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Stocks Go Green, Cloud Plays Popping

Jan 8 2014, 11:11am CST | by

Stocks Go Green, Cloud Plays Popping

Photo Credit: Forbes
 
 

*DISCLOSURES: Scott Redler is long BAC, C, TSO, NDLS, TSLA, GOGO, FB, VMW, RHT, BLDP, NUAN, ZNGA, DRYS. Short SPY.

Yesterday U.S. stocks tried to get going and had a decent day, but as far as the indices go it wasn’t powerful, even though lots of individual names did very well.

After a lower open, the S&P 500 is up about 0.15% with some support at 1834 then 1828. The 2014 support pivot stands at 1823 with resistance at 1840, then 1849.

Some will say the action through today is a strong predictor of the year as a whole. I don’t think it’s that important. We are still working off some of the excess of 2013 and the last 10-day ramp up into New Years.  We have Fed minutes later and a pretty big jobs number Friday.


The place to be is in “tactical names” as some are doing well and some are still trying to get some footing./>

Banks opened up yesterday after a great four-day run and retraced a bit lower, which is very normal action. Bank of America (BAC) was upgraded by Jeffries this morning with a $19 target. It held $16.45 yesterday and recent highs are $16.79. Citigroup (C ) was upgraded yesterday as it was extended. Today it was initiated with a hold. It has support at $53.78 and a more important pivot is $53.43.

Goldman Sachs (GS) was downgraded yesterday mid-day and led the profit taking. The 8-day was defended, see if that continues at $177.50. The 21-day is $174.30. Morgan Stanley (MS) has not been very frisky from a trading perspective. It needs to hold $31 to be relevant. JP Morgan Chase (JPM) continues to be the center of negative headlines and it had the worst looking candle yesterday. See if it holds the 8-day or whether it sees the 21-day at $57.61

Tech remains mixed with two-way action.

Google (GOOG) continues to be best in breed here. It triggered again above $1121 and closed at $1138ish. Use that as your resistance pivot if it wants to go again. Amazon (AMZN) has no compelling pattern here. You can’t be too bearish unless it loses the 21-day at $391ish with a close below.

Apple (AAPL) has been very lethargic. It didn’t have follow through to the prior day’s reversal but it did hold above $533.50 – that is your support pivot. Resistance comes in at $545ish. It hasn’t been acting great since the China Mobile news.

Priceline (PCLN) did give you a nice Day #2 after Monday’s reversal at $1131. Now see if it holds above $1142ish and builds.

Baidu (BIDU) is still building well. Above $181-$82 and perhaps we could get a new momentum trade.

Netflix (NFLX) has been one of the weakest of 2014. Look at the candle on 12/27 – that’s when it lost its “go-to status.” It then hovered on the low end for five sessions showing no snap-back. Now it’s headed to the 100-day. Perhaps today we could get a bounce around $337 pivot low from yesterday or $327 (100-day).

Some software/cloud/virtualization names are acting better.

VMware (VMW) had a very nice breakout above $90ish and now needs to hold $93ish and then it could see another move higher with some digestion.

Red Hat (RHT) also had a nice trade above $56.50ish. It still has room to go higher.

Salesforce (CRM) has a nice set up and needs to get above $55.20-$55.40 for some type of momentum move./>/>

Social media names are mixed.

Twitter (TWTR) opened up and was weak all day making some think the wedge-type formation could resolve lower. It had a big bearish engulfing day and now was downgraded today. It hasn’t closed below the 21-day EMA since it broke out above $42 so see how it handles the $59.94ish area, then recent lows at $58.57.

Facebook (FB) still acts well but stalled at prior highs. If it stays above $57ish for a few sessions then perhaps it could try again.

Zynga (ZNGA) is popping back on the radar. It needs to stay above $4ish to stay relevant.  Above $4.22 and perhaps it could get back on the move to $4.55.

LinkedIn (LNKD) had a nice reversal yesterday after a downgrade and closed well. We now have $198.50 as a support pivot for 2014 – see if it can continue above $210.

There are some set-ups that look okay for a quick look.

Noddles & Company (NDLS) is a laggard name that woke up a bit lately. Above $37.70ish perhaps it could get back to $40.

Nuance (NUAN) holds in okay and needs to get above $15.40-$15.50 for better action.

Gogo (GOGO) had a nice move yesterday that puts it back on the radar for higher prices. Above $26.40 it could go again.

Valero (VLO) broke out and could bring attention to the some others.

Tesoro (TSO) has a very tight pattern intermediate-term pattern. A break and close above $58.50 could have it looking better.

Musk watch:

Solar City (SCTY) is trying to hold its gap from the GS upgrade. Now you could trade it versus $62.50ish. The longer it stays above that the better for a chance at higher prices.

Tesla (TSLA) has been very quiet and getting tight. Above $150.40 and perhaps it could clear a descending channel and get back on track higher. It needs to stay above $146ish.

Metals bounce hit some resistance.

Gold (GLD) needs to stay above $117.15 in order to have hopes to build for higher prices.  I’m avoiding it./>/>

Lots of new issues from last year continue to act well. I will come out with a watch-list of them soon: WUBA, CUDA, TCS are a few.

Source: Forbes

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