You’ll have to forgive my absence over the last two weeks but I was in full holiday mode, which means I was too drunk to do any posts. But now I have sobered up enough to get back in the swing of things.
As I write this, the clowns in Washington are still trying to decided if they will drive us over, or pull us back from the fiscal cliff. Keep that in mind, as well as how the overall market reacts to whatever these asshats come up with when looking at these set ups.
$AIR broke out nicely above a gap resistance level and has formed a tight flag/consolidation area, setting up a good risk/reward entry on a break.
Biotechs were hot this year and $ALXN was up over 70% at one point before taking a brutal drop in October. Since then price has been consolidating for what may be another leg down. Friday’s inverted hammer was an NR7 bar which you could use as you risk/reward set up on a break below the trendline.
$ANR is basing below a resistance level that has been tested numerous times, which is good action. Each successive try increases the odds it breaks, and if it break both the 200ma and that level at the same time it can create a fast move.
Everybody and their brother had been watching $CRM for a breakout, which it eventually did. Now it’s coming back in to test that breakout level on light volume. A successful test may be your chance for a “second bite at the apple.”
A cup and handle pattern is usually only valid on a weekly chart, but we have the same pattern on a daily with $EQIX and I like it. Especially since this stock is at ten-year highs.
A nice flag after breaking out of a large pattern sets up a good risk/reward trade in $OC.
Everybody’s favorite small cap stock $SIRI is flagging right below five-year highs.
2012 was a great year for the housing stocks and all eyes are on them to see if their recovery is real or just a “bounce” from the devastation of the financial meltdown. $TOL has come in very orderly here, and will soon be “squeezed” between it’s 200ma and the down trendline. A break of that trendline is a buy.
Flagging below five-year highs is good for $TSO.
I love $WFM. Any place where I can eat pizza and drink craft beer while my wife shops is okay by me. The stock had a great year in 2012 but is looking like it is rolling over here as it goes under its 20, 50, and 200ma. A break of the lower trendline would be a short.
I have been keeping my eye on $WTR for a while now as it creates a large flag or pennant formation at six-year highs.
I have no idea what $YPF does and I also get really nervous when the work “Sociedad” is in any stock I am looking at. That being said, there is a nice, tight flag formation after the break of the 200ma that looks compelling.
I have talked about trading “scripts” in the past, and how it’s okay to do that as long as the technicals confirm the script. Last year it was reported that for the first time in their history, Fidelity had more than 50% of the funds they manage in bonds. To me that is a massive contrary indicator. Sure, conventional wisdom is that retail investors have left the markets, never to return, and if that is the case, then the retail broker dealers must be “dead money” as well. But money has to find return, and I think we may be questioning the so-called “death” of the retail trader/investor at some point.
With that in mind, we have $SCHW in an extremely tight flag on a closing basis after breaking out of a large consolidation pattern, and $ETFC nearing the top of a similar pattern. Obviously if this “script” plays out these stocks will be longer term plays, however there may be opportunities to day or swing trade them along the way for the nimble trader. Just something to keep on your radar as we enter 2013.
Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading - The Best of the Best: Top Trading Tips For Our Times by clicking here.