World markets were pretty quiet overnight as they need to digest a big September move. Many are buzzing about Russia PM Putin’s Op-ed in the NY Times, but it doesn’t appear to be having any effect on stocks.
US futures are basically flat as some consolidation/digestion would be nice to create some better set-ups. It seems like the “pain trade” has started for some, as lots are under exposed or never covered shorts as the lower pivot resolved above 1641 or recently when SPX reclaimed its 50-day around 1664. We now have a gap around 1674ish. The longer we stay above that, the higher the probability that we could see new 2013’s highs sooner rather than later. The Nasdaq is already at 2013 highs and Russell is a stone’s throw away.
There has been lots of nice movement in various sectors and various momentum names. In today’s Morning Call we will go over some biotech stocks again.
Celgene (CELG) has been holding above its 8-day moving average for the last two weeks or so as it’s on the path to retest the all-time high of $149.92. It briefly broke above this pivot high on Tuesday and digested well yesterday. The long bottoming tail formation yesterday shows signs of potential upside momentum above $149.55.
Amgen (AMGN) had a nice gap up on August 26th, which was then followed by a controlled pull-back as the stock has since continued to find support along its 8-day moving average. A move through $113.28 to clear the recent short-term resistance could set it back in motion for higher prices.
Alexion (ALXN) is another nice break out candidate in this group, as it has a tight set-up to potentially see some upside momentum above yesterday’s high of $144.79. The first resistance in the upside stands at $118.40.
Biogen (BIIB) triggered above the action buy price of $232 from Tuesday’s Off The Charts newsletter to gain 3.31%. The stock has room for a move back to highs at $242.64.
Acadia (ACAD) is also looking good as it holds above the recent breakout of $21.50ish.
There continues to be some nice set-ups in the food and beverage stocks.
Chipotle (CMG) and Starbux (SBUX) are the winners in this food and beverage group, as CMG had some nice upside follow-through to put in a new high of $423.49 yesterday. SBUX also soared to a new high at $75.50. It’s prudent to take some profits after a three-day move, but overall these charts look good and could see continuation after some digestion.
Green Mountain Coffee (GMCR) has seen healthy digestion in the past two weeks as it continues to find support along the 21-day. A break above $86.75 could set it back in motion for some additional gains.
SodaStream (SODA) had a nice break out at $63.10 to get above the short-term downtrend resistance that was in control for two weeks or so. The stock is flagging nicely and looks poised to potentially make a move higher above $66.
Dunkin Donuts (DNKN) was one of my “three amigos” of 2012 to potentially “put in the drawer” and it looks good potentially for a trade back to highs. It’s reclaimed all moving averages and if it holds above $43.50 it could see new 2013 highs at some point.
Tech continues to give mixed opportunities.
AAPL fell sharply, 5.5%, yesterday to test its 200-day after a disappointing product event. At this point it’s hard to press short further, so just use yesterday’s low of $464.81 as the new point of reference to trade around. Overall, AAPL has lost its short-term momentum and needs time to repair. Carl Icahn said he bought more yesterday so it might try to bounce, but overall his public comments are seeing diminishing returns. See how it handles its gap resistance around $473ish for a trade and potential composure.
LinkedIn (LNKD) triggered through our action buy price of $252.55 in the Price Point Sheet to see a new high yesterday. The stock closed on highs signaling potential upside follow-through above yesterday’s high of $257.56.
Facebook (FB) made a new all-time high at $45.09 after triggering our listed action buy price of $44.26. It is up again pre-market this morning close to $46 after being upgraded by MS and feels like it wants the $50s. The stock has been acting well and has rewarded investors of all-time frames.
3-D Systems (DDD) is hugging its 8-day and building a tight upper level range. A break above $53.14 could set it back in motion to see new highs. Keep this on your radar.
Google (GOOG) still acts well and is hard to “get in” now but continues to bounce back.
Amazon (AMZN) has seen an impressive move above the $285 descending channel. It could use a small rest. The longer it stays above $295ish, the better.
Metals continue lower
This group had a nice tradable move off the June 28th lows but ran out of gas in August. Traders have been avoiding them for the past few weeks as they broke all upper momentum levels of support of interest.
Gold (GLD): If you are short a spot to cover could be closer to $128.53 (or this down open). Perhaps that could also be where it stabilizes.
For Silver (SLV) perhaps a spot to cover would be close to $21ish, which could also maybe even be a spot for a cute bounce.
Disclosure: Scott Redler is long FB, BAC, XOM, BBRY calls. Short LVS.
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