Here is my watchlist for the upcoming week. I have included a market posture as well. I indicate stocks and sectors that are either beginning to go intermediate term (IT) bullish/bearish in parenthesis, or are a little tapped out short term (in other words, I'm watching but not likely playing). I indicate stocks that are IT bullish/bearish in a normal font. And I indicate stocks or sectors I'm most interested in because of where they are short term (ST) in a bold font. The bolded stocks are closer to buy signals, or they are extremely compelling because they could be high probability setups soon. The regular font stocks are worth keeping an eye on, and the stocks in parenthesis are something I will watch, but probably not play.
Dow: IT Bullish and ST Bullish. The Dow tested a resistance area of 13,100-13,150 on Friday. It may try to re-test the 13,100 area on Monday based on a Bull Flag bounce on the intra-day charts. But watch closely, because we are getting close to a potential short-term reversal in both price and time.
SPX: IT Bullish and ST Bullish. The SPX tested the low end of a resistance zone between 1,420-1,435 on Friday. It may have some room to push a little further into the zone Monday based on a Bull Flag bounce intra-day. But watch closely, because we are getting close to a potential short-term reversal in both price and time.
Naz: IT Bullish and ST Bullish. The Naz may be reacting to the round number of 2,500, since it hit 2,499.14 on Friday and pulled back. If the Naz has a more extreme move in it short-term, it may try to go and test resistance around 2,535-2,550. But like the Dow and the SPX, it could be getting close to a short-term reversal Monday.
We have a light week of Economic Reports, and Big Name Earnings are starting to taper off. There are still a lot of earnings to report this week, but we are shaping up to have more of a "Technical" move type of week rather than a "News" move type of week. It looks like the markets could still move up a bit on Monday, perhaps even Tuesday. If the indexes do roll over, look for Tech, Financials, Retail, and a few other areas to lead the pullback. At the same time, Energy and Commodity stocks may continue their bounce. In fact, a move up in Energy and Commodities could very well be the short-term catalyst for a short-term drop in Tech, Retail, and Financials. The Naz may roll over tomorrow on YHOO selling after MSFT pulled its offer to buy the company over the weekend. It looks like a lot of turmoil in Yahoo land as the CEO tries to convince shareholders the company is worth more without MSFT. Guess what, the shareholders are gonna let him know what they think of the value of the company pretty quick. Look for YHOO to lose billions of dollars in market cap tomorrow, and look for the CEO to eventually lose his job.....
BULLISH SECTORS/GROUPS AND STOCKS:
Energy: MRO, NE, RIG, OXY, NBR, PDE, HES, SWN, CHK, DVN, SLB, HAL, WFT, SII
Coal: ACI, CNX
Oil Shipping: DRYS, EXM, ATW
Metals/Mining: ANR (but earnings are Monday), WLT
Chemicals: AGU, CF
(Steel: AKS, NUE, X, CLF, MTL, RIO)
(Copper: FCX, PCU)
(Railroads: CSX, UNP, BNI)
Materials/Construction/Manufacturing: PH, CAT, BUCY, JOYG, (CMI, FLR, EMR, ITT, DOV)
Tech: ADBE, ADSK, RIMM, (AAPL, GOOG, VMW, BIDU), also some Chips NVDA, (KLAC, SNDK, CY)
Some Financials: GS, (AXP, MA, MER, ICE, NYX, LNC, ALL, AOC)
Some Retail: KSS, COH, (COST, WMT)
Some Aerospace/Defense: (BA, GR)
Note: BG, FLS, (IVGN, CHRW, GILD)
BEARISH SECTORS/GROUPS AND STOCKS:
Engineering/Construction: CBI, MDR, VMC
Some Services: DST
(Some Cyclicals: WHR, MMM)
Note: CL, ENR, MBT, ROK, MRK, OI, ZMH, AGN, ISRG (perfect Bear Flag so far)
Also note: Gold stocks have earnings this week, so lay off the sector for now. In addition, some Energy stocks look poised for lower highs: ESV, NOV, MUR. One last note on Chemical stocks, POT looks very poised to make a lower high, and MOS looks like it's in a Bear Flag. So watch those Chemical stocks, they may be headed towards consolidation sooner than any other Commodity or Energy stocks.
The market looks like it might run out of gas on Monday. Don't look for much more in the short-term swing from Tech, Retail, and Financials. Energy and Commodity stocks may bump up another day or two, but don't be shy about locking down partial profits in those areas late Monday or early Tuesday. Energy and Commodity stocks may continue up for several days, and may even be the catalyst for the market to pull back a bit short-term. By far, the strongest bouncers right now are in Energy, Coal, and especially Energy Shipping (Water Transportation).
I am still holding part of PH, all of CAT, and a half position in GS and IBM. But those areas could get liquidated Monday. I am loaded in Energy/Coal (CHK, CNX, DVN, RIG, SLB, and SWN) and putting orders in on Energy Shipping (EXM). I have already locked some big partial profits in Energy/Coal, so I'm in great shape even if they roll over a little sooner rather than later. I am also doing a little play on AGU (Chemicals), but it is very likely to be only a 1-2 day play.
As always, we shall see what tomorrow brings.....
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Dwight,
ReplyDeleteI've been watching LUFK AND SII that have nice flags going but seem to be consolidating. I'm not sure on the latter chart if that was a bounce on Friday?
Gary
I don't know if it's my computer, but I don't see a watchlist. It seems like it's not refreshing properly and updating the latest posts. It's 1:56 central time and the only comment I am seeing is Gary's posted at 6:37am. Can someone tell me if it's my computer?
ReplyDeleteJeremy,
ReplyDeleteIt's not your computer, I can't see it either. He probably just hasn't posted it yet.
Joe
ok, thanks.
ReplyDeleteHey Dwight,
ReplyDeleteI am putting together my own watchlist and a lot of the oil service stocks and some energy stocks are coming off of new lower lows. At what point do you see laying off these for calls and seeing if they are going through some sort of sector rotation besides the obvious lower highs.
Dwight,
ReplyDeleteWhat do you think about entering AMZN Monday morning if it starts to bounce. I see strong support at the $77 area (horizontal and diag.) It may be making a higher low before going back above $80 and breaking out of the inverse H&S.
Gary: LUFK and SII are ok, but other stuff is on the move in those areas already. So you may do a little in those two stocks, but pick up something that's moving as well.
ReplyDeleteSteve: I noted my high risk Energy and Chemical stocks under the Bearish section tonight.
Jeremy: AMZN looks a little sloppy right now, so if you cherry pick it, start with a very small position and make sure it holds the 75-77 area.
The first thing I did when I looked at Dwight's stock list tonight was wonder which list my stocks on?
ReplyDeleteI have calls on rio and aapl and bull puts on drys and eeks - pot...
Do any of you know what the $trin is? I listen to shadow trader and he mentions this alot. I wonder how and why do you use it?
There does seem to be a lot of good setups as of right now, but time will tell!! Denise
Denise, trin is advancing issues with advancing volume as opposed to declining issues with declining volume so as the trin lowers more volume is going into stocks going up and as it rises more volume going into declining stocks. I believe parady is like 1.0.
ReplyDeleteDenise: look to lock down your AAPL calls. RIO, POT, and DRYS are probably ok, with POT potentially being at risk in the next several days. DRYS is the strongest, by far. Steve gave a good answer on TRIN. It's ADV/DECL divided by ADV VOL/DECL VOL. I used to use it a bit years ago, not so much now. I can demo using the TRIN or the TRINQ on the intra-day charts if you ask me in VC.
ReplyDeleteDwight,
ReplyDeleteAfter YHOO gaps down tomorrow. Will it be too late to get some puts in, either on the stock or the Q's? Seems that the fund managers won't be able to unload them fast enough.
Gary