Can The Market Make and Hold New Highs?

There are mixed markets around the world once again. Europe is down small as the pullback from six-year highs stays controlled. The Nikkei is off small as it’s still trying to get back on track for 2014 but still hangs at 15,000. The Shanghai staged a feeble bounce after a 3.8% two-day move lower.

US markets digested pretty well yesterday after the S&P couldn’t above S&P 1850 on Monday. It did hold above the 8-day and put in a two day low above 1840ish. Today S&P futures are up 4-5 handles and could make another attempt to make those headlines the media is scrambling for but the market is a bit frustrated about. Resistance stands at 1852-1858 – a close above that could open that door to 1900-1925 by mid- year.

In today’s Morning Call we will look at social media again that provides opportunity each day.

Facebook (FB) continued to grind higher in an ascending channel above its 8-day EMA. There is no real pattern for now, but a break below the upper level support of $68.45 could bring in some sellers for a cute short opportunity as the stock looks a bit extended at this point. Until then, try to stick with the trend. If you are going to test a cute short have a stop.

Twitter (TWTR) briefly broke below last week’s pivot low of $54.62 to form an “h” pattern that could point to lower prices with a break and close below yesterday’s low of $54.50. The stock failed to fill its earnings gap as it ran into resistance at $59 on Wednesday last week. Keep an eye on this as a potential short idea.

Yelp! (YELP) had a nice breakout on Monday and healthy rest yesterday as the stock had a small inside day to digest the big move up. Holding above $93 would keep active guys interested for a potential breakout to new highs above $97.23.

LinkedIn (LNKD) has been trading very well since the RDR at $185.73. It had a nice gap and go to get back above its 200-day key moving average yesterday. Use yesterday’s gap of $203 as the new pivot to trade against.

Zynga (ZNGA) was a nice hold from Off the Charts. Yesterday it tried to wake up but couldn’t close above $5.20ish, Maybe it could try again today.

We will also look at the solar names after First Solar’s (FSLR) weak numbers and sharp sell-off last night.

FSLR’s earnings number came in light. The stock dropped almost 13% in heavy volume during after-hours trading yesterday. There is some support at $50, below that we have February’s pivot low of $47 as key support level to watch. Look to see if today is a gap and go to the downside, or if it can come off the lows and still “be in the game.”

SolarCity (SCTY) had a nice breakout to new highs to log a 3.4% gain yesterday. The stock closed above breakout level of $80, showing commitment. It did meet some sellers in after- hours due to FSLR’s weakness. Use yesterday’s low of $76 as the new pivot to trade against. See if it can absorb the weakness as some might be worried about its report due to FSLR.

SunPower (SPWR) continued to grind higher above its 8-day EMA. It needs to clear the resistance at $35.40 to get some traction to the upside. Maybe it culd go from red to green or just digest depending if weakness spreads.

Canadian Solar (CSIQ) has a tight two-month consolidation. It needs to hold $38ish. If it can, perhaps at some point it could take out $40.55.

High beta tech continues to be mixed.

Apple (AAPL) couldn’t build on the RDR from Tuesday and closed near lows. Today it’s a bit lower, but I may look for the same strategy again today. The new pivot is $521 and gap support starts at $517.38.

Google (GOOG) has no clear set up except it’s been riding the 8-day showing a lot of relative strength.

Amazon (AMZN) staged a nice two-day move after the RDR at $346.75, then a nice push above $$354. Now it has to deal with some resistance in the $360’s.

Netflix (NFLX) had a nice two-day move since absorbing the Comcast news. Now it needs to hold above $445 for a bit before making taking on more gains.

Tesla (TSLA) is up another seven points this morning after yesterday’s sharp gains on the big Morgan Stanley upgrade. What a move and a good lesson on not being stubborn if you were short (which you shouldn’t have been into earnings in the first place). That $206 pivot went a long way as it held after the report, and then went through $215 and looked great before the big upgrade. It’s hard to chase here, but that doesn’t mean it’s a short. The recent pivot high is $259.20 and yesterday’s gap starts at $228.

Some other names to watch.

Blackberry (BBRY) had a nice two-day move to clear some intermediate resistance at $10.10 and $10.85. Use yesterday’s gap of $10.25 as the new pivot to trade against as holding above this gap could keep its momentum intact.

C-Trip (CTRP) has a tight bull flag above its 8-day EMA and looks poised to potentially see higher prices with a break and close above $51. The stock has room for a move up to $53-54.25 area before it runs into the next resistance levels.

Pandora ℗ also picked up some momentum above $38 yesterday. The stock did see some profit taking in the afternoon but as long as it stays above the upper level support of $37, it could see higher prices in the coming sessions.

Goldman Sachs (GS) was weak yesterday with some other banks, see if it holds in. If it goes red and trades through $163.16 perhaps you could look short. Sellers need to contain this below $165ish if they want yesterday to mean anything.

IBM had a big move off the lows and now it’s flagging again. The stock needs to get above $185ish for there to be another trade, in my opinion.

Boeing (BA) is up premarket. It seemed to want to head back lower from its tight range but see if it can stay above $126.21 as the pivot.

Plug Power (PLUG) is a small stock that woke up yesterday and looks good if it can get and stay above $4.10.

Metals had a very nice move this year and keep trending. They are a little extended right here, though. GLD has a gap at $128.34 to protect, if that fills the 8-day is important at $127.30ish.

Disclosure: Scott Redler is long YELP, BBRY, GLW, CTRP, P, PLUG, ZNGA. Short SPY, FB.

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Undercurrent Trader

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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