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.