Also some real negative tape action came from some strong stocks in the form of bearish outside days. They included MA KLAC RL ALXN DPZ ORLY FFIV AAP MCD VRSK. Recent leader QCOR plunged below 10 week support today losing 5%. The risk on trade seemed to be back in vogue today as good economic data came from both the U.S. and China. X was up 7%, FCX 7.5%, BHP 6%, CAT 4%. Crude rose more than $4 a barrel, and the XLE once again was clubbed by its 40 week MA. It was up a healthy 2.72% however. Perhaps tomorrow it can pierce it to the upside. In the group CVX was up 4%, taking out a quadruple top near 110. MRO sprouted 6%, CLR 5%, EOG 3%, and retaking its 40 week in the process. Banks were up smartly as the XLF nears a 40 week test. JPM rose 5%, BBT WFC 3%. Other positive developments today were defensive groups such as discount retail and utilities were lower on a benign tape. FE SO ED were all lower between 2-3% today. Retail continued its woeful ways as DSW lost 4.5%, WSM 4%, LTD 3%, ANN COH 2%. Stocks building the right side of their bases and warranting inclusion on a watch list include R SWK BUD HON GRA PNC MRO MYL PXP VAR VRSN AAPL. Keep an eye on AET. It needs one more day for its handle to properly form. Potential trigger in its cup with handle base is 43.99

Stocks near specific buy points include cup with handles AME 43.83, CBI 42.02, BA 74.84, RAX 45.55, NBL 99.27, ALGN 25.68, LOW 26.14. Cup base buy points are VAL 40.70, ADP 55.12, PXP 42.06, and RS 51.02 in a double bottom with handle base.

Stocks that can be bought as they retake their 40 week MAs and their buy stop spots are CAT 96.50, CBE 56.25, ETN 46.50, MMM 86.25, STLD 14.65, MUR 60.25, DHR 49.15, DE 80.40. Stocks that retook their 40 week MAs today were FDX JEC GD BLL CE PPG EOG NOV OXY SGY AMP ARMH XLNX.

Stocks that can be bought at 40 week support are GD 67.10, TAP 43.45, BLL 36, PPG 84, NOV 70.10, AMP 51, GPN 47.10, MCHP 33.50, KMX 29.80, ULTA 61, AVT 30.55.

Stocks that can be bought as they reclaim their 10 week MAs and their buy stop spots are MELI 82, POT 44.25. Stocks that retook their 10 week MAs today were CAT IBM BK CXO APC FCX OAS TCK WLL BIIB COST MON.

Stocks that can be bought at 10 week support are RAI 39.75, CXO 96, APC 78, INTC 24.25, NKE 95, COST 84, GNC 27, CL 90. Stocks that found 10 week support today were HXL AMT.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are CFX 27.80, MA 360, KLAC 46.35, DG 39.75, DLTR 80, DPZ 32.60, ORLY 77, NUS 47.75, NUAN 24.75. Stocks that lost 10 week support today were QCOR ANN WSM.

Stocks that can be shorted at 10 week resistance are PH 79.80, SWI 29.70, COG 79.50, LULU 50, TPX 59. Stocks that met 10 week resistance today were PH TXN COH VFC MELI.

Stocks that can be shorted as they lose 40 week support and their sell stop spots are RRC 60, COH 58.75, RL 135, TGT 50.40, PII 53.60. FE lost its 200 day today.

Stocks that can be shorted at 40 week resistance are HLF 53.05. Stocks that met 40 week resistance today were FLS KMT ENDP ANN ASNA HLF.

Good luck.

The author owns IYT NUE KEG.

Sunday, January 1, 2012

Tuesday Game Plan

Markets closed out 2011 with a whimper on Friday, as it did for a large majority of the year. The benchmarks finished the year slightly bifurcated with the Dow rising 5.5% and the Nasdaq retreating 1.8%. The S&P 500 finished UNCH. The Dow's strength can most likely be attributed to the dividends that were coveted this year, as the markets dipped into bear territory in October. The lack of leading stocks breaking out continues to put a drag on market sentiment. There have been a few exceptions as V CELG registered legitimate breakouts. Most however came from defensive groups such as PM ED WMT and was not backed up with strong volume. Many set ups are brewing, but until leaders step up and explode higher a cautious view must be adhered to. The indexes themselves continue to dance with their respective MAs. The Nasdaq has had recent trouble with its 50 day MA, and hit resistance there Friday. The S&P 500 has been frolicking with its 40 week MA. The S&P 500 song has become redundant, as its courting process with the 40 week has been much publicized. There have been some positive developments budding. The emergence of the transports and machinery sectors (both groups are now in the top 3 industry groups) gives some hope. Industries such as these and the fact that steel companies are able to put through some significant metal price increases, suggests economic activity may be sprouting. But as we all know hope is not a viable trading strategy. The IYT is cuddling with its own 40 week MA. UNP, the largest component of the IYT at 12%, has carved a 106.09 cup with handle, and FDX, the second largest component at 9%, had strong earnings and healthy guidance. FDX has been repelled buy its 40 week. In the machinery group AME is perking up and is sporting a 43.83 cup with handle trigger, and PLL has traded tightly and is consolidating its own recent earnings beat. Banks and home builders are showing some muscle as well. Banks modern strength (XLF above 10 week now along with JPM, and WFC above its 40 week) in the face on tough regulations, from Dodd Frank, the Durbin amendment and Basel III has to be respected. Retail sales, manufacturing activity, auto sales, consumer confidence are all on the improve. Lets not kid ourselves however. We still have the Europe overhang, persistently high unemployment, and uncertainty concerning the upcoming November election. Should make for another exciting year. Stocks to put on a watch list as they build potential handles on their right sides are RTN AET KO. CBS is carving out its right side. Short candidates I am following are PRGO DPZ SWI. PRGO has had a bad reversal 12/22 after hitting an all time high and has traded loosely. DPZ has had some big volume down days as it approaches its 10 week MA. A breach of that line should be sold. SWI a recent tech leader has been wounded and is starting to enjoy life below the 10 week MA. A move back to that line should be sold.

Stocks near specific buy points include cup with handles JBHT 46.69, UNP 106.09, UPS 73.76, AME 43.83, PLL 58.30, TMK 44.11, BA 74.84, RAX 45.55, LOW 26.14, SNPS 28.15, SLE 19.36. Cup bases are VAL 40.70, RATE 22.04, FMC 93.10, ADP 55.12, CELG 68.35, SCSS 22.29, NUAN 27.07. Flat bases are CNI 80.54, CPO 53.13. 4 week tight patterns are ABV 36.75, DLTR 84.09 and RS 51.02 in a double bottom with handle pattern.

Stocks that can be bought as they reclaim their 40 week MAs and their buy stop spots are DOV 59.55, JEC 41.30, GD 67.50, BLL 36.25, PPG 84.75, EOG 99.45, OXY 95.15, ARMH 27.95, ASNA 30.45.
OMC retook its 40 week Friday.

Stocks that can be bought at 40 week support are TRN 29.95, SWK 66.10, SPR 19.95, HON 53.45, SAPE 12.35, BBT 24.35, WFC 26.95, CXO 92, APC 75.90, COP 71.40, RRC 60.25, TROW 56.60, MYL 21.10, BBBY 56.75, KMX 29.75, AVT 30.50, QCOM 54. Stocks that found 40 week support Friday were TAP NUE BP GPN TROW NEM.

Stocks that can be shorted at 40 week resistance are KMT 38, UA 72.30, HLF 53.20. GD BLL ARMH all met 40 week resistance Friday.

Stocks that can be shorted as they lose 40 week support and their sell stop spots are RL 134.50, PII 53.75.

Stocks that can be bought at 10 week support are R 51, CFX 27.95, CBE 53.45, FLS 97, JEC 40, RAX 42.05, TYC 46, ATI 46.40, STLD 12.85, JPM 32.45, CLR 65.50, NBL 92.10, OI 44.85, SGY 25.75, KLAC 46.45, NKE 94.60, ALGN 22.70, LKQX 29.10, ORLY 77.10, CL 90, EL 110, DE 75.95. Stocks that received 10 week support Friday were CBI HXL FFIV X CPX INTC LTD. WLL can be bought with a buy top of 47.25, as it reclaims its 10 week MA.

Stocks that can be shorted at 10 week resistance are FDX 84.50, CAT 92.50, PH 80, SWI 29.55, IBM 185.55, COG 79, TXN 30, COH 61.90, ANN 25.10, TSCO 72.25, WYNN 115. Stocks that met 10 week resistance Friday were ANN MELI DHR ETN IBM NOV WLL COH.

Stocks tht can be shorted as they lose their 10 week MAs and their sell stop spots are QCOR 41.20, LTD 39.90, M 31.05. FE COST both lost 10 week support Friday.

Good luck.

The author is long NUE KEG IYT. NUE was purchased right here as it becomes comfortable with life over the 40 week. KEG was bought at 15.30, as it too now has spent at least 4 days closing abve the 40 week MA, and the IYT was bought just below 90, and this trade has been a grinder, as it flirts with support and resistance at that MA.