Futures are off a bit as most world markets are basically up or
down small. Yesterday we had an inside day as markets try to digest
above the most recent breakout. If we can continue to digest above
(INDEXSP:.INX) 1698-1702 (
(NYSEARCA:SPY) $169.85-170.05ish), it would keep the current
complexion intact. I wouldn't change much unless we get a potent
break and close below the above area. It never hurts to do a little
less in August, especially after the big 5%+ move we saw in July on
top of the monster move we've seen for 2013. Yesterday we had the
lowest volume session of the year, a preview of what could be a
Today we will highlight a few stocks that gapped up after earnings
and are digesting well and have potential for future movement.
Recent examples are the two- to three-day consolidations we saw in
) before continuation. I wouldn't expect the same speed, but the
below stocks are worth having on the radar.
) had a big gap from $213.48 to $228.80 on Friday after the stock
reported solid earnings. It held above this gap well yesterday. As
long as it continues to hold this gap at $228.80, we could see some
continuation to the upside in the next few sessions. A resistance
pivot to watch is $237.96.
American International Group
) also gapped up on Friday after beating its earnings estimate to
break above the intermediate resistance of $47.68. It did filled a
portion of this gap on a pull-back on Friday, but still held above
the breakout level. Yesterday buyers held this level. The longer it
bases up here, the higher the probability we could see another leg
higher above $49.50.
) saw a nice run up into its earnings as it held above the 21-day
moving average for the whole month. Then it got a lift on Friday
after the media company reported a 20% jump in fiscal third-quarter
earnings and doubled its share-buyback program to $20 billion. The
stock had a nice gap up on Friday and digested this gap well
yesterday. Some consolidation above $77.95 could bring in more
buyers to lift the stock higher. Pivot resistance is $79-81.
(SODA) gapped up on Wednesday last week after beating its earnings
estimate and is holding above the gap well. Yesterday it retested
this gap support at $64ish and held. Active traders could use $64
as the new pivot to trade against. Above $66.90 we could see
another round of short squeeze as the current short interest is
(VMW) has a decent set-up digesting above the earnings gap of
$79.41. The 8-day MA just played catch-up. It needs to get and stay
above $84ish for potential continuation.
(NFLX) had two action prices of $227.47 and $235.88 on July 8 and a
target range of $250 - 260. The stock saw an impressive move that
week and went as high as $270. Then it saw a controlled pullback
into $240 area where it continued to find some support for the last
two weeks. Yesterday the stock shrugged off a negative article from
pretty well as it rallied 11 points off lows. Look for potential
upside follow-through above $253.90.
(FSLR) triggered above $47.65 and went as high as $51, but after
that it failed to get momentum above this level. FSLR has been
hovering around its flattening key moving averages. The longer it
holds above $46.30 recent pivot low, the higher probability we
could see some upside momentum. This support is also the last line
of defense to keep the intermediate-term bulls interested.
Noodles & Co
(NDLS), on July 22, had action price of $43.38 and target range of
$48-52. The stock got some momentum and went as high as $45.95 on
that Monday. After that, it took a while for NDLS to get to this
target range, but it did get some momentum this week and went as
high as $49.15 yesterday. This is a new IPO that is a little bit
thin, but it's worth keeping an eye on.
Green Mountain Coffee Roasters
(GMCR) has acted well as it triggered listed buy price of $76 and
almost reached his target range of $83-85 after a potent move to
break out of the mid-level base yesterday. It also reversed after a
article over the weekend. With this type of move, which would take
multiple days to work out, it's best to look for a calculated entry
and use some patience to wait for the trade to work itself out.
(P) had an upper "Cup and Handle" pattern in place that looks
potentially poised to trigger a move higher above his action price
of $19.32. The stock got some upside action yesterday and gained
1.67%. Look for potential continuation as the trade is in motion.
His target range is $21.50-22.
Apple continues to act very well as it tacked on another 1.5% of
gains yesterday. It has reached the next resistance level of
$470ish. It does look a bit extended on the daily chart. The stock
looks good and has room to the 200-day at $475.35 but some type of
digestion/pull-back would be healthy.
(GOOG) is trying to build some support above $896-900. For it to
get some momentum again, it needs to trigger and close above
Facebook had an awesome move through earnings, and it was also
tradable after. It could use a few days of rest.
(TSLA) had a nice gap and go yesterday to build on last week's
strength. The stock gained another 4.84% yesterday. Active traders
have a new point of reference at $144.89 (yesterday's high) to
trade around. It did reach the lower end of the $140-160 area.
(SCTY) triggered our action area long price of $42.80 yesterday to
break out of the recent tight range and went as high as $45.49. The
stock closed above prior pivot high of $44.98 showing relative
strength. Look for upside follow-through above yesterday's high of
(XONE) perked up a bit yesterday after basing around its 8- and
21-day MA for a few sessions. A move through yesterday's high of
$64.88 could set it back in motion. Next pivot resistance is
(V) had a nice move off of the morning's lows of $182.80 to go as
high as $185.14 and reclaim its 50-day moving average. The stock
had a potent down move on Wednesday last week due to fears about
debit fees limit. On Friday, the stock got some upgrades and closed
well off of lows. It has done a great job erasing the losses from
Wednesday. Keep this trade on your radar as it could see some
continuation above $185.14, and it still has lots of room to the
Metals had a decent move off the capitulation lows back on 6/28.
Gold (NYSEARCA:GLD) went from the "Red Dog Reversal" low of $115.65
up to $130ish. It started to break the upper flag and now it's not
compelling for quick action. When it closed below $127ish most
active guys like me became uninterested. The $122.73 level could be
worth a look if it sees it.
Although we all want to make money and have "things to do" in
August, if the market is going to be as quiet as it was yesterday,
your time would be better spent on the beach or in the mountains
spending quality time with friends. We will continue to look for
stock specific action, but less is more when the market is thin.