S&P hits all new time high, again. And interestingly enough, the NDX on Thursday made an "Island reversal" bar and gapped back up on Friday. That type of pattern normally comes at the bottom of a move. It usually signals that the chart has powerful potential to move higher. But, I suppose, it shouldn't come as a surprise as I have been writing for the past two years that this is a secular bull market and it still has a few years left in it yet.
https://profit.ly/user/Turbobob/blog/market-top-or-continuation
https://profit.ly/user/Turbobob/blog/looking-into-my-crystal-ball-20161119
https://profit.ly/user/Turbobob/watchlist/stocks-to-watch-20160817
https://profit.ly/user/Turbobob/blog/dont-fight-the-trend
The Russell 2000 (IWM) broke out of the declining tops line on Friday after making an orderly pull back. The chart does look bullish but it does need to trade through the former around 151. If it can break through that level then we should see another up leg in small cap stocks.
Biotecfhs (LABU, BIIB) have come down in a falling wedge since the September highs. They have pulled back to support and bounced off the support twice (LABU). But with the rest of the markets so strong, I think biotechs will turn and keep up with the upward move as a lot of the downward move of the biotech ETFs can be attributed to the $30 decline in CELG.
Semiconductors (SMH) continue to be one of the strongest sectors in this market. On Friday the ETF made a new all time high and really is only mid channel of a longer term trend. I could see this trading at $105 from this $98 level.
Financials (FAS) broke out on Friday after flagging for the last two weeks. Along with the SMH this sector looks to lead the markets higher.
Gold (GLD) and the miner ETFs (JNUG, NUGT) really seem to be in a trading range right now. I am bullish on gold but nothing exciting is going to happen with metal prices for a least 1 more year. I do think precious metals continues to trend higher, just slowly.
Longs:
ABEO: This stock remains strong recently trading over $22.00 before pulling back to $16.00 where they announced a secondary financing. But when a stock then recovers quickly from that announcement it looks to go much higher. I would look to go long over $20.00 with $22.00 and $26.00 as price targets. Short ratio, 5.2 days to cover.
CDNA: Nice looking chart. Stock has come from under $2.00 and traded near $7.00 in the last few months. It has been forming a wedge pattern since early October and coming near the apex of the coil. I would look to go long over $6.10 with adds over $6.75. Price target $8.00 and $9.00 (top of the channel).
MRTX: Back in September, the stock had a big pop trading up into the mid $12.00 range. It then had an orderly pull back and then reversed and has been marching up since. Over the last month it has been building a base pattern and on Friday it did break out of the base trading as high as $16.50, closing at $15.75 (support). A starter position could be put on here at support with adds over $16.50. Price target $20.00.
QURE: After breaking through lateral resistance at $11.50ish the stock has rocketed $8.00 in two days. On Friday it traded as high as $19.32 closing right near the top of its range. Next resistance comes in around $23.00. Short ratio 12.5 days to cover so this stock could continue to squeeze.
RIOT: Bitcoin play and with Bitcoin hitting $6,000 these stocks maybe coming into play. It recently spike to $11.00 and pulled back to support at $7.00. Over $9.50 and we could see $11.00 and then $14.00.
SRAX: Stock seems to have a lot of momentum It does trade with wild swings. But with Bitcoin at $6,000 all the stock promoters are going to be moving to something to do with Bitcoin. SRAX seems to fit into that category. I'll be watching on Monday for an entry opportunity with a move back to at least $5.75 and price targets of $7.00 and $9.00.
TRXC: After having a big move from $1.50 to $5.00 the stock has been in a falling wedge and seems to find support at $3.00. It reversed on Friday trading up as high as $3.54 closing at $3.47. I will watch on Monday for an entry opportunity with a price target back to $5.00 and maybe $6.50. Short ratio, 5.8 days to cover.
VKTX: Stock has been in a nice up trending channel since September. The last three days has seen big volume as the stock traded as high as $3.24, closing at $3.00. $3.00 is the resistance area for it and the stock is at the upper range of the channel. But if momentum continues, $5.00 is the next price level.
Shorts:
CATM: I continue to hold this short swing as the chart does not look like it is finished yet. I will look to add below $23.00 with $20.00 as the price target. Short ratio, 12.3 days to cover.
CPLA: Same chart pattern as CATM, but just starting. It is in a down trending channel, but building a base in here. If it should break below $65.00, then price targets are $57.00, $49.00 and $39.00. Short ratio, 4.5 days to cover.
DKS: Stock has rallied the last week trading up to the top of the down trending channel. I will be looking for entry opportunities in the $27.50 range or below $24.50. Price target, $21.00.
FL: Another retailer with an ugly chart. It looks like it is ready for another gap down. Below $30.50 and $27.00 and $25.50 are the price targets.
FOSL: Another retailer with a strong down trending chart. The stock is forming a bear flag right at the top of the channel. I will be watching for entry opportunities, but probably under $8.50. $5.00 and lower is the price target.
PLAY: Stock has run up to over head resistance at $49.00. I will look for short entry opportunities with $42.50 and $40.00 as price targets.
SBH: I would short this stock just on its name alone, Sally Beauty Holdings. On Thursday it broke through triple bottom support but rallied back on Friday with rumors of an Amazon take over. Price target is $15.00 and then $13.00 and lower.
Great post thank you!
You explain things so well. Thx!
thanks
Brilliant, thanks Bob
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