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.