Good evening StockBandits!
The upbeat news from GOOG last night delivered the nudge the NAZ needed today to push it past 3144, but it sure didn’t catch fire. The tech-heavy NAZ stayed within a very tight intraday range of just 12 points in today’s session, making for a very indecisive tape. It stayed positive though, knowing that the biggest of the bunch (AAPL) was set to report tonight. Meanwhile, the blue chips gained modest ground as small-caps slipped a small amount in a very uneventful session.
Tonight’s earnings news out of NFLX has that stock ripping higher by some 25% after hours. AAPL reported this evening, and some initial uncertainty has it all over the map in after-hours trading with a spike as high as $528 and as low as $458. The stock is off some 11% from the 4pm ET closing price as I type this. Being the gorilla of the NAZ, it’s going to set the tone at least in the early going on Thursday, and the futures are off about 1% since the closing bell as well.
We remain in a very positive environment technically with recent breakouts in the RUT, DJIA, and S&P 500 each having stuck so far. The NAZ still has a pair of hurdles to clear at 3171 and 3196 before it can join the others, but overall the bulls have maintained the upper hand. I think the next pullback will give us a better indication of just how confident the buyers are, which could in turn help shape some expectations as to whether the NAZ will catch up or the other indexes will begin to retrace. One way or another, I expect we’ll see more unison sooner than later across the indexes.
Tonight’s surprises from NFLX and AAPL are a great reminder to keep an eye on the earnings calendars to avoid any surprises. I use EarningsWhispers and Yahoo! Finance primarily, and it’s a good idea to keep them bookmarked this time of year.
Be sure to submit your charts by Thursday for this week’s video review of YOUR stocks, last week’s Charts on Demand was a hit!
Let’s get to the charts.
NAZ – The NAZ gapped past 3144 today but couldn’t build on it. Today’s finish was far from impressive, and now it appears this index will see another gap tomorrow on the downside with AAPL weighing on it.
SP500 – The S&P has seen considerable recent help from sectors like the financials and homebuilders, which has allowed it to make new 52-week highs. This index is now 20 points above its breakout zone of 1474, giving it some room to pull back before a breakout failure would enter the conversation.
RUT – The RUT couldn’t quite hit 900 today before backing off slightly. This small-cap index remains in great shape and has led each of the others with tremendous gains since mid-November. Some rest would be very healthy at this point, whether that means lateral basing or some profit-taking.
DJIA – The DJIA posted some solid follow through today on the heels of yesterday’s breakout to a 52-week high. However, volume is diminishing as price climbs higher, giving this index the look of short-term fatigue.
Notable Names:
AAPL is getting hit hard after hours, leaving the $500-600 trading range far back in its rearview mirror.
AAPL could be on its way toward a gap fill from Jan. 24, 2012 which extends down to the $420 area. This stock remains in poor technical health and is still out of favor. No need to make hero buys here, as some stabilization is needed first.
KMB is a good example of a stock in a trading range that’s offering some brief moves but nothing of the lasting variety. An exit from this range beyond $88 or below $82 would lend a hand to follow through, but until then this one remains in the captivity of these two levels.
DK has shown excellent momentum and this pattern is very clean and tight, including excellent volume characteristics. Unfortunately though, as a swing it wouldn’t have hardly any time to work since earnings are scheduled for Monday. This time of year, watching out for those earnings dates will at times mean skipping excellent setups like this one for the swing timeframe.
SFUN is working on a clean pattern here and still has time before it reports earnings on 2/12 according to Yahoo! Finance. I’d like to see this base narrow a bit further to reduce the risk associated with this pattern, as a stop beneath support is just a bit too far away on a percentage basis for my preference.
New Swing Trade Candidates:
These stocks look ready for imminent multi-day moves. Pattern confirmation occurs with a move through the entry level. Initial stop and target levels are also provided.
RKUS is a new issue which has been acting incredibly well. In its short history, it has made a few runs of $3 to $5, and may be setting up for another. I’ll get long for a swing trade if this one can clear the upper end of this symmetrical triangle pattern at $25, and will use the lower trend line as a loss-cut level.
QIHU has stabilized from its last little pullback and may attempt to break out soon. If it can clear $33.20, I’ll get long for a swing trade as the trend continues. I like the near-term support and this one has time to work with earnings scheduled for 2/19 according to Yahoo! Finance.
GME has worked its way steadily lower in recent weeks and here it’s basing in a bearish pattern once again since it broke support and failed to reclaim it on the bounce last week. A move below $22.90 is my short trigger as this pattern begins to confirm with room to retreat further toward prior lows which I’ll be using as targets. Earnings are not until March for this one.
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