Markets once again went out near their highs for the session, displaying very bullish traits. Both the Nasdaq and S&P 500 gained near .5%. Breakouts are beginning to emerge more frequently supporting the rally mode we are enjoying. Today we saw breakouts from DEO taking out a flat base trigger of 121.49, CVLT taking out a 79.64 flat base pivot, and CBOE just finishing above its 36.30 3 week tight trigger. Some others which took out triggers today on soft volume that will need volume confirmation shortly are SAP from a 83.74 flat base pivot, and CAM from a 66.24 flat base trigger. Natural gas stocks are starting to move again, with RRC, best in breed in beast mode. Keep an eye on SWN as well. Perhaps its a sign of victory for the fracking revolution. I get the sense as I talk to traders that many are still not convinced of the potential duration of this run. They are staying small, in cash, apprehensive to add any new capital at these “lofty” levels. I am apologetically among them. The gains have not been massive on this recent run: it seems somewhat slow and steady, with the exceptional one day explosive move. Gradually gaining momentum, almost teasing those on the sidelines itching to get back in.
Stocks that can be bought as they retest prior breakout triggers ETH JPM IMAX . ETH took out a 30.39 cup based trigger yesterday. The stock has closed above the round 30 number since taking out that figure 3 days ago. The last time that happened was a close of 30.00 on 11/1/12. The stock is certainly the beneficiary of a resurgent home building industry. Other furniture names in the group acting well are LZB HVT. LZB, trading anything but lazy, since taking out a 17.23 flat base trigger on 2/20 following a well received earnings report. HVT, is a smaller name in the group, but the chart is closing in on near decade highs.
JPM, among a healthy banking sector, last took out a 3 week tight trigger of 49.78 on 3/6. The stock in that 3 week period has weekly closes within .03 of each other. Incredibly tight. Only caveat, is that the breakout occurred in slow trade. Weekly trade was above normal however. Others in the group acting fine are GS NTRS. GS last took out its own 126.83 flat base trigger on 12/18/12 on double average daily volume. On a weekly chart the stock is sporting a 159.10 cup with handle trigger going back 2 years. NTRS took out a 53.60 flat base trigger on 2/19, and received solid 50 day SMA support on 2/26.
IMAX, among a strong leisure sector, last took out a 25.06 cup with handle trigger on 2/11. There are many stars in the group with LGF enjoying robust gains recently and well extended from its prior 17.12 flat base pivot point it took out 1/4. NCLH, a recent IPO seems to have found some strong support at the round 30 handle. It has closed above 30.00 everyday since climbing above it for the first time on 2/15, (except for one 2/22 when it closed at 29.99), while testing it intradays on a majority of those days. Both HOT WYN are trading right at 52 week highs currently.
Stocks that can be bought as they retest their 50 day SMAs after recent breakouts are BC WAT LLTC. BC last took out a 27.50 flat base trigger on 12/19/12. It currently is sporting a 5 week tight trigger of 37.47 as well, and is testing its 50 day SMA right here and can be bought with a test of that level at 34.45.
WAT last took out a 89.61 cup with handle on 1/2/13. The group has its fair share of winners with TMO PKI acting well. Look for support to be had at its 50 day SMA at 92.
LLTC, hailing from the semiconductor space, last took out a 34.19 flat base trigger on 12/11/12. It has advanced higher quietly and look for a test of its 50 day SMA at 37.20. That 37.20 figure can be purchased if it holds.
Stocks that can be bought as they reclaim their 50 day SMAs to the upside, and then additional add on points are KEP ALXN. KEP can first be bought with a buy stop of 15.15 and then further if a 16.49 flat base trigger is taken out on strong trade.
ALXN can first be bought as it reclaims its 50 day SMA with a buy stop of 93.60, then additionally if the double bottom trigger that shapes up at 103.30 is taken out on healthy trade.
Stocks that can be bought as they take out the following specific triggers on firm trade are flat bases EXPE 68.19, SNY 49.80.
Cup with handle is WMT 74.23.
3 week tight trigger is MTZ 31.57.
Stocks to be viewed as shorting opportunities are CAT QIHU WSM. CAT, is quickly becoming the AAPL of the machinery world. The stock just last month was knocking right on the par door with a decent looking cup with handle trigger of 99.80. Times can quickly change. More worrisome is the strength of some of its competitors CFX DOV BGG FLS. It now is in its own personal bear market down 22% from its recent 52 week high, and nearing 200 day SMA support. Lets look to short CAT as it pierces its 200 day SMA with a sell stop of 87.10.
QIHU, has undergone a trend change this week. The Chinese internet player, lost its 50 day SMA yesterday and fell further today. It is now down almost 10% on the week. Not too long ago the stock looked strong as it took out a 24.88 cup with handle trigger back on 11/29/12. It is somewhat oversold now, so lets be patient and wait for a retest of its 50 day SMA near 31.55.
WSM is among the retailing group, and is trying to capitalize on the current home builder strength, is encountering trouble at its 50 day SMA the last couple sessions. The stock is exhibiting distribution on both its daily and weekly chart. It currently has a flat base trigger of 48.17 but more likely I would look to short the stock back at 50 day SMA resistance at 45.55. With the strength of names in the group we discussed earlier this one should not be lagging.
Buy at prior trigger retest ETH 30.39.
Buy at prior trigger retest JPM 49.78.
Buy at prior trigger retest IMAX 25.06.
Buy at 50 day SMA BC 34.50.
Buy at 50 day SMA WAT 92.
Buy at 50 day SMA LLTC 37.20.
Buy stop through 50 day SMA KEP 15.15.
Buy stop through 50 day SMA ALXN 93.60.
Flat base trigger EXPE 68.19.
Flat base trigger SNY 49.80.
Cup with handle trigger WMT 74.23.
3 week tight trigger MTZ 31.57.
Sell stop to short below 200 day SMA CAT 87.10.
Short at 50 day SMA resistance QIHU 31.55.
Short at 50 day SMA resistance WSM 45.55.
The author owns UNM.