World markets are mixed this morning. Europe has been dancing around the flat-line as there is confusion on who will fund Ukraine when the dust settles over there. If Russia doesn’t back them, who bails them out? Asia is having a negative session as reports show that China’s banks are reducing lending to property developers. The Shanghai Composite is now at seven-week lows down 1.7% after showing some signs of relative strength the past few weeks. The Nikkei is trying to create a 2014 bottom down but is still down 9% ion the year.
US markets are still trying to digest the recent bungee cord snap-back from February 5th’s Red Dog Reversal at the SPX 1740 area. It didn’t have enough power to take out 1850ish last week and this week should be interesting. Can we digest above SPX 1824ish or could we retrace a bit lower to the 50-day at 1814? Pivot resistance for major adjustments is 1850ish.
Biotech stocks were very strong Friday and tech continues to outperform. The banks remain relatively weaker and need to be watched. This year has been very choppy so far with some bouts of volatility. Stock selection has been key and that should continue.
High beta tech continues to be mixed but present opportunities.
Apple (AAPL) gave us a quick move from $517 up to $550ish where it failed at its intermediate descending channel creating a topping tail into $550. This signaled to reduce risk, or perhaps initiate a cute short. Four days later we closed at $525ish Friday. It got downgraded this morning, to stay any good it needs to reverse today and go green. Friday’s low was $524.60, so it needs to get back above that. The gap from 2/7 is $517.38. To stay relevant, it should at least hold that. Holding above that would be better for a higher low.
Google (GOOG) still acts well. As long as it stays above its 8-day, you could stay with it. Recent support is 1196ish – that is your “upper-level stop.”
Priceline (PCLN) is also a strong name that could continue to ride its 8-day, otherwise complexion could change slightly.
Amazon (AMZN) has been weak since earnings and rallies have been sold. If it breaks below $342-344 with volume, it could be on its way to $326ish.
Baidu (BIDU) had a nice move above its descending channel at $157ish and now it’s trying to go sideways above $170ish. See if it can continue to do so. It still needs to deal with earnings this week. Pivot resistance is $177ish.
Netflix (NFLX) struck a deal with Comcast over the weekend to improve the quality of its streaming content. There is lots of talk about the deal and the precedent it sets with internet service providers. The stock has been moving well since 2013 and most of 2014. The stock has been above the 8-day since the gap from 1/23. It’s below that this morning, if the sellers want to keep some control they could keep it red and not let it get back above $430ish.
Social media is also mixed.
Facebook (FB) continues to be a hot topic of conversation as everyone continues to give their two cents about the takeover of WhatsApp. I think it’s best to let the action of the stock speak for itself. As long as it stays above the 8-day which it’s been riding since the gap on 1/30, it’s hard not to like it. Use $67ish to trade against. If it were to break and close below this, perhaps it could correct a bit.
Yelp! (YELP) still acts well. It needs to clear and stay above $92.50ish to get some attention again. Stops could be placed at $88ish.
LinkedIn (LNKD) had a decent two day bounce from the $195 Red Dog Reversal that stalled at $198ish. It needs to hold $189.ish to stay in the game. Take a look there today.
Zynga (ZNGA) might have come back to $5 for options expiration. I’d like to see it hold $4.80ish to consolidate the recent strength.
Tesla (TSLA) had a solid report. The stock traded through $206 after-hours, reaching $222ish then retesting that pivot area. You could trade versus $206ish, but it needs to digest above it to keep shorts on their toes. Resistance stands at $215ish.
Biotechs continued to move very well on Friday.
Regeneron (REGN) made news highs above $335ish.
Biogen (BIIB) triggered for some above $336.
A few smaller bios like Acadia (ACAD), Idera (IDRA) and Inovio (INO) all were on the move as well.
Other names on our radar also took off Friday.
Workday (WDAY) had a nice move above $98.55, keep in mind that earnings are Wednesday.
Under Armour (UA) staged a Red Dog Reversal at $105.17 that was pinpointed in the Virtual Trading Floor chat, then blasted to new highs above $110.
Blackberry (BBRY) is setting up a nice pattern for higher prices. News this morning that Ford is switching from Microsoft to Blackberry operating system in vehicles is showing at least that BBRY is not a “dead company walking.” It needs to clear and close above $10.10 to really get going.
SolarCity (SCTY) has earnings out after the close on Tuesday. Pivot resistance for this stock is $80.
Metals continue to grind higher in 2014 as they continue to make their way through resistance levels.
GLD is opening above the recent pivot. It needs to stay above $128.07 to keep today’s momentum intact.
SLV played catch-up, giving some clues with a nice close on 2/14. It hasn’t really looked back since. It looks above $21.13 pre-market, holding above that would keep it in play for today.
Disclosure: Scott Redler is long BBRY, AAPL, MSFT, YELP, ZNGA, IDRA, BAC. Short FB.