Market Starts Another Week with a Bang

Scott Redler |

The S&P’s are right back where they failed a few weeks back. The 200day served as resistance on Friday after the “exciting jobs number”, and this area will be tested again this morning. This time the bears might not be so lucky. 1260-1264 is an important area to watch this morning. A daily close above this zone should trigger another round of short covering, and perhaps some performance chasers. 1275-1277 is the next area to watch.

Bigger resistance is the October 27th high of 1292, and with a close above this area in the coming weeks and we can see 1320-1340 in January-February.

TECH

Apple (AAPL) gave us a nice trade as it held the 200-day in the $363 area. I also listed it for cash flow as it ignited above $376-$387. Now it might have a tough time where it failed in the $392-394 area. Could be a spot to sell some longs or try a cute short. This macro pattern needs more time.

Google (GOOG) technically looks great. The weekly charts look great, but on the daily it’s a bit extended. Overall it looks to make new highs and hit $700+ in 2012.

Amazon.com (AMZN) still in the penalty box for macro traders after poor earnings, and is under all moving averages. $200-204 is some resistance.

Baidu.com (BIDU) had a nice move from the $120 support area. This is one of the only decent Chinese stocks left for now. It needs some time to consolidate. $140-$145 is big resistance

Sandisk (SNDK) is above all moving averages, but at some bigger resistance.

International Business Machines (IBM) looks ready for new historic highs. Initiating up here could be tough, though.

VMWare (VMW) is slow and needs time.

Intel (INTC) acts very well but is at some resistance. It's above all moving averages, but will need some time before we take out $25-25.50.

Financials got a nice oversold bounce last week, but most have reached my bounce targets.

Goldman Sachs (GS) bounced but reached my $98-102 resistance zone. Now it needs to hold above $95-98 to keep the long side momentum.

JP Morgan Chase (JPM) big move into the moving averages and big support around $33. Let’s see if it can stay above $31.

Bank of America (BAC) has some room to $6-6.15, but it's not that compelling.

Morgan Stanley (MS) hit $16 quick and needs some time.

Oil Service ETF (OIH) has an inverted Head and Shoulders pattern that could trigger a macro move higher.

US Steel (X) could be a decent January effect type play.

It’s been a very unusual, fast market. You had to switch gears quickly last Wednesday. IBD still has us in a market correction. I would have thought they would have put us back in a confirmed rally on Wednesday. I guess they need to see more action, like the rest of us. If we don’t fade today and close 1% higher, I’m sure they will change the big picture. Important to know your timeframe and risk tolerance. I don’t see any tight patterns with triggers unfortunately due to the type of move we saw last week. At this point managing some positions with a hedge can be a way to stay with the trade and invovlved.

Strong stock usually end the year stronger, and some weak stocks could benefit from some window dressing.

*DISCLOSURES: Scott J. Redler is long SPY, OIH, XLF, GOOG, INTC.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
AAPL Apple Inc. 112.71 -1.91 -1.67 52,481,151
AMZN Amazon.com Inc. 805.75 1.05 0.13 2,353,511
BAC Bank of America Corporation 15.52 -0.08 -0.51 51,604,424
BIDU Baidu Inc. 191.72 -3.73 -1.91 3,252,952
C.P.N Citigroup Capital VIII 7.875% Fixed rate Floating 26.20 0.03 0.11 50,015
GOOG Alphabet Inc. 786.90 -0.31 -0.04 1,411,937
IBM International Business Machines Corp 154.98 -1.13 -0.72 2,702,153
INTC Intel Corporation 37.19 -0.36 -0.96 18,062,474
JPM JP Morgan Chase 67.25 -0.14 -0.21 13,967,357
SNDK SanDisk Corp. n/a n/a n/a 0
VMW Vmware Inc. Class A 73.38 -0.43 -0.58 1,379,724

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