There are some red arrows around the world as Europe comes off six-year highs. Asia is mixed as the Shanghai lost another 2.0%, making it 3.8% in two sessions. If this continues then people will really start to take notice. The Nikkei bucked the trend as it’s trying to rally back and it reclaim 15,000.
S&P futures are down 3-5 handles as the markets tried to breakout above SPX 1850 yesterday, giving us a nice early morning trade but then retraced half of that move in the afternoon. I’m sure some shorts got squeezed through 1850 if they’ve been rolling them up and some bulls put additional money to work, so both might have been a little miffed by the weak close.
Anyway, the story for 2014 has been lack of commitment and follow-through in either direction. Take your trades and be stock specific. If you are looking to add to winners think twice about ruining your price, and it’s better to cover shorts while you can rather than to press them.
Yesterday’s action might mean something if we break and close below 1835ish in the next session or so. If that happens, then some could start calling for the 50-day at 1815. If we go green today or have an inside day, perhaps the market could try again for highs with a bit more authority.
We have talked about how the banks needed to perk up to push the market to a sustainable new high, and that happened early yesterday. They will need to stay in the game for this market to try another move above SPX 1850.
Bank of America (BAC) held above the prior breakout level of $16 before seeing a nice 1,5% move up yesterday to reclaim its 8- and 21-day EMA. A break above $16.70ish could lead to additional upside momentum as this is where it breach the downtrend resistance that has been in place since January 15. It needs to hold 16.40 to keep some momentum.
Goldman Sachs (GS) also registered solid gains of 1.24% to break above its 21-day EMA for the first time since mid-January. Building some strength above this key moving average at $165ish could keep the bulls interested. Next resistance is $170.
Morgan Stanley (MS) outperformed with a 2.33% move yesterday. The stock looks poised to potentially take out the short-term resistance of $30.55 and has room for a move up to the $31.80-32.00 area. Holding above $29.70ish would be constructive.
JP Morgan (JPM) is above all its moving averages and hasn’t been in the news in a while. It needs to stay above $57.50 to get more momentum for the opportunity to take out $58.65.
C has a choppier chart pattern, but overall it’s been acting better since Feb 5th when it put in a double bottom at $46.20. Next resistance it needs to clear is $50.15. This has been lagging since it reported lackluster earnings compared to some of the other banks
High beta tech stocks have been providing opportunities.
Apple (AAPL) staged a Red Dog Reversal at $524.60 after for down days. The stock closed on highs, signaling potential upside follow-through. Next obstacle is the 8- and 21-day EMA at $531ish. Above that $537 is the next resistance it needs to clear. Holding above $525ish would be helpful for active guys to stay long if they bought it yesterday.
Netflix (NFLX) started lower on news of the deal with Comast, went from red to green, and then took out the action pivot at $441ish before making a new high at $449.69. Some digestion above the breakout level of $441 would be constructive for higher prices.
Google (GOOG) marked a new high at $1220 before seeing some profit-taking to put in a small topping tail yesterday. There is some intra-day support at 1211. Below that use yesterday’s low of $1205 as upper level support to trade against.
Amazon (AMZN) started the day looking like a short but went green and didn’t really look back, creating a RDR at $346ish. I’m not sure what’s next but a move and close above $355ish could lead to a move back to $360+.
Social media is still a focus.
Facebook (FB) continues to trend higher, holding the 8-day since last quarter’s earnings. There is no need to alter your course until that changes. Congrats to all riding this one as there is opportunity almost every day.
LinkedIn (LNKD) continues to work its way back into resistance. It had a nice RDR at $185.73 and wasn’t ready to break above $198 right away. LNKD did that yesterday and there is some news about its move into China. Perhaps you could get more upside through $199.98 to test some bigger resistance around $210.
Yelp! (YELP) tried to break out above $93ish yesterday and hit $97.29. It still looks good as long as it stays above $93ish. I think it could try again for highs.
Zynga (ZNGA) is resting around $5, which is constructive after a big move over the last few weeks. Maybe it could wake up again soon for a move through $5.17. It needs to stay above $4.80 to stay in the game.
Some other names moving around.
Tesla (TSLA) digested above $206 for a bit after earnings and then took out $215 yesterday. Morgan upgraded it today with a big $320 target so it’s getting some follow-through today above the earnings high. This morning it is up 6.5% pre-market, trading above $230.
SolarCity (SCTY) delayed the release of its full earnings report, citing accounting issues linked to recent deals. The stock slipped almost 5% in after-hours. There is some support at yesterday’s low of $75.46. Below that we have the 21-day EMA at $73ish.
Kandi Technologies (KNDI) had a nice breakout to log an impressive 16.5% gain. It could be a nice Day 1. Look for some potential continuation above yesterday’s high of $15.80.
Blackberry (BBRY) broke out of the intermediate-term wedge pattern on above average volume to rally 7.55% yesterday. A break above the pivot level of $10.10 could bring in more buyers.
Fusion-IO (FIO) has been building a tight descending channel. A break and close above $11.20 with some authority could set it in motion for a potential move up to the $14.00-14.40 area.
Metals continue to trend higher and have been a great spot for 2014. GLD broke above the tight pattern on 2/7 and hasn’t looked back since and has been above all key moving averages for weeks now. It’s a little extended but doesn’t mean it’s a short. Support is at $128.30ish then the 8-day EMA is at $126.77.
Disclosure: Scott Redler is long BAC, YELP, BBRY, FIO, ZNGA, AAPL, GLW, KNDI.