Markets around the world are taking a bit of a breather as most hit multi-year highs recently. Equities are allowed a day off as it’s been a sizeable move in the last two weeks on top of what has been a very impressive 2013.
S&P futures are down 1-2 handles after our markets yesterday opened up and had a softer close. The index hit a high of 1808 and closed near the lows. Yesterday’s low is 1800 with the 8-day EMA under that at 1792. As long as we hold 1792-1794, I think the Bears will remain quiet.
Leadership has rotated heading into the Thanksgiving holiday.
Banks just had a tremendous run after lagging for a period. Now they could use a rest. Bank of America (BAC) did just go from $14.30ish to almost $16 in two weeks. Citigroup (C) and Goldman Sachs (GS) also started to participate well.
Bio-techs (IBB) have also been on fire, while stocks in the tech sector have been taking turns.
In today’s Morning Call we will look at the social media group that’s been flashing some warnings signs since that “Barron’s Bubble” article a few weeks ago.
Facebook (FB) triggered our action price of $45.70 from the Price Point Sheet to give us a nice short as the stock dropped 3% to go as low as $44 yesterday. The longer it stays below the break down level of $45.70, the higher the probability it could retest the 100-day at $43.11. Below that we have $42.43 as the next pivot to watch.
LinkedIn (LNKD) continues to grind lower. It needs to break above $223 to relieve some pressure. Intermediate support stands at $208. A break below this could lead to a retest of the 200-day at $200.
Yelp! (YELP) has been forming a rounded top pattern. The stock hasn’t found much upside momentum since mid-October as it continues to drip lower. Next real support is all the way down at the 200-day at $48ish.
Twitter (TWTR) broke below the recent pivot low of $39.40 to put in a new low at $38.80. Use this as the new point of reference to trade around.
Zynga (ZNGA) actually holds in very well and still looks like it could see higher prices. If it can get above $4.55ish and it could gain additional momentum for a move back to the $5 area.
High beta tech continues to provide opportunities.
Google (GOOG) had a nice gap and go yesterday to put in a new high at $1053.19. It continues to be the best in breed. Some digestion after a new high would be healthy. Holding above the 8-day EMA at $1032 could keep its up momentum intact.
Apple (AAPL) looks poised to clear the downtrend resistance that has been in control since the outside day 10/29. A break and close above yesterday’s high of $525.87 on good volume could lead to additional momentum. The next pivot to watch is $530.
Netflix (NFLX) has been inching higher but doesn’t really give a clear entry point. The stock has room to $355.42 until it runs into some resistance from the prior pivot high.
Amazon (AMZN) tacked on another 1.16% to put in a new high at $377.79 yesterday. Some digestion after three up days would be constructive. Upper level support stands at $373. Below that we have the 8-day EMA at $368.
Tesla (TSLA) is still heavy and has changed its composure many times since breaking the 100-day around $153. Now it’s trying to hold $117.80ish. A trade and close below that and it could see $104-107.
3D printing stocks still need some time.
3-D Systems (DDD) is trying to potentially build a new floor above $68ish.
Voxeljet (VJET) is trying to stabilize and looks like it might want to bounce from this oversold area. If it can get above $39.44ish perhaps it could see $44-45 for a trade.
Metals are trying to bounce a bit this morning. Yesterday Gold (GLD) did stage a small reversal. If the gold bugs want to start talking a bit they would need to first reclaim GLD $121.70, which is resistance.
Try to keep it simple through the holiday week. Life’s too short to be stressed out by the market as we head into one of my favorite holidays. Remember to take the Turkey out of the freezer and put it in the fridge if you haven’t already.
Disclosure: Scott Redler is long AAPL, ZNGA, BAC, C. Short SPY.