Musk Watch: SCTY, TSLA

World markets continue to be mixed as Europe is down small, but the Nikkei bounces back hard up 1.96%. The Shanghai tried to be green but couldn’t hold on as this remains a weaker area.

Yesterday our markets tried to get going and had a decent day but as far as the indices go it wasn’t “powerful.” However, lots of individual names did very well, which has been the theme so far.

S&P futures are off 2-3 handles with some support at 1834 then 1828. The 2014 support pivot stands at 1823 with resistance at 1840ish then 1849.

Today is the 5th day of the year and some will say the action through today is a strong predictor of the year as a whole. I don’t think it’s that important. We are still working off some of the excess of 2013 and the last 10 day ramp up into New Years. We have Fed minutes later and a pretty big jobs number Friday.

The place to be is in “tactical names” as some are doing well and some are still trying to get some footing.

Banks opened up yesterday after a great four-day run and retraced a bit lower, which is very normal action. My rule for active trades is you buy Day #1, add Day #2 then trim and trail Day #3-4-5. (at least that is a system I generally try to follow).

Bank of America (BAC) was upgraded by Jeffries this morning with a $19 target. It held $16.45 yesterday and recent highs are $16.79.

Citigroup (C ) was upgraded yesterday as it was extended. Today it was initiated with a hold. It has support at $53.78 and a more important pivot is $53.43ish.

Goldman Sachs (GS) was downgraded yesterday mid-day and led the profit taking. The 8-day was defended, see if that continues at $177.50. The 21-day is $174.30.

Morgan Stanley (MS) has not been very frisky from a trading perspective. It needs to hold $31 to be relevant.

JP Morgan (JPM) continues to be the center of negative headlines and it had the worst looking candle yesterday. See if it holds the 8-day or whether it sees the 21-day at $57.61

High Beta Tech remains mixed with two-way action.

Google (GOOG) continues to be best in breed here. It triggered again above $1121 and closed at $1138ish. Use that as your resistance pivot if it wants to go again.

Amazon (AMZN) has no compelling pattern here. You can’t be too bearish unless it loses the 21-day at $391ish with a close below.

Apple (AAPL) has been very lethargic. It didn’t have follow through to the prior day’s reversal but it did hold above $533.50 – that is your support pivot. Resistance comes in at $545ish. It hasn’t been acting great since the China Mobile news.

Priceline (PCLN) did give you a nice Day #2 after Monday’s reversal at $1131. Now see if it holds above $1142ish and builds.

Baidu (BIDU) is still building well. Above $181-$82 and perhaps we could get a new momentum trade.

Netflix (NFLX) has been one of the weakest of 2014. Look at the candle on 12/27 – that’s when it lost its “go-to status.” It then hovered on the low end for five sessions showing no snap-back. Now it’s headed to the 100day. Perhaps today we could get a cute bounce around $337 pivot low from yesterday or $327 (100-day).

Some software/cloud/virtualization names are acting better.

VMware (VMW) had a very nice breakout above $90ish and now needs to hold $93ish and then it could see another move higher with some digestion.

Red Hat (RHT) also had a nice trade above $56.50ish. It still has room to go higher.

Salesforce (CRM) has a nice set up and needs to get above $55.20-$55.40 for some type of momentum move.

Social media names are mixed.

Twitter (TWTR) opened up and was weak all day making some think the wedge-type formation could resolve lower. It had a big bearish engulfing day and now was downgraded today. It hasn’t closed below the 21-day EMA since it broke out above $42 so see how it handles the $59.94ish area, then recent lows at $58.57.

Facebook (FB) still acts well but stalled at prior highs. If it stays above $57ish for a few sessions then perhaps it could try again.

Zynga (ZNGA) is popping back on the radar. It needs to stay above $4ish to stay relevant. Above $4.22 and perhaps it could get back on the move to $4.55.

LinkedIn (LNKD) had a nice reversal yesterday after a downgrade and closed well. We now have $198.50 as a support pivot for 2014 – see if it can continue above $210.

There are some set-ups that look okay for a quick look.

Noddles & Company (NDLS) is a laggard name that woke up a bit lately. Above $37.70ish perhaps it could get back to $40.

Nuance (NUAN) holds in okay and needs to get above $15.40-$15.50 for better action.

Gogo (GOGO) had a nice move yesterday that puts it back on the radar for higher prices. Above $26.40 it could go again.

Valero (VLO) broke out and could bring attention to the some others.

Tesoro (TSO) has a very tight pattern intermediate-term pattern. A break and close above $58.50 could have it looking better.

Musk watch:

Solar City (SCTY) is trying to hold its gap from the GS upgrade. Now you could trade it versus $62.50ish. The longer it stays above that the better for a chance at higher prices.

Tesla (TSLA) has been very quiet and getting tight. Above $150.40 and perhaps it could clear a descending channel and get back on track higher. It needs to stay above $146ish.

Metals bounce hit some resistance.

Gold (GLD) needs to stay above $117.15 in order to have hopes to build for higher prices. I’m avoiding it.

Lots of new issues from last year continue to act well. I will come out with a watch-list of them soon: WUBA, CUDA, TCS are a few.

Disclosure: Scott Redler is long BAC, C, TSO, NDLS, TSLA, GOGO, FB, VMW, RHT, BLDP, NUAN, ZNGA, DRYS. Short SPY.

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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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