Stocks I'm Watching Monday 7/27

The McClellan Oscillator or $NYMO finished Friday at -42.77, which is a bearish reading. We still have not hit extreme oversold levels, so I am expecting some further downside early next week. All of my breadth indicators are looking very weak/bearish including $NYAD at -1427, $TICK at -483, & the short term trading index $TRIN closing above 1.5. If I see these indicators signal extreme oversold readings early in the week, I'll likely buy the dip via $SPXL. For those unfamiliar with $SPXL, this is a 3X levered ETF of the S&P 500. I will keep my stop tight, since levered ETF's are for trading only due to decay & tracking errors. If holding for a long time, you are almost guaranteed to lose with these trading vehicles & they certainly are not for the faint of heart. I put on a half position in Gold (via $NUGT) right before the close on Friday due to the reversal/hammer candle it put in, but that is my only open position over the weekend. Looking ahead to next week...

Five Below, Inc. was on my radar all of last week. $FIVE had a recent golden cross on it's daily chart & has been retesting it's 200 simple moving average after a recent breakout. Stochastics is showing a bullish cross & RSI is perking up. $FIVE closed positive on Friday, which was impressive given the blood bath of the overall market. I like this above $38 with a first target of $40. Stop will be placed right below the 200 day moving average at $36.80. Earnings aren't until 9/8.

Cyber-Ark Software has been acting much better recently as all indicators are suggesting a short term bottom. This is a cyber security play, and this entire space/sector has been very hot for some time now. $CYBR is sitting right underneath it's 50 day moving average. If we can clear this with conviction this thing could really pop. There is also a gap to fill at $65.58. Stochastics & MACD are both bullish and pointing up. I like this above the 50 day moving average at $63.29, with a stop placed at $59.50. Earnings are 8/11.

Calithera Biosciences, Inc. is my speculative pick for the week. $CALA traded above $30/share briefly back in December 2014, but has since traced back all the way to $6.60. Over the past few weeks it has been perking up & closed Friday at $9.03, which is actually above it's 50 day moving average at $8.98. RSI is pointing northward & Stochastics look like they want to make a bullish cross as well. I like this above $9.15, with a stop placed at $7.85.

JinkoSolar Holding Co. is in the Chinese solar sector. Chinese markets have been very volatile as of late. In my opinion, I see them continuing to breakdown after an astronomical rise the past 1.5 years or so. $JKS closed below it's 200 day moving average on Friday & looks like it's ready to retest the $23 area with a possibility of breaking down. Both MACD & Stochastics had a bearish cross recently. Keep an eye on oil prices whenever watching a solar name (solar companies move in conjunction with the price of oil traditionally). I will be looking to short this name at $23.56 with a stop placed at $24.85.

Goldman Sachs failed to put in a new high recently & looks like it wants to break down. $GS had a bearish cross on both MACD & Stochastics in the past few trading days. It also closed below it's 50 day moving average. I will be looking to sell it at $207 with a stop at $211.50. First target is $204. 2Q15 Earnings have already been reported.

Stocks I'm Watching on Monday, 7/20/15

With the Greek Crisis seemingly behind us & what appears as Chinese market stabilization taking place, the focus has turned to Earnings season in the US. Earnings season has begun with a bang. All of the major banks (JP Morgan Chase, Bank of America, Citigroup) as well as other behemoths like Google & Netflix, have beat expectations by a wide margin. At this point we are almost priced to perfection, as the Nasdaq closed at all time highs on Friday (with the S&P also only nominally below it's all time highs). We aren't technically in the extreme overbought zone on the McClellan Oscillator, but are getting close. I'm leaning slightly bullish, but with a wary eye. I took off all open positions on Friday since I didn't want to carry any risk into the weekend after such a large run up the past 5-6 trading days.

Taser International Inc., looks like it wants to test it's all time highs in the $35-36 range. $TASR popped last week on the Chattanooga shootings & is sitting right below it's breakout range. MACD received a bullish cross on Thursday after the tragedy, Stochastics is pointing up but not overbought & RSI is in a bullish range as well. I like this above $34.25 with a stop placed at $31.70. Earnings are 7/28.

Box Inc. just IPOd back in January of this year, so it is a fairly new issue. $BOX is in the Technology sector, which has been red hot on the backs of the Google & Netflix earnings last week. The chart above shows that there is very firm support in the $16.50-$17 range. It has tested that support area six times & held on each. Recently it has been acting better & closed on Friday at $18.74. I like this above $18.95 with my first target being $20.60. If it can close above $21, it could really squeeze the shorts (over 27% of the shares in float are shorted, which would take over 6 days for all to cover - Short Ratio is currently 6.10). My stop will be placed at $16.35. Earnings are 9/8.

Cal-Maine Foods, Inc. had a major breakout of the $45 area & ran all the way over $60 back in May. $CALM has digested this move for the last few months & now looks ready to retest it's previous highs. It closed Friday right below it's 50 day simple moving average. MACD just had a bullish cross & all other indicators are perking up. I like56 this over $54.10 with a stop placed at $50.50. My first target is $56.

Garmin Ltd. got hammered last Thursday after giving a very disappointing outlook for the upcoming year. The chart above shows that it fell on huge volume Thursday. MACD & Stochastics have a bearish cross & RSI is barely oversold on a very short term time frame. I am looking to sell $GRMN below $42.66 with my stop placed at $43.50.

Best Buy fell a weak sales report last Thursday. The chart shows $BBY tumbled on big volume. Stochastics had a bearish cross & is pointed straight down with RSI just shy of Oversold territory. I am watching to sell this below $32.56 with a stop at $34.40 (right above the gap down & 50 day simple moving average). Earnings aren't until 8/24.

Stocks I'll Be Watching Monday, July 13th, 2015

Check out this chart from StockCharts.com for IPGP

IPG Photonics Corp. is grouped in the semiconductors sector by Wall Street, but their core business is manufacturing high-powered lasers. The semiconductors have all been taken to the woodshed recently, so naturally $IPGP has followed suit to some degree no matter how irrational the move may be. $IPGP is widely institutionally owned (over 71%), so the big boys love holding this one. Technically, we have recently tested our 200 day simple moving average ($83.32) & closed slightly above it at the end of Friday's session. MACD & RSI are signaling bullish. I like this one above $84.36, with a stop set at $81 under our recent lows. Earnings are 7/27.

JetBlue Airways is the sector leader for airlines. If you follow the market, you are well aware that the Transports have really underperfomed recently. $JBLU has held up very well given the circumstances. All indicators are bullish on the daily chart (MACD, RSI, Stochastics), but be careful not to chase this one. If it opens up big on Monday, I'll likely avoid it. That being said, I like this over $21.79 with a stop around $20.00 even. Earnings are 7/28.

Cerner Corp. is in the Healthcare Sector, which has been the best performing sector year to date. $CERN recently tested it's 200 day simple moving average in June and has been acting better ever since. $CERN looks to have put in a higher low on the daily chart & it's RSI & MACD look very bullish. I like this one over $70.15 with stops set at $66.50. Earnings are 8/4.

Alder Biopharmaceuticals Inc. is a small biotech company, so this one is not for the faint-hearted. It moves quickly, so if you take a position in this one just know that you will need to be a little more nimble than normal. $ALDR had a massive breakout around $30 back in May. It had close to a 20% pullback from it's 52 week high of $54.90, and looks like it wants to ultimately retest those highs. All indicators look bullish, especially RSI. I'm looking to take a position anywhere in the $47.50-$50.00 dollar range with a stop at $44.75. Earnings are 8/3.

Goldcorp, Inc. is one of the major gold miners in the world. When looking into seasonality patterns of Gold, June & July tend to be it's weakest months. $GG has had a lot of trouble around the $17 area, so I'll ideally be watching it test this again & fail. I'd like to take a short around the $17 area, but may not be that fortunate if it opens down Monday. I like it below $16.33, with a stop at the 50 day simple moving average at $17.50. RSI & MACD are both pointing down/bearish. Earnings are 7/30.

Market Indicators to Use to Help Your Trading

I wanted to introduce two market breadth indicators I've been using recently, which I have found to be very beneficial to monitor while planning my entries & exits on all trades. The first chart is the Arms Index or TRIN (Traders Index). This trading indicator updates intraday & measures overall market sentiment. This indicator is most useful for day & swing trading, so please keep that in mind. I like to use $TRIN in conjunction with the NYSE - Advance Decline Line. This indicator takes the number of advancing stocks, subtracts the number of declining stocks & adds that to the previous periods value. This is good to use when trying to anticipate a reversal in the overall market, and is also a good tell as to the strength of the current move. On both charts above, I've determined what I like to use as extreme levels (signified by the blue lines). For TRIN I use 2.0 and above as extreme, & on the NYSE Advance Decline Line I use + or - 2,000 as my extreme levels. Extreme levels are subjective to each trader, so you may see differing opinions as to what designates an "extreme." As you can see, we closed Friday very close to what I consider an extreme level (1,856) on the NYSE A/D Line after our big rally all day. So just be mindful of this if you are planning on taking on new positions Monday. Broader fundamental market factors trump the extreme levels on these indicators, so please don't use them in the absolute sense. For example, if the EU & Greece can come to an agreement on a new bailout over the weekend as anticipated, then this will likely result in another sustainable market rally on Monday.



If you've read through any of my previous posts, I generally like to include the McClellan Oscillator or NYMO at the beginning of each. This is my favorite indicator to use to gauge the overall market. I use + or - 80 as my extreme levels on the $NYMO, but you will see a lot of traders use + or - 60. Again, extreme levels on indicators are subjective & obviously the more you come in/lessen the range the more signals will be triggered. We ended Friday in no man's land around at 13.03, which makes sense due to all the choppiness of the previous week. I lean bullish this week with earnings kicking off, but we will once again all be held hostage to the news coming out of Europe & China (at least in the near term).

Stocks I'm Watching the Week After the Grexit Referendum Vote

My preferred breadth indicator (the McClellan Oscillator), is showing a reading of approximately -12, which is essentially neutral with a bearish bias. We nearly touched oversold territory (-80 or below) after Monday's bloodbath over the Grexit crisis as well as the fear of a Puerto Rican default. In the current bull market when the McClellan Oscillator has touched the oversold territory, it has given traders some great BTFD moments. It is not a foolproof indicator, but really should have you scouring over your shopping list. We may see an oversold reading this upcoming week, but are all held hostage to the Greek Referendum Vote on Sunday.

Seemingly overshadowed by the Greek drama, China has officially entered a bear market after its unsustainable upward trajectory (Chinese Major Indexes were up some 125% over the past year). The Shanghai Composite closed down 5.8% on Friday while US Markets are closed in observance of Independence Day. For the time being, the US markets are ignoring the volatility across the Pacific, but it is something that we all need to certainly keep an eye on. In less than three weeks, the Shanghai Composite has fallen over 28% (33% for the Shenzen which is similar to the NASDAQ).

The Greek referendum vote will likely determine whether S&P futures are either sharply up or down on Monday morning in the pre-market. I'm expecting a big move at the open either way, so I will be watching a few long & short ideas dependent upon where #ES_F is trading. I have a slight bearish bias in the current market environment, so I'll go over a few short ideas first.



NN Inc. recently broke down, tested & held it's 200 day simple moving average. $NNBR has since bounced back, tested & failed to recapture it's 50 day simple moving average. NN Inc. is now sitting below all of it's short term moving averages (21 ema, 8 ema, 50 sma). Short term RSI (5) is pointing down & below the median level of 50. MACD is also pointed down & close to a bearish cross. I'll be watching $NNBR for a break of Thursday's low of $25.66. Stop would be placed above yesterday's high of $27.21; so your downside risk would be defined at 6%. Target would be a retest of the recent lows at $22.25 or a little over 13% from entry.

Deutsche Bank has been in a trading range for the past few months between ~$32.50 & ~$30.00. Currently $DB has bounced off of the lower end of the range and sits at $31.52 as of the close on Thursday. Deutsche Bank is a major German financial institution. This is purely a play off of the Greek referendum vote. I think you can go either way with this one dependent upon how S&P futures look Monday morning. If futures are down on a Greek referendum vote of "No"; I'd take this short with an entry starting anywhere below the close ($31.52), but not past $31.00. I would hold it until it hits the $30.00 area and see how it reacts, but this is my first target. If the Greek referendum vote is a "Yes"; I'd buy it anywhere between $31.52 & $32 with my first target being the $32.50ish area. Again, see how it reacts to this trading range & reassess when it nears either end of the range.

Western Refining, Inc. has been acting well recently along with the majority of the Oil refiners. I am looking to enter $WNR on a break of $45.75 with my stop placed slightly below the 200 day simple moving average at $41.60. My first target is $47.00 with a potential breakout to new all time highs above $51. MACD & RSI are both pointing upwards on $WNR & this one really looks ready.

BioCryst Pharmaceuticals, Inc. looks to be forming a Bull Flag after a recent breakout around the $12.50 area. This isn't a play for the faint of heart since it has a beta of 2.55, which is a reading that it is much higher/more volatile than average (1.0). With that said, I will look to enter $BCRX around $15.50, with my first target of $16.00. When I enter more volatile securities, I tend to keep a closer eye on them & take intra-day scalps as opposed to holding overnight just due to the risk involved. My stop would be placed around $14.82, but if you wanted to give it more rope you could use $14.00 as your stop (bottom of the bull flag).

Biogen Inc. had a recent pullback from all time highs at $480ish recently. This looks to be a short term pullback in a longer term uptrend for $BIIB. If you aren't aware of Biogen, Inc., it is one of the four major Biotech's. Relatively speaking, it is safer or less volatile than your average biotech, but all of these can move violently in either direction based off of various FDA approvals/denials within different phases of drug trials. I've already entered Biogen at $404.50, but it would be much wiser/safer to wait for it to break & close above the downtrend line around $415. My stop is currently placed at $395.20 (right below the most recent low & the 50 day simple moving average. If interested in any of my other current positions, please visit the "Positions" page on the right hand side bar. Thanks for your visit & good luck trading!