Social Media Sector Makes Moves Led By TWTR

Markets are very quiet around the World as most are up or down small, digesting recent gains. US markets held higher yesterday in quiet action but we had lots of nice individual stock movement.

Today S&P futures are up 2-3 handles as yesterday we held Friday’s gains well. Support in the S&P stands at 1806 with a bigger spot at 1796. Pivot resistance stands at 1813 then historic highs in what has been a great market for all time-frames if you have a plan and a process.

In today’s Morning Call we will revisit the Social Media names that have been working well. We outlined the opportunities in these about a week ago. I wonder who get (and close) above $50 first, Twitter (TWTR) or Facebook (FB)?

Twitter (TWTR) gave another entry at $46.35 for a nice break out trade yesterday. The stock gained more than 9% to close near the IPO’s high of $50.09. However, it’s hard to chase after such a big move. A pause and some work above $47 could help it re-set up for the next move higher. We outlined a good action area here around $42 last week.

Facebook (FB) is flagging nicely above its 8-day EMA to digest the gains from last Tuesday’s potent move. The Red Dog Reversal on 11/26 around $44.04 put this stock back on the bullish course. A break and close above yesterday’s high of $49 could add some power for a potential move up to the next level at $52.

Yelp! (YELP) wasn’t ready for a potent breakout yesterday but the stock has been holding higher. It closed above its 8-day EMA for the first time in a while. Look for potential upside follow-through above yesterday’s high of $64.19.

LinkedIn (LNKD) continued to hold higher, showing commitment to its recent gains after a nice rally last week. The $222 level proved to be a nice actionable pivot last week, now some work above $228 could allow the short-term moving averages to play catch-up, which would be constructive for higher prices in the coming sessions.

Groupon (GRPN) had a nice move up to register a 5.83% gain and close back above its 21-day EMA. That was a nice “Day 1.” Look for potential upside follow-through above yesterday’s high of $9.63. Next resistance to watch is $10.85.

Lots of opportunities continue to present themselves in High Beta Tech.

Apple (AAPL) was back in play after two days of rest last week. Nice quick entry was necessary yesterday for a tactical cash flow move. Some digestion above $564ish would be good for a potential move to make new 2013 highs.

Baidu (BIDU) finally gave us a clean move through the $170 resistance level. The stock closed above this breakout level to show some commitment. Look for potential upside follow-through above $173.65. It’s still is a tricky stock so keep your size down.

Google (GOOG) tacked on another 0.77% and put in a new high at $1082 yesterday. It’s a little extended from the short-term moving average. Some consolidation above the 8-day EMA at $1061 would be constructive.

Amazon (AMZN) still hovering around its 8-day EMA but the stock showed some relative weakness yesterday. It needs to hold the upper level support of $381 to keep the intermediate-term guys interested.

Netflix (NFLX) has been drifting out of play for a bit and needs to get above $360-362 with volume for some bulls to come back. A break and close below $352 could bring in some bears whistling short.

Tesla (TSLA) staged a nice Red Dog Reversal yesterday around $136 for a tactical long entry. Now it has a well-developed “bull flag.” If it gets above $141.70 it could be good for an additional entry. If it wants to show some power, a move through $145 could trigger additional momentum. Big resistance comes in around $152-155.

Casinos staged a big move as they were a focus of ours weeks ago. Las Vegas Sands (LVS) and Wynn Resorts (WYNN) made new highs but are extended from all moving averages. MGM Resorts (MGM) played some catch-up and looks good.

Metals have perked up a bit as most thought the June lows were an easy target. The market never makes anything “too easy.” I’m not saying there is a new bull market in Gold (GLD) but it does seem like it might want to bounce back a bit. Next objective for the gold bugs would be to close above $121 rather than get rejected by it. The Gold Miners ETF (GDX) also started turning up and could see a counter-trend move to $22ish.

I am putting together my 2014 thesis, which should be ready in the next couple weeks. If you’d like to look at the 2012 and 2013 articles. Everyone navigate the markets on different time frames. I try to outline thoughts on the markets and stocks then come up with a process to execute if the markets confirm it.

Disclosure: Scott Redler is long AAPL, FB, TSLA, GRPN, BIDU, BAC, GDX. Short SPY.

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