Markets extended their winning streak with the Nasdaq recording a bullish outside day and now up 6 straight sessions. The leading tech index is up a very nice 2.7% for the week thus far. I am not making any predictions, but a 20% advance from here (Nasdaq gained 37% in 2013) would put the Nasdaq within a sniff of its all time highs of 5132.52 The S&P 500 bounced right off 50 day support today and if not a for a fractional loss Wednesday it would be up 6 for 6 too. Going into Friday it is up 1.8% for the week. As the benchmarks continue their impressive moves higher it often pays to identify which groups have been strong, and which ones are receiving the rotation into them. Currently that would have to be the financials, the semiconductors and energy. In the semi space you have your strength in common names such as QCOM MU XLNX AVGO, but newcomers are helping the group as well. INVN NXPI AMBA fit that bill. Old names like AMAT soared today above an 18.18 double bottom pivot point gaining 5% after reporting after the bell last night. Others like KLAC that we profiled earlier in our Game Plan this month with possible support at its 200 day SMA would hold, has now ran up 8 straight sessions and is near a 64.75 double bottom trigger. Perhaps even more important is to look at where the smart money is doing and in this group there is recent merger activity. A good sign companies are seeing value. Last week ENTG after announcing an acquisition of ATMI. This Monday MCHP did the same with SUPX.

kalc

For the first time ever I believe their are all long plays tonight. Just playing them like I see them. Will see if this marks the short term top.

Stocks that can be bought as they retake their 50 day SMAs and then set up future valid base patterns are HES NYT OXY NUE. HES hails from the energy sector which has been gaining ground and it is lagging a bit in 2014 down by 5%. It did so much of last year to with a one year return of 15%. HES reported earnings on 1/29 and closed in the lower half of its daily range, although it did find support at its 200 day SMA. It did lose that long term line a few days later but quickly recaptured it, just what you want to see. HES touched its 200 day one other time since retaking it the week ending 12/21/12, that being on 6/24/13 where it found precise support there. It is treading water just beneath its 50 day and lets look to enter HES with a buy stop above it at 79.15 which sets up a future double bottom base with a pivot point of 83.64.

hes

Trigger HES 79.15.  Stop 75.55.

NYT is a name in the media business trying to find creative ways to keep viewing up with the emergence of the internet. It did record a decent gain over the last year with a 60% one year return, but has struggled in 2014 down by 10%. The stock has come a long way from lows of 3.44 made back in February 2009. NYT just reported on 2/6 and rose 3.3% and not surprisingly hitting precise 50 day SMA resistance. The stock took out a nice tight cup with handle base and a 12.82 trigger on 10/16 on good volume. Last week the stock had a nice reversal after earnings and for the last 5 days has traded very tautly, suggesting an explosive move. Lets look to enter NYT initially with a buy stop above its 50 day SMA at 14.65 which sets up a double bottom base with a pivot point of 15.52 that can be added to.

nyt

Trigger NYT 14.65.  Stop 13.35.

OXY is among the energy giants and is up just 6% over the last year and is lower by 3% YTD. We last looked at it in late November (and were wrong) with a possible move above a bullish flat base trigger of 98.80. It was taken out on 11/22/13 on very timid trade and the next session fell 2% on elevated trade. Both red flags and not the type of action one likes to see from a fresh breakout. Remember the best ones generally work right away. OXY last reported on 1/30 and finished UNCH, although in the upper half of the daily range. The two before that were 10/29 down 1% and 7/30 down 2.5%. OXY gained 3.5% last week on the best weekly trade in 8 months. It is hovering right around both its 50/200 day SMAs. Lets look to buy this name above the yesterdays high slightly above the 50 day at 92.90 which would then set up a double bottom trigger of 95.79. The stock has a nice yield while you wait for the move to par later in the year.

oxy

Trigger OXY 92.90.  Stop 90.55.

We spoke this week about the nice prospects with X and how it is looking better than NUE. That does not mean NUE does not warrant our attention. We last profiled NUE on Thursday January 9th with a potential cup with handle trigger of 54.23 that was never taken out. Wait for price confirmation. It last reported on 1/28 and had a negative reversal closing up 1%. NUE did maintain 200 day support that day, but was broken soon afterwards. It quickly recovered and is up more than 4% this week so far after the previous weeks nice reversal. NUE has had very lackluster moves in the last year up just 6%. It is lower by 5% YTD, but the stock does have an attractive 3% yield. NUE is hovering near the round 50 number and with the 50 day looming just above lets look to enter NUE with a buy stop above the 50 at 51 and can be added to through a future double bottom base pivot of 54.27.

nue

Trigger NUE 51.  Stop 49.55.

Stocks that cane be bought after taking out bullish flag patterns are MTW. MTW is among the stout industrial group and put up a decent one year return of almost 50%. It is outperforming enormously in 2014 thanks to a huge day on 1/31 after reporting earnings. It rose 15% that session in the largest volume in over one year. In fact since missing badly on 5/1/13 where it lost 10% after releasing numbers it has put 3 positive ones back to back. On 10/24 it rose 1% and on 7/30 by almost 5%. The group is strong with names like CAT TEX trading right at 52 week highs. The days following the big move on 1/31 were sweet. It traded in a tight band between 27-28 for 6 sessions before closing above 28 Wednesday. MTW has now formed a bullish flag pattern and lets look to enter with a buy stop above at 29.45.

MTW

Trigger MTW 29.45.  Stop 27.80.

Stocks that can be bought as they take out the following specific triggers in firm trade are PHH LXK LLTC EOG XEC.

Cup base trigger PHH 26.86.  Stop 25.45.

phh

Cup base trigger LXK 41.55.  Stop 39.60.

lxk

Double bottom trigger LLTC 46.84.  Stop 45.30.

lltc

Cup with handle trigger EOG 176.98.  Stop 172.35.

eog

Flat base trigger XEC 113.13.  Stop 108.40.

xec

Good luck.

The author owns HAL TMHC. We bought some TMHC at 23.01 just above its 22.96 double bottom trigger. It took out its 200 day SMA as well today. Our stop will be 21.55.

Trigger summaries:

Buy stop above 50 day SMA HES 79.15.  Stop 75.55.

Buy stop above 50 day SMA NYT 14.65.  Stop 13.35.

Buy stop above 50 day SMA  OXY 92.90.  Stop 90.55.

Buy stop above 50 day SMA NUE 51.  Stop 49.55.

Buy stop above flag formation MTW 29.45.  Stop 27.80.

Cup base trigger PHH 26.86.  Stop 25.45.

Cup base trigger LXK 41.55.  Stop 39.60.

Double bottom trigger LLTC 46.84.  Stop 45.30.

Cup with handle trigger EOG 176.98.  Stop 172.35.

Flat base trigger XEC 113.13.  Stop 108.40.

Be Sociable, Share!