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.