Twelve years ago today life changed for so many. Truly take the time today to think about that day. Remember the chaos and the agony, talk to people about it, think about where you were and, more importantly, listen to others as they reflect. Terrorism doesn’t discriminate. Appreciate life.
World markets are basically flat as digestion of the multi-day rally would make some sense. There have been lot of powerful moves that started in late August have seen some follow through and are now a bit overbought. Last night the President said military action is on hold as his office will support Russia’s idea of the UN collecting all the chemical weapons that are stashed throughout Syria.. We’ll see how that goes. I’m sure some of the headlines will now turn towards the Fed and potential tapering next week.
US futures are basically flat as we’ve seen a 50 handle move off the 100-day MA area (1627), which also coincided with the trend line that has been established since last November. We did hit 1684 area yesterday, penetrating further than most bears would have liked.
Let’s see what type of digestion we get. There are lots of gaps from yesterday to trade against. SPY’s gap support is $168.24, and holding above this for a few sessions will keep some shorts trapped and keep the tape very quick. The 50-day stands at 166.92. This would be a spot the bulls probably want to defend to maintain the hope of new 2013 highs.
Over the past few days we have seen big moves from leaders and laggards alike. In today’s Morning Call we will talk about some stocks that could set-up for additional opportunities.
Baidu (BIDU) had nice continuation yesterday after it regained the support of its 8-day moving average on Monday. The stock has a solid upper level base. It finished up almost 3% and looks poised to have some upside follow-through above yesterday’s high of $140.90. This trade is in motion.
Facebook (FB) had two days of rest to digest the impressive gains of the Friday’s break out. Traders now have yesterday’s low of $43.23 as the new level of interest to trade against. After two days of rest, it could resume some momentum. Holding above $42.30 would be very constructive.
LinkedIn (LNKD) continues in a social media dual for supremacy with FB while both remain best in breed. LNKD has been digesting its recent break out well as the stock continued to hold above its 8-day. A move through $254.61 could lead to another leg higher.
Chipotle (CMG) had a nice break out of the weekly range at $412.70 yesterday and soared 1.64% to mark a new high at $419. The stock closed on highs, signaling potential upside follow-through. It has room for a move up to $425-427 area
Zillow (Z) has been building a nice upper level base above $94. The stock gained 2.75% yesterday and closed on highs. With all key moving averages curling up, a move through yesterday’s high of $98.97 on good volume could give the stock some power to take out the current all-time high of $103.
Some ags are on the move for cash flow.
PotashCorp (POT) had a nice three-day move as it tacked on another 3.6% yesterday. We mentioned about this ags play when it broke above the intermediate resistance of $31.35. It has entered the gap from July 30th and stalled right in front of the 50-day. It could see some rest after a big move. Holding above $31.70ish would be constructive for a gap-fill rally.
Mosaic (MOS) also provided a nice two-day trade when it broke above the 21-day at $43 on Monday. The stock has entered the big gap from July 30th, and has a lot of room left. Some work above the break out level of $43.70 would be healthy.
Apple (AAPL) disappointed with its product event yesterday, announcing only small improvements to its iPhone. The new (barely) cheaper phone also did little to move the needle. Hope still remained the the company would announce a deal with China Mobile in its event in China overnight, but it was just basically a re-hash of the US event.
After a very clean move from the earnings gap of $445ish to about $510. When it broke $503.50 yesterday I got stopped out as the trade changed, and it is down around $20 this morning after getting two big downgrades. There is some support at $486 then $472ish. Big-time support stands at $462ish (200-day MA).
Tesla (TSLA) had nice action yesterday as the stock gained 3.5% after finding support at the 21-day MA on Monday. It’s nice to see some buying interest resume in this stock. A break above yesterday’s high of $167.50 could open the door for a move back to highs at $173.70.
3-D Systems (DDD) is hovering around its 8-day and closed back above it yesterday to build a nice upper level base. A break and close above yesterday’s high of $53.40 could set it back in motion for higher prices.
Google (GOOG) could use a rest. Holding above $880ish, though, could set it up for higher prices.
Amazon (AMZN) has had a spirited move since breaking it descending trend line. Holding above $295ish keeps it in the game for further upside, but there is no defined set-up yet.
Metals pulled back while the markets rallied as expectations for action in Syria wane while QE tapering fears re-emerge. Some will say that the trend line held from the June 28 lows, but the trade slowed and we’ve been avoiding in the last week or so. For GLD, $131.11 is yesterday’s low to trade against. For SLV $21.99 is a spot to use as a pivot.
Disclosure: Scott Redler is long BAC, POT, FB, BBRY calls.