Here Are A Few Stocks That Could Attract Momentum Players
What Tuesday’s Action Tells
You
It was gap up and no pullback for the
(
SPY |
Quote |
Chart |
News |
PowerRating),
trading to 116 on the opening bar and closing at 116.20. The intraday high
was
116.40. The indices ended the day with the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) at 1157,
+1.0%,
and the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) 10,715, +0.8%. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) and
(
QQQ |
Quote |
Chart |
News |
PowerRating) were +1.3% and +1.4%.
(
INTC |
Quote |
Chart |
News |
PowerRating) and
(
MSFT |
Quote |
Chart |
News |
PowerRating) had good days
and
were two of the top six stocks in the Dow, with INTC +2.2% and MSFT
+1.5%.
There was enough news to keep the
presidential
day bias streak going (see yesterday’s commentary). There were two economic
reports on the January capacity utilization and industrial production, along
with some DEAL news which helped the XBD to a +2.3% day, leading the major
sectors. The
(
SMH |
Quote |
Chart |
News |
PowerRating) followed at +1.6%. Basic industry stocks like
(
CAT |
Quote |
Chart |
News |
PowerRating)
and
(
AA |
Quote |
Chart |
News |
PowerRating) gapped up along with the
(
DE |
Quote |
Chart |
News |
PowerRating) earnings report and finished
strong.
It wasn’t, however, a big volume day, with NYSE
volume at 1.35 billion, but the volume ratio and breadth were very positive
at 79 and +1520. The index proxy volume, on the other hand, was extremely light,
with the SPY trading 35% less than its average volume and the QQQs -21%. Also,
the
(
DIA |
Quote |
Chart |
News |
PowerRating)s had the lightest volume, trading 59% less than their average
volume. Despite the +1.6% gain, the SMH also traded 35% of its average volume.
On a price basis, all of the major sectors closed green.
| size=2> | Wednesday
2/11 |
Thursday
2/12 |
Friday
2/13 |
Monday
2/16 |
Tuesday
2/17 |
| color=#0000ff>Index | |||||
| color=#0000ff>SPX | |||||
| color=#0000ff>High |
1158.89
|
1157.76 | 1156.88 | H | 1158.98 |
| color=#0000ff>Low |
1142.33
|
1151.44 | 1143.23 | 1145.81 | |
| color=#0000ff>Close |
1157.66
|
1152.11 | 1145.81 | O | 1156.99 |
| color=#0000ff>% |
+1.1
|
-0.5 | -0.6 | +1.0 | |
| color=#0000ff>Range |
16.6
|
6.3 | 13.6 | L | 13.2 |
| color=#0000ff>% Range |
92
|
11 | 19 | 85 | |
| color=#0000ff>INDU |
10738
|
10694 | 10628 | I | 10715 |
| color=#0000ff>% |
+1.2
|
-0.4 | -0.6 | +0.8 | |
| color=#0000ff>Nasdaq |
2090
|
2074 | 2054 | D | 2080 |
| color=#0000ff>% |
+0.7
|
-0.8 | -1.0 | +1.3 | |
| color=#0000ff>QQQ |
37.58
|
37.26 | 36.98 | A | 37.45 |
| color=#0000ff>% |
+1.1
|
-0.8 | -0.7 | +1.4 | |
| color=#0000ff>NYSE |
|
Y | |||
| color=#0000ff>T. VOL |
1.63
|
1.46 | 1.31 | 1.35 | |
| color=#0000ff>U. VOL |
1.26
|
623 | 417 | 1.06 | |
| color=#0000ff>D. VOL |
355
|
806 | 866 | 285 | |
| color=#0000ff>VR |
78
|
43 | 32 | 79 | |
| color=#0000ff>4 MA |
69
|
59 | 54 | 65 | |
| color=#0000ff>5 RSI |
77
|
65 | 53 | 66 | |
| color=#0000ff>ADV |
2265
|
1419 | 1248 | 2425 | |
| color=#0000ff>DEC |
1021
|
1844 | 2033 | 905 | |
| color=#0000ff>A-D |
+1244
|
-425 | -785 | +1520 | |
| color=#0000ff>4 MA |
+1165
|
+561 | +268 | +388 | |
| color=#0000ff>SECTORS |
|
||||
| color=#0000ff>SMH |
+1.7
|
-1.2 | -1.3 | +1.6 | |
| color=#0000ff>BKX |
+1.2
|
-0.3 | -0.2 | +0.6 | |
| color=#0000ff>XBD |
+3.9
|
-0.5 | -0.5 | +2.3 | |
| color=#0000ff>RTH |
+0.8
|
-.01 | -0.9 | +1.1 | |
| color=#0000ff>CYC |
+1.5
|
-0.4 | -0.9 | +0.9 | |
| color=#0000ff>PPH |
+0.7
|
-0.7 | -0.4 | +0.4 | |
| color=#0000ff>OIH |
+1.0
|
+1.4 | -0.6 | +1.1 | |
| color=#0000ff>BBH |
+1.2
|
-.05 | -1.1 | +0.2 | |
| color=#0000ff>TLT |
+0.8
|
-0.5 | +0.3 | -.07 | |
| color=#0000ff>XAU |
+2.9
|
-1.7 | -0.4 | +3.0 |
^next^
For Active
Traders
Because of the gap opening in the index
proxies,
the actual trading range yesterday didn’t have good travel range. However,
the
SMHs made a contra move after the gap opening to 42.25 from the 41.84 close.
This was a gap pullback setup that retraced to 41.95 vs. the .50 retracement
to
41.40 which is 41.92. The SMH traded up to 42.61 after entry, as price
resumed
the direction of the open (90% – 60% rule). I have included that chart in
today’s commentary.
Today’s
Action
The SPX has been banging away at this 1150 –
1160
zone for 18 days now, with eight of those days hitting an intraday high
between
1150 – 1160. Net net, the more price hits a resistance level, the weaker
that
level becomes. The SPX price action for the past three days has been
contained
within the wide-range bar of Wednesday, Feb. 11, and there has been no close
yet
below the low of the high day.
The early futures are small green at 7:30 a.m.
ET, but if they make a run at the SPX today to break it out of this 18-day range,
then I would look to stocks that have similar patterns, most of them within
5.0% of their 52-week highs that have been ranging or have made small retracements
from the previous highs. The hedge funds will game them in front of any institutional
buyers, and they all show patterns the momentum players like to play. Some examples
of these stocks are
(
EBAY |
Quote |
Chart |
News |
PowerRating),
(
QCOM |
Quote |
Chart |
News |
PowerRating),
(
BMET |
Quote |
Chart |
News |
PowerRating),
(
CDWC |
Quote |
Chart |
News |
PowerRating),
(
SNPS |
Quote |
Chart |
News |
PowerRating)
and in the semis,
(
MXIM |
Quote |
Chart |
News |
PowerRating) and
(
MRVL |
Quote |
Chart |
News |
PowerRating), in addition to
(
VTSS |
Quote |
Chart |
News |
PowerRating) for
the low-price traders.
Other stocks that have had strong moves that have
retracement setups at the 20-day EMA, or close to it, are
(
DGX |
Quote |
Chart |
News |
PowerRating),
(
INFY |
Quote |
Chart |
News |
PowerRating)
and
(
FAST |
Quote |
Chart |
News |
PowerRating). Another stock,
(
HOTT |
Quote |
Chart |
News |
PowerRating), after a pullback from 32.30, had
a change-in-direction wide-range bar yesterday on an increase in volume that
reversed four highs in five closes. It closed at 29.42 vs. its 20-day EMA of
29.52 and 50-day EMA of 29.26. You can expand this setup list by also adding
(
ADBE |
Quote |
Chart |
News |
PowerRating),
(
AESI |
Quote |
Chart |
News |
PowerRating),
(
SEPR |
Quote |
Chart |
News |
PowerRating) and
(
PNRA |
Quote |
Chart |
News |
PowerRating). If you play low-priced
junk stocks with many of the hedge funds, you can look at
(
JDSU |
Quote |
Chart |
News |
PowerRating) and
(
SAPE |
Quote |
Chart |
News |
PowerRating).
This focus list is just stocks that have interesting
technical setups and should be watched closely for continuation long opportunities
if the market goes green. You can identify the train, but you don’t get on until
it leaves, i.e., they are just numbers, not recommendations that they are going
up. They are stocks that are in position
to be gamed or attract momentum players, and you are just going to go with them
for the day, so keep them on your scroll list. I do this extensively in my institutional
service, but I prefer not to at other levels unless I know the audience. There
are too many novice traders out there that follow different stock touts and
get burned. Learn how to fish yourself, and look at the names I give you at
times and see what the setup looks like and you will gain the insight needed
to do your own selections.
Have a good trading day,
Kevin Haggerty
P.S. You can finally learn
what traders have been asking me to teach them for years—