World markets are mixed as most of them need to digest the last two big rally days. Europe is hugging the flat line after making five-and-a-half year highs and Asian markets are either up or down small.
S&P futures are down 2-4 handles after a 35 point move from Monday’s lows, so some digestion makes sense. Support comes in at 1840ish and some digestion above this level would make it easy for the bulls. Below that level then 1832ish becomes important support if we get there. Resistance is at 1850ish. We’ve had nice action the past two days as most outlined areas gave us some adjustment areas for action.
In the Morning Call we will take a look at the banks again that have been very active. After Bank of America (BAC) earnings ignited the group yesterday, Goldman Sachs (GS) and Citigroup (C) report this morning.
Goldman Sachs (GS) reported earnings this morning and the numbers were decent. The stock was initially higher, went negative on the weak Citigroup report, but now is back in positive territory. It has been holding higher above its 21-day EMA and broke above the weekly descending channel at $178 yesterday. Look for some upside follow-through above yesterday’s day of $179.74 –that is the action pivot for active traders.
Citigroup (C) also reported before the open today and numbers were weak, sending the stock down around 3% so far pre-market. See how it responds to the gap down, but this could put it on the back burner among the banks for a while.
Bank of America (BAC) enjoyed nice gains of 2.27% on good earnings numbers yesterday. Use yesterday’s gap of $17.11 as the new point of reference. It does look a bit extended, so perhaps trim and trail.
JP Morgan (JPM) rallied 3% on good volume to mark a new high at $59.65 yesterday after initially being sluggish after its earnings. The bank closed on highs signaling potential upside follow-through above yesterday’s high.
Wells Fargo (WFC) also put in a new high at $46.74 after logging a 1.78% gain yesterday. Holding above the breakout level of $46.20 would keep its momentum intact.
High beta tech continues to give mixed opportunities.
Apple (AAPL) had a nice move from the $542 area, now it needs to digest some of that before potentially higher prices. There is some support at $551ish. Digesting above yesterday’s gap will make it easier to hold, then resistance comes in around $560ish followed by $570-575. I think it may need earnings to get above this.
Google (GOOG) continues to trend above the 8-day, rewarding the bulls. There is no real set-up but the trend remains strong.
Amazon (AMZN) is somewhat out of play, but it’s fine as long as it stays above $388ish.
Netflix (NFLX) has been under pressure since 12/27 when it broke its accelerated trend at $375ish. Now it’s trying to bottom out a bit. The new point to trade against is $319.
Baidu (BIDU) has been erratic and every time it broke out got beat up the next day, and now it’s showing relative weakness. Maybe you could get a Red Dog Reversal for a trade at $169.71. The 50-day sits at $166ish.
Facebook (FB) still holds in well as it builds its upper level base. It needs to stay above $55ish to keep this as an A+ set up for a potential trade through highs of $59.25ish.
There are still some decent set-ups out there.
Qualcomm (QCOM) finally had a clean break out of the monthly channel at $74.30 yesterday. The stock closed on highs, showing commitment to higher prices. Look for potential upside follow-through above yesterday’s high of $74.69.
SanDisk (SNDK) continues to build a tight flag above its 8-day EMA. The stock looks poised for a potential move higher above $73.20, and above average volume would help confirm validity to the move.
Twitter (TWTR) started to perk up yesterday after a few quiet sessions, finishing the day up 5.77%. Look for potential continuation to the upside as it has room to $63.50 area. If it could clear that resistance level, the next target would be $67.
Unilife (UNIS) has been forming a wedge pattern since early December. A break and close above $4.71 with some authority could resolve this pattern to the upside.
Organovo (ONVO) has been building a tight base above its 8-day EMA amid turmoil in the rest of the 3-D printing sector. A break above the pivot high of $12.38 could trigger some more buying interest.
Molycorp (MCP) had a nice bounce yesterday to register a 7.18% gain. Could that be Day 1 of a potential bigger move? Look for continuation to the upside as the stock has room to the $6.45 area.
Kandi Technologies (KNDI) was one of our Off The Chart trade ideas from Tuesday’s newsletter and had a potent breakout of the tight range to log a 15.83% gain yesterday. It has a high short interest of 21% and could continue to squeeze, so look for some potential continuation above yesterday’s high of $15.15.
Sungy Mobile (GOMO) has a decent looking chart and needs to clear $21.50 to get back to highs.
VMware (VMW) has enjoyed tremendous strength to start the year and is gapping up almost 2%, above the $100 level this morning. SalesForce (CRM) also has made a nice move since we started covering it again from $55ish, and now it’s at 2014 highs. Trim and trail both of these.
SolarCity (SCTY), a VTF favorite, is opening at highs after an upgrade. Holding above $70ish would make it easier to stay with.
Tesla (TSLA) woke up Tuesday with a monster Red Dog Reversal and might need a rest. Holding above $162ish would have it digesting well.
Metals didn’t fall apart as the market bounces. Use $119.10 as support to trade against in GLD if you navigate this sector, but there are so many better places to be.
Lots of nice action across the board. Not all stocks are created equal – they never are but we are seeing even more divergences it seems in 2014. Pick your list of go to names and continue to navigate. There is movement, but some digestion in the indices would be nice after two strong days.
Disclosure: Scott Redler is long AAPL, TWTR, FB, DANG, ONVO, CTRP, UNIS, POT, MEET, MCP, PLUG, POT. Short SPY.