S&P futures are up 6-8 handles so far this morning amid some green arrows around the world. Most European markets are up about 1% and the Nikkei continues to lead the charge in Asia with a 2.5% gain. In my June 13th CNBC Asia appearance, I shared my view that the 20% pullback in Japan could be buyable. With another higher open looking imminent, could we see another “gap and nap” today?
Yesterday our markets had some nice follow-through (pre-market) to Friday’s close above the 50-day moving average. Many of the high-beta names that held up best during the June corrective phase are leading the charge now, which is why we embrace corrections to help us identify relative strength. Another very promising divergence on this bounce has been leadership from the Russell 2000, which is evidence of healthy risk appetite.
Our trading oscillator that flashed extreme oversold levels of -70ish on June 24th is now reading +50ish, which means we are a bit overbought. We have some resistance at yesterday’s high of 1644, and then the next level is 1652-1654.
High beta tech keeps taking turns.
Amazon (AMZN) held in very well during the corrective phase and then broke out impressively yesterday. The last two technical action areas were $272 then $285ish.
Google (GOOG) also held its 50-day MA during the corrective phase, and we listed it with a potential long action area at $891ish. GOOG still looks good.
Priceline (PCLN) is often a tricky stock that confounds fundamental guys but often generates momentum at new highs.
LinkedIn (LNKD) is working higher and looks good. We listed it on Off the Charts with an action area at $184ish.
Yahoo! (YHOO) is having a tough time here and needs to hold $25.40ish to stay interesting.
Facebook (FB) is trying to act better but perhaps needs to blast through $25-25.08 to get some better movement.
Apple (AAPL) weakened yesterday after some reports of slower iPhone 5 production schedules due to sluggish sales. Most short-term technical traders likely got stopped out around $415ish, and this remains only a B play, if that.
Elon Musk Watch:
Tesla (TSLA) is up more than 3% new highs this morning on news that it is replacing Oracle (ORCL) in the Nasdaq 100. TSLA also will be added to a handful of ETFs. It is a stock we’ve highlighted consistently over the last few months as one of strongest stocks in the market. T3 Live Editor in Chief John Darsie began highlighting it in the low 40s prior to the start of the big move. It hasn’t closed below its 21-day in three months and also absorbed a negative valuation call yesterday. Fundamentals aren’t driving this move, the mechanics of the stock are. The heavily shorted stock, as we have said previously, has the ingredients for a potential move to the $140-160 area.
SolarCity (SCTY) is acting better since it absorbed the IPO lock-up expiration and announced the new projects with Walmart. It seems like at some point this year it could be back at 2013 highs. The $41.50ish level is next technical buy area. I’d rather be long these Musk names than short them.
In Today’s Morning Call with Lindsay Bell we will discuss some oil and retail names.
Oil and refiners have been perking up a bit.
United States Oil Fund (USO) has seen a nice run since the break out of the downtrend resistance at $34 on June 27, clearning some resistance levels on the way up. Next major resistance is $37.17. A break and close above this level could bring in some buyers.
Occidental (OXY) has been hovering around its 50-day for the past two weeks and started to look more compelling at this level after building a base above $89. Next resistance is standing at $93.50, and then the pivot highs of $95.57 above that.
Baker Hughes (BHI) briefly broke below its 200-day but quickly got back above it on June 25, and since then has seen a win streak that pushed it into a key resistance level at $49. A break and close above this level could lead to another leg higher. After that we have $51-53 as the macro breakout level as the stock has been basing at lows since October 2011.
Halliburton (HAL) has started to look better as it’s trading back above all key moving averages. A break above $44.50 could lift it up to retest the current year’s high of $45.75 as this could be its first stop to the upside.
Select retail stocks look good ahead of the retail sales number on Thursday.
TJX Companies (TJX), after holding the prior breakout level of $48.80 during the last pull back, has seen a nice comeback and is already near highs. The $51.83 level marks the next breakout level, and a move through this with some volume could bring trigger a run to new highs.
Gap (GPS) held in well during the last pullback as it put in a higher low at $40. After that, it quickly reclaimed the support of all key moving averages and has been making new highs during the past few sessions. Look for potential continuation above yesterday’s high of $43.83 as the stock looks like it could still go higher.
Target (TGT) deld its 100-day MA during the last pullback, showing some commitment. After that, it quickly got back above all key moving averages and just saw another push higher into some resistance at $71.25 yesterday. The stock closed on highs, signaling the potential for some upside follow-through. Next resistance is standing at $72.77 from the historic highs.
Metals basically held last Friday’s low and are still building lower level bases. The resistance levels for For Gold (GLD) and Silver (SLV) are $121.75 and $19.19, respectively.
Disclosure: Scott Redler is long BAC, FB, TBT, SCTY, KNDI. Short SPY.