Musk Watch: TSLA, SCTY

World markets maintained a positive tone over the weekend as the equity rally remains underway. The Shanghai Composite that double bottomed over the Summer led Asia overnight making multi-week highs. Japan also continues to act well as it’s provided multiple opportunities long during 2013. Europe is also holding steady after some spots made five-year highs. There is lots to like on all time-frames.

The last week-and-a-half was like a lesson in Technical Analysis.

The Rally was re-born with a Red Dog Reversal on 10/9 when we reclaimed 1655.
10/10: Textbook “gap and go” with potency that closed above the Descending Channel that formed in late September.
10/11: Showed commitment above that Descending Channel.
10/14: Market absorbed the gap down despite no debt deal, held that low on 10/15 and showed resilience.
10/16: Power resumed as we cleared the two-day flag and took out SPX 1700.
10/17: New 2013 highs with a close above 172.
10/18: Healthy follow-through.

Here we are today with the S&P a bit overbought and somewhat flat futures this morning.
We have support at 1742 then 1736, with prior highs at 1729. Pivot resistance is 1745. Some of our thoughts were included in CNBC’s blog this weekend.

As we enter this week we have a new earnings calendar to focus on as well as some economic numbers that have been delayed due to the shutdown.

In tech we saw a lot of great action last week as Google (GOOG) impressed on Thursday and ignited a nice high-beta move on Friday.

The VTF did see me put on some Google calls which did turn out to be a nice trade. GOOG is up another seven dollars this morning and will need some time to set up again.

Baidu (BIDU) also ignited into 2013 highs and has a new pivot at $166.39.

Amazon (AMZN) ignited through 2013 highs of $323 and extended well. Your new pivot is $331.89.

Apple (AAPL) has been steady to the upside since our buy price on Off the Charts around $493 and is now opening above $510. It looks good to potentially continue higher and earnings aren’t until next Tuesday.

Facebook (FB) has made a huge move, and there have been a lot of calculated set-ups along the way. The last one was buyable at $51.60ish with a big move Friday. Your new inside range has support at $53.60 and resistance at $54.82, I think it needs some time now.

LinkedIn (LNKD) woke up again. The stock needs to hold $244.50 and with time could be back on the move above $252.30.

Yahoo! (YHOO) is trying to consolidate above $32.30ish and with time could get going again above $34.00-$34.40.

Chinese internet names have been great. Look at the basket of them: SFUN, QIHU, SINA, SOHU, YOKU – we’ve listed them in Off the Charts several times of late, including SFUN last week.

Bank earnings have been underwhelming but with the sector beaten down a bit it has been enough to spark a bounce.

JP Morgan (JPM) is in the news with a huge settlement in the works – let’s see how it affects the banks today. As long as JPM holds $53.25 I don’t think this group will get too much pressure.

Some ag stock look like they are setting up for lower-level catch-up trades.

Mosaic (MOS) was featured in our Off The Charts newsletter last night as a breakout candidate if it could get above $47.10. After that the next obstacle would be the 100-day at $49. A break and close above this could lead to a gap fill at $52.

Monsanto (MON) is another compelling setup. The stock has regained the support of all key moving averages. It has an intermediate wedge pattern that could resolve to the upside at $107.10.

PotashCorp (POT) also reclaimed its 8- and 21-day recently. The stock entered the gap from July 30th on September 10th after a nice three-day move up. It’s been seeing nice consolidation since. A break and close above $33.20 could open the door for a gap fill at $37.

CF Industries (CF) had a nice push up on Friday to gain 2.7%. The stock is hovering around the short-term resistance at $217. A break above this could bring in some buyers.

Musk watch

SolarCity (SCTY) had a big time move last week. I would say now it needs some rest, but it’s already up more than 4% this morning. The recent pivot high is $59.90. The last buy price was $48.20ish, I think now you have to wait for a more calculated set-up rather than chase.

Tesla (TSLA) reclaimed some moving averages and is getting tight again. It did lag a little bit last week. As long as it holds $181ish I think traders could look for another move above $186-187.

Metals are trying to stabilize a bit but aren’t much to get excited about.

Gold (GLD) needs to hold $126.60 to stay interesting. Perhaps there could be another cash flow trade long if it can take out $127.86.

Keep looking for good set ups, and stay with the trends and price action instead of the noise.

Disclosure: Scott Redler is long AAPL, AMAT, XHB, ZNGA, MEET, GLUU

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About Scott Redler 367 Articles

Scott Redler is the Chief Strategic Officer of T3 Live. He develops all trading strategies for the service and acts as the face of T3 Live. Mr. Redler focuses on thorough preparation and discipline as a trader.

Mr. Redler has been trading equities for more than 10 years and has more recently received widespread recognition from the financial community for his insightful, pragmatic approach. He began his career as a broker and venture capitalist where he was able to facilitate relationships that led him into trading. Beginning his trading career at Broadway Trading in 1999, Mr. Redler moved on with Marc Sperling to Sperling Enterprises, LLC after establishing himself as one of the best young traders in the firm. As a manager at Sperling Enterprises, continued to trade actively while working closely with all traders in the firm to dramatically increase performance.

Mr. Redler has participated in more than 30 triathlons and one IronMan, exhibiting a work ethic that also defines his trading. His vast knowledge and meticulous attention to detail has led to regular appearances on CNBC, Fox Business, Bloomberg, and he is a regular contributor to Minyanville and Forbes’ Intelligent Investing blog. He has been quoted in the Wall Street Journal and Investor's Business Daily, among other publications.

Scott received a B.B.A. in Marketing/Finance from the State University of New York at Albany, graduating Magna Cum Laude from Albany's School of Business.

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