Markets ended the week on a down note, with both the S&P 500 and Nasdaq off .5%. For the week the S&P 500 was UNCH and the Nasdaq was higher by .4% and on a YTD basis the S&P 500 maintains its advantage with a 7% advance, compared to the S&P 500’s 6.5% move. The week brought its good and bad, but some important groups took it on the chin and adds to concerns about a potential summer slowdown. First a newly developing one was the softness in the semiconductor group. Seems like the “old tech” and big cap giant INTC is capturing most of the limelight, while smaller names in the space suffer. We spoke of XLNX this week with its plunge on Wednesday, but others like FSL recorded its second consecutive earnings miss slumping 16.8% this week after a 13.8% decline on 4/25. SLAB which lost 14.4% Friday, fell 9.2% on 4/29, a horrendous 1-2 combo. MXIM puts up back to back misses with losses of 4.4% on 4/25 and 10.8% Friday. KLAC gave up 7.1% on 4/25 after a poorly received report and dropped 1.9% Friday, but did manage to find support near its 50 day SMA and reversed almost precisely off the round 70 handle. QCOM slumped 3.5% on 4/24 and a “devilish” 6.6% Thursday. One miss can be written off, but two begins to start a trend. The builder group was not so surprising, as the chips were acting powerful they conversely could not get there act together. Best in breed DHI was bruised the most taking a 2×4 to the head Thursday plummeting 11.5%. Others in the group losing their 200 day SMAs were TMHC LEN TOL PHM.

mxim

Stocks that can be bought as they retest prior breakout triggers are CP. CP is a best of breed rail name in the top performing transport group. The stock is higher by 28% YTD and by 52% over the last one year period. The stock has been under some serious accumulation this year highlighted best by its 9 week winning streak between the weeks ending 4/18-6/13 where it gained 25%. CP is down 4 of the last 6 weeks, but 3 of the 4 have been less than 1% and all occurred in lighter than average weekly volume. From an earnings standpoint CP has done excellent gaining the last 4 occasions. It rose 9.2, 4 and 5.2% on 10/23/13, 1/29 and 4/22 respectively. On 7/17 after reporting earnings it was up 2.2% taking out a 186.10 flat base trigger in the process. Lets look to enter within 1% of that trigger, and notice how the round 200 handle turned back CP this week almost precisely.

cp

Trigger CP 186.10 (within 1%).  Stop 178.35.

Sticking with the transports, stocks that can be bought as they take out bullish flag formations are GBX. GBX a rail equipment play is having a banner 2014 up 104% YTD and by 190% over the last one year period. The stock is trading just more than 1% off all time highs and is higher 12 of the last 15 weeks, recording a bullish outside week last week up 1.7% showing good relative strength. We always like to see consistency when it comes to earnings beats, and this name is no exception. It was higher by 12% on 7/2, down 2.4% on 4/3 (found solid 50 day SMA support 2 sessions later), up 3.2% on 1/8 and up more than 19% during a 2 day span last Halloween and 11/1/13. Since the 7/2 report GBX has traded in a very taut fashion and has formed a bullish flag formation and lets look to enter with a buy stop of 68.

gbx

Trigger GBX 68.  Stop 65.10.

Stocks that can be bought at their 200 day SMAs are QLIK. QLIK is among the weakest of the tech sectors, software. The stock is up 1% YTD and lower by 16% over the last one year period. The stock recorded a blowout quarter Friday ramping 14.7% and for the week by 26.9%. Perhaps someone had a good idea that this number was going to be very well received as it was up 12% this week BEFORE today and is on a current 6 day winning streak. Prior to today the stock was a poor performer as it lost 9.6% on 4/25, and 19% on 10/25/13, and an UNCH finish basically on 2/21 hitting precise 200 day SMA resistance and reversing. QLIK has looked better and is higher 8 of the last 13 weeks with none of the down weeks in active weekly trade. It burst above its 200 day SMA today and lets look to enter there as it takes a well need pause at 25.65.

qlik

Trigger QLIK 25.65.  Stop 24.55.

Stocks that can be bought as they take out the following specific triggers in firm trade are LEG NBR VOYA JBHT.

Double bottom trigger LEG 34.55.  Stop 33.05.

leg

Cup with handle trigger NBR 30.34.  Stop 28.05.

nbr

Flat base trigger VOYA 37.48.  Stop 35.75.

voya

Cup base trigger JBHT 79.99.  Stop 77.80.

jbht

Stocks to be viewed as shorting opportunities are ALTR. ALTR hails from the semiconductor space which until recently was one of the overall top performing sectors. It is a member of the “old tech” group that could not seem to find its footing. The stock is up 3% YTD but lower by 6% over the last one year period and does sport a dividend yield of 1.8%. ALTR trades wide and loose, bearish traits, and has had just one accumulation week all year, the week ending 1/31 when it rose 4.1%. The stock has lost ground the last 4 times it has reported earnings with todays loss of 1.6%. Prior to that it fell 3.1% on 7/25, 2.5% on 1/24 and 13.4% on 10/23/13. ALTR lost its 50 and 200 day SMA on Wednesday after XLNX’s sell off and lets look to short this name into strength into that line once again at 33.75.

altr

Trigger ALTR 33.75.  Buy stop 35.55.

GPS is a name in the retail group which has been a moribund sector most of 2014. The stock itself has been a laggard as well up just 2% YTD and down 11% over the last one year period and sports a dividend yield of 2.2%. The chart trades very wide and loose which are hallmark bearish traits and the stock has formed a bearish head and shoulders pattern. The neckline forms in conjunction with the round 40 handle and rough 200 day SMA resistance just below. This weeks fractional gain of 4 pennies prevented a third consecutive weekly loss. The two prior weeks were lower by 5%. GPS continues to impress with same store comps as it rose 9.7% on 11/8/13 and 5.8% on 2/7 although it did fall 2.3% on 4/11. Lets look to short GPS with a sell stop below its 200 day SMA at 39.25.

gps

Trigger GPS 39.25.  Buy stop 40.60.

ALV is a name in the auto space which has been feeling the heat as of late. The stock is still having a decent year up 13% YTD and by 26% over the last one year period and sports a dividend yield of 2.1%. It last took out a double bottom trigger of 93.92 on 2/11 and rode its 50 day SMA comfortably higher until recently. The stock is now down 5 of the last 7 weeks and volume trends have become concerning. On 7/17 it sliced through its 50 day SMA on heavy volume, a red flag, just a day before reporting earnings on 7/18 when it dropped .9%. It was the second high volume piercing of the 50 day this year, the first being in late January when markets were very soft. Notice how volume as it approaches 50 day SMA resistance is weaker compared to when it was undercut and lets look to short a move back into the line at 105.25.

alv

Trigger ALV 105.25.  Buy stop 107.90.

Good luck.

The author owns HTLD.

There will not be a Game Plan published this Tuesday, as I will be moving much of the next few days. The next one will be written Tuesday night for Wednesdays trading session. Thank you for your understanding and have a great weekend.

Trigger summaries:

Buy at former trigger retest CP 186.10 (within 1%).  Stop 178.35.

Buy stop above flag formation GBX 68.  Stop 65.10.

Buy at 200 day SMA QLIK 25.65.  Stop 24.55.

Double bottom trigger LEG 34.55.  Stop 33.05.

Cup with handle trigger NBR 30.34.  Stop 28.05.

Flat base trigger VOYA 37.48.  Stop 35.75.

Cup base trigger JBHT 79.99.  Stop 77.80.

Short at 200 day SMA ALTR 33.75.  Buy stop 35.55.

Sell stop to short below 200 day SMA GPS 39.25.  Buy stop 40.60.

Short at 50 day SMA ALV 105.25.  Buy stop 107.90.

Position summaries:

We entered HTLD on Wednesday at 23.83 after it had taken out a 23.63 cup base trigger. With Fridays close of 23.10 we are DOWN 3.1% on the trade. The stock recorded a very nice earnings move of nearly 7% Tuesday. The breakout on Wednesday came in more than double average daily trade gaining 1.6%, and HTLD tacked on another 1.6% Thursday in good volume too. Problem is SWFT blew up almost 20% Friday after a very poorly received earnings report. That was SWFT’s second poor report in a row as it slumped 7.5% on 4/25 as well. Is it a specific issue to SWFT as KNX JBHT and HTLD all reported nice numbers this month. No one can be sure and thats why stops are imperative and we will keep ours at 22.70, as always on a CLOSING basis.

htld

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