Monday, October 25, 2010

SPX Forms Potential Shooting Star...Yellow Alert...

The SPX closed up +2.54 or +0.21% on Monday forming a potential shooting star at horizontal resistance…
(click image to enlarge)

Selectivity again ruled stocks as stocks like SOHU, NTES, IPI, SINA, AMD, RIMM and PCLN moved higher as weak stocks moved lower.  The COMPQ gained +0.46% about double the SPX.  Advancers again led decliners 1.5 to 1 on the NYSE...

Exchange      NYSE    NASDAQ
Advancers     1,796       1,616
Decliners       1,201       1,050
(click image to enlarge)
Index     Direction   Confirmation
VIX            Up              No – SPX
SOX          Up              Yes – COMPQ 

Leading stocks on Monday included NTES, IPI, SINA, AMD, TSL, DOW, CRM, DECK, MOS, RVBD, INFA, FFIV, CREE, PCLN, VECO, MHS, FCX, ATI, BYI, TIE, FLS, ESI, VMW, LVS, LXK, V, NETL, WLT, POT, AMX, USD, CLF, NDAQ, AIV, SNDK, SLB, MA, UNP, GMCR, CAM, CAT

Losing stocks included CRUS, STI, BAC, ATW, ZION, NTRI, PNC, ICE, CSTR, PCP

RIMM was a breakout entry on Monday and NFLX is a bull flag setup.  Earnings season continues this week.  VECO gapped down in after hours trading.

Charts to Watch - Bearish Setups
(click image to enlarge)
SPX
Resistance: 1,182, 1,190, 2,000
Support: 1,170, 1,148, 1,130

Enter bullish trades with a bounce off support and a break above the high of the low day or a break out of horizontal resistance.

Monday is a Yellow Alert. A break below the low of the high day can be a potential exit for short term bullish trades and a potential entry for short term bearish trades.

Entry for a bearish signal can be a close below of the low of the high day for a counter trend trade or the same entry on a down trending stock.

The short term 3 day trend is neutral.
The three-month trend is neutral.
The twelve-month trend is up.

Continue to focus on and trade setups on the charts of the stocks you watch. Trade with the trend of the chart and follow your rules.

AAPL +1.37 – potential shooting star
QCOM +0.15 – doji does not confirm hammer
GOOG +3.97 –potential shooting star
BIDU +2.47 – potential hanging man following positive earnings gap on Friday

NDX 100 stocks stronger than the NDX include RIMM, URBN, ALTR, LRCX, VRTX, PCLN, BIDU, KLAC, AKAM, NIHD, FLEX, BIIB, SPLS, STLD and ADSK.

Stocks weaker than the NDX: FWLT, STX, LINTA, NWSA, CTSH, WYNN, FISV, HSIC, SHLD, MSFT, MRVL, INFY, FAST, ORCL and CA.

Stocks to Watch on Tuesday
Holding Above 30 DMA
HLF, PCLN, AGU, MCD, LVS, CMG, FCX, SINA, VOD, AIV, CAKE, CAM, DE, DHR, DOW, UNP, URE, WLT, A, HAS, IPI, JEC, LXK, CAT, ICE, FLS, ATW, SLB, ACN, AMX, GES, NDAQ, UAL, USD, MA, HSY, FDX, NTRI, AMD, V, ATI, BA, DECK, GR, UCO, WHR, CF, GS, SPG, HANS, MOS, SWN, VECO, CSTR, RVBD, TBT, WFMI, NYX, ZION, FAS, NFLX, NTES, PCP, PNC, BYI, INFA, MHS, NETL, SKX
Moving Above 30 DMA = 3
CLF, CRM, FFIV
Moving Below 30 DMA = 2
CHL, STI
Staying Below 30 DMA
SNDK, SWK, CREE, AKS, TIE, FAZ, POT, RMBS, TSL, ESI, BAC, GME, CRUS, X, TLT, DLR, VMW, GMCR, UNG

Intermediate Term Market Trend: Neutral
Short Term Market Trend: Neutral

5 comments:

Val said...

Dave, first thank-you for all of your insights, I have had NTES on my watchlist and this morning watched as it traded up and yet I could not find any news. Earnings Nov 9th. I see that SOHO had good earnings today and since they compete could be part of the reason

Anonymous said...

Dave, After the Shooting Star on the $SPX, you list the short term trend as NEUTRAL, even with a HH/HL and a higher close. Is it neutral because it is at resistance(1190)? And where does the 1190 resistance come from? Thanks, your blog is so helpful! JD

Dave Johnson said...

JD,

The SPX failed to close above short term resistance so price is still in its short term trading range. A close above resistance changes the short term trend to up.

Cheers,

Dave

Unknown said...

Dave; Are you referring to diagonal resistance? Monday was a higher close and a higher high than recent candles. I know it is a potential shooting star. Trying to think like the Master! JM

davelore said...

Dave, I realize technical analysis is subject. I'm curious why you see a bearish setup on VMW. I saw a MACD divergence and entered a bullish trade on 10/21?