It seems like everyone is up in arms about a 1% pullback after an almost 30% gain last year, but to me it looks like pretty normal action. Most world markets that ran higher the last 8-10 sessions of 2013 and are experiencing some profit-taking.
Yesterday the S&P 500 put in a low in at 1823, above the 21-day and above the prior breakout support at 1813. That is the level to trade against right now with resistance at 1838, then 1849. We could see new all-time highs in the S&P 500 before a possible retracement to 1800.
Banks showed relative strength again yesterday and we’ve had a nice four-day move in most of them. We tried to identify triggers to buy additional tiers earlier last week. The focus was Bank of America (BAC) through $15.80 and then Citigroup (C ) through $52.50), but JP Morgan (JPM), Morgan Stanley (MS) and Goldman Sachs (GS) also acted well. I would trim and trail a portion but look to stay with some. However, it’s hard to add today.
High Beta Tech
Google (GOOG) holds up best and got another upgrade this morning as a must own by Deutsche Bank. It held the 8-day EMA around $1105 and now if it can stay above $1121ish it could continue higher. Where were these analysts title="GOOG - My #1 technical pattern for 2012">in 2012 when the stock was $615?
Apple (AAPL) had a nice reversal yesterday as it reclaimed its 50-day at $540ish. Holding above that would be good, and perhaps we could get an additional entry above $546.80. Next resistance is at $551ish. Samsung is under pressure after weak sales numbers, but I think that is a gain for AAPL that no one is really talking about.
Priceline (PCLN) has been under some pressure but had a nice tactical reversal yesterday. See if that builds, as this was similar to AAPL. Resistance comes in around 1155.
Amazon (AMZN) gave us an early short below $396 then bounced off $391ish. I guess trade versus that pivot as it’s tricky up here.
Baidu (BIDU) is very choppy but holds in decent. Next level for momentum would be a break above $181.50ish.
Workday (WDAY) that we listed yesterday did poke its head above $83 yesterday for a decent breakout. Today it’s getting an upgrade and could get some follow-through.
Red Hat (RHT) had a big gap up around a month ago, and still holds above it, which is usually a bullish sign for continuation. Now it needs to get above $56.70.
Casinos took two days off but got some coverage from MS this morning with a positive stance./>/>
Wynn (WYNN) has pivot resistance around $200.
Las Vegas Sands (LVS) held the 21-day and looks okay.
MGM Resorts (MGM) had a great stock last year and still looks good as it held its 8-day EMA.
Facebook (FB) showed a lot of power yesterday as it had a nice RDR at $54.53 and then powered above $55.65. The old highs are $58.58.
Yelp! (YELP) finally pushed through $70ish and still looks good. It needs to stay above this to maintain momentum.
LinkedIn (LNKD) has been correcting and acting heavy for weeks now. It closed below the 200-day for the second day yesterday. Today it was downgraded and is opening lower. See if you can trade a level versus a level, but I’ve been avoiding. Next big support is $187.
The 3-D printing names got hit a bit yesterday after a massive move.
3-D Systems (DDD) had its first potent down day but held the 8-day. Use yesterday’s low of $91.61 as pivot support.
Stratasys (SSYS) also got hit pretty hard in that upper spot- but still is above the 21-day. Use $127.66 as your pivot.
Some cloud names are forming bullish patterns.
VMWare (VMW) has an interesting tight pattern. It needs to get above $90.20 to get going.
EMC (EMC), which owns a large chunk of VMW, has a nice tight pattern. It needs to get above $25.15 to get some interested.
Metals continue to grind higher since the beginning of the year. GLD has some resistance around $121.45. I still don’t think this rally here will be sustained, but I’m avoiding either way.
*DISCLOSURES: Scott Redler is long AAPL, BAC, C, RHT, FB, DRYS, VMW. Short SPY.