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.