There are mixed markets around the world. Europe is down for a second day as the U.K. unemployment rate came in higher than expected. Most European indices could use a rest after the recent two-week upside move. Asia is mixed as the Nikkei gives back 0.56% but was up 3.1% the session before as that index is still down about 10% YTD. The Shanghai that’s been acting better finished up 1.1% at two-month highs.
S&P futures are down 5-6 handles as we could use a rest. The oscillator went from -75 when the SPX hit 1740 about two weeks ago and then reached +50 yesterday, making this market overbought on an intermediate-term basis. We are also just 10 handles from all-time highs once again.
Let’s see what type of pull-back we could see here. There’s some micro support at 1835 but the real level is 1815-1818. If we don’t hold this area, the bears could try to take the ball back a bit.
We will be getting the Fed minutes today at 2:00 PM ET so keep an eye out for it.
In today’s Morning Call we will follow up on the solar group that had a nice move again yesterday.
SolarCity (SCTY) had a nice breakout to trigger our entry price of $76.40 from the Monday’s Off the Charts newsletter. The stock registered gains of 8% for the day. Holding above that area could be constructive for another move thru $80. It was downgraded to neutral this morning so it might take a day or so to absorb it.
Canadian Solar (CSIQ) also logged a 4.3% gain to build a nice base above its 8-day EMA. The stock closed on highs, signaling potential upside follow-through. It has room for a move back to highs at $43.60, in my opinion.
First Solar (FSLR) was mentioned on our Morning Call yesterday as the stock started to perk up a bit to form a rounding bottom, which can often point to higher prices. It tacked on 7% yesterday and the next pivot to watch is $58.30. Holding above $55.50 could help keep some commitment there.
Sun Power (SPWR) has a nice channel developing here and needs to clear $34.50.
Social Media stocks continue to provide opportunity.
Facebook (FB) continues to hover at highs as buyers stepped in at $66 yesterday to push the stock positive. It closed well off of lows, showing some power. A break above $67.58 would mark a new highs.
Twitter (TWTR) continued to inch higher as it added another 1.44% to its recent rally. It has some resistance at $58.62 from the 21-day EMA, which is now curling down. A break and close above that EMA could add some power to its rally for a potential gap fill at $64.80. It has to deal with a 10 million share lock-up expiration today, so see how it handles it. FB squeezed on its lock-up expiration.
LinkedIn (LNKD) had a nice Red Dog Reversal yesterday at $185.73 to finish up 3.13% on the day. See if it builds to create a pivot low or whether it was just a short-term trade.
Yelp! (YELP) has been building a tight base above its 8-day EMA. The longer it stays above this moving average at $89, the higher the probability it could see some upside momentum above $93.50ish for a move back to highs.
Zynga (ZNGA) had great upside follow-through to log another 5.75% gain yesterday. The stock is approaching our target of $5.50 from Off The Charts. Trim and trail.
High Beta Tech remains somewhat mixed.
Apple (AAPL) hit some resistance in the $550 area after a nice gap fill in the past two weeks, as we talked about that nice inverse cup and handle pattern. I’d like to see a pull-back towards $536-540ish to buy it back as it was extended.
Google (GOOG) is at all-time highs once again. It has been a great tradable vehicle. The last big move was the gap back on 10/18, which helped it regain momentum. It’s been holding above its 50-day moving average since. GOOD is above $1200 but no real set up here now.
Netflix (NFLX) still acts great and held the 8-day EMA yesterday at $428ish. Perhaps we could get another trade above $441 for cash flow if the 8-day continues to hold.
Amazon (AMZN) is not compelling and feels more broken than it has in a while. The $342ish level is some big support, if it breaks that below that it could continue lower.
Priceline (PCLN) is at $1300, extremely impressive but hard to touch here. I just hope people are stubborn short in this name.
There are various other names that continue to perk up.
Gluu Mobile (GLUU) had a nice breakout at $4.95 yesterday to put in a new high at $5.22. The stock closed on highs signaling potential upside follow-through. The next pivot to watch is $5.50.
Green Mountain Coffee (GMCR) is building a tight consolidation range above its 8-day EMA. A break above $122.38 on volume could set it back in motion for higher prices.
Qihoo 360 (QIHU) had a nice breakout at $101.40 yesterday. The Chinese stocks have been in play recently, keep them on the radar for some continuation.
RenRen (RENN) had a nice breakout to gain 11% yesterday. The stock has cleared some intermediate-term resistance level. Holding above $3.60ish would keep its pent up momentum intact.
Metals could use a rest after a nice move the past two weeks. GLD had a nice set up around $122ish and it hit $127.75ish – now see if it holds $126ish for potential continuation. SLV needs to hold $20.78ish to keep its bullish composure.
Last night I was on CNBC World markets talking about the market, Tesla (TSLA) and Apple (AAPL).
Disclosure: Scott Redler is long SPWR, ZNGA, SCTY, LIOX, GLUU, IMMU, RENN, CORN, QIHU, EBAY, YELP.