Social Media Stocks Continue to Provide Opportunity – FB, TWTR, LNKD, YELP, ZNGA

There are mixed markets around the world. Europe is down for a second day as the U.K. unemployment rate came in higher than expected. Most European indices could use a rest after the recent two-week upside move. Asia is mixed as the Nikkei gives back 0.56% but was up 3.1% the session before as that index is still down about 10% YTD. The Shanghai that’s been acting better finished up 1.1% at two-month highs.

S&P futures are down 5-6 handles as we could use a rest. The oscillator went from -75 when the SPX hit 1740 about two weeks ago and then reached +50 yesterday, making this market overbought on an intermediate-term basis. We are also just 10 handles from all-time highs once again.

Let’s see what type of pull-back we could see here. There’s some micro support at 1835 but the real level is 1815-1818. If we don’t hold this area, the bears could try to take the ball back a bit.

We will be getting the Fed minutes today at 2:00 PM ET so keep an eye out for it.

In today’s Morning Call we will follow up on the solar group that had a nice move again yesterday.

SolarCity (SCTY) had a nice breakout to trigger our entry price of $76.40 from the Monday’s Off the Charts newsletter. The stock registered gains of 8% for the day. Holding above that area could be constructive for another move thru $80. It was downgraded to neutral this morning so it might take a day or so to absorb it.

Canadian Solar (CSIQ) also logged a 4.3% gain to build a nice base above its 8-day EMA. The stock closed on highs, signaling potential upside follow-through. It has room for a move back to highs at $43.60, in my opinion.

First Solar (FSLR) was mentioned on our Morning Call yesterday as the stock started to perk up a bit to form a rounding bottom, which can often point to higher prices. It tacked on 7% yesterday and the next pivot to watch is $58.30. Holding above $55.50 could help keep some commitment there.

Sun Power (SPWR) has a nice channel developing here and needs to clear $34.50.

Social Media stocks continue to provide opportunity.

Facebook (FB) continues to hover at highs as buyers stepped in at $66 yesterday to push the stock positive. It closed well off of lows, showing some power. A break above $67.58 would mark a new highs.

Twitter (TWTR) continued to inch higher as it added another 1.44% to its recent rally. It has some resistance at $58.62 from the 21-day EMA, which is now curling down. A break and close above that EMA could add some power to its rally for a potential gap fill at $64.80. It has to deal with a 10 million share lock-up expiration today, so see how it handles it. FB squeezed on its lock-up expiration.

LinkedIn (LNKD) had a nice Red Dog Reversal yesterday at $185.73 to finish up 3.13% on the day. See if it builds to create a pivot low or whether it was just a short-term trade.

Yelp! (YELP) has been building a tight base above its 8-day EMA. The longer it stays above this moving average at $89, the higher the probability it could see some upside momentum above $93.50ish for a move back to highs.

Zynga (ZNGA) had great upside follow-through to log another 5.75% gain yesterday. The stock is approaching our target of $5.50 from Off The Charts. Trim and trail.

High Beta Tech remains somewhat mixed.

Apple (AAPL) hit some resistance in the $550 area after a nice gap fill in the past two weeks, as we talked about that nice inverse cup and handle pattern. I’d like to see a pull-back towards $536-540ish to buy it back as it was extended.

Google (GOOG) is at all-time highs once again. It has been a great tradable vehicle. The last big move was the gap back on 10/18, which helped it regain momentum. It’s been holding above its 50-day moving average since. GOOD is above $1200 but no real set up here now.

Netflix (NFLX) still acts great and held the 8-day EMA yesterday at $428ish. Perhaps we could get another trade above $441 for cash flow if the 8-day continues to hold.

Amazon (AMZN) is not compelling and feels more broken than it has in a while. The $342ish level is some big support, if it breaks that below that it could continue lower.

Priceline (PCLN) is at $1300, extremely impressive but hard to touch here. I just hope people are stubborn short in this name.

There are various other names that continue to perk up.

Gluu Mobile (GLUU) had a nice breakout at $4.95 yesterday to put in a new high at $5.22. The stock closed on highs signaling potential upside follow-through. The next pivot to watch is $5.50.

Green Mountain Coffee (GMCR) is building a tight consolidation range above its 8-day EMA. A break above $122.38 on volume could set it back in motion for higher prices.

Qihoo 360 (QIHU) had a nice breakout at $101.40 yesterday. The Chinese stocks have been in play recently, keep them on the radar for some continuation.

RenRen (RENN) had a nice breakout to gain 11% yesterday. The stock has cleared some intermediate-term resistance level. Holding above $3.60ish would keep its pent up momentum intact.

Metals could use a rest after a nice move the past two weeks. GLD had a nice set up around $122ish and it hit $127.75ish – now see if it holds $126ish for potential continuation. SLV needs to hold $20.78ish to keep its bullish composure.

Last night I was on CNBC World markets talking about the market, Tesla (TSLA) and Apple (AAPL).

Disclosure: Scott Redler is long SPWR, ZNGA, SCTY, LIOX, GLUU, IMMU, RENN, CORN, QIHU, EBAY, YELP.

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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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