By: Scott Redler
This morning I sent you a chart that looked like Swiss cheese, and that’s what a lot of traders feel like right now. This is the new normal. Today we broke above 1060-1065 and now officially broke this most recent descending channel to the upside. This is 4th time this year we’ve broken this type of pattern and it has led to a nice upside move. Where it leads to you never know, but you might as well put together a plan before hand and be on the right side of the trade the day it happens.
There is nice participation from our go-to stocks today as they held up well during the last correction.
CMG Chipotle Mexican Grill (ROCK STAR) broke above my 152-154 buy price and is now at historic highs, showing Investors that if you are longer term stock picker, you can make money. You have your longer term plays and then you have stocks you cash flow trade. This one was an example of one that is more than just a “cash flow trade”.
CRM, which I added to the list Monday, is a very close to breaking above the bull flag of 112-114. It looks good.
AAPL held lower range of 238-240 and is back in the channel but needs time.
AMZN is doing well, and gave us a nice long entry around 126-126.50.
BIDU is back in the game and strong.
VMW our stock of the year keeps moving well.
FFIV pattern is great and back above 90. This should be at new highs soon.
NFLX is up 6 today and needs to be on every trader’s watch list. 133 next resistance, then old highs.
PCLN is hard to trust, but still goes with market. The stock held earnings gap and the next big level is 310.
FCX has held up well, is up a lot and looks good
Banks that have been weak are getting a bounce today. Nothing so compelling on a longer timeframe, just a trade.
GS can see 142-143 before it contends with resistance.
Casinos look okay but are not compelling; they need time.
The agricultural group still looks good.
POT one day they will get real cash bid higher, it’s holding above 145 well.
AGU and CF, the other two strongest ags, continue to work well.
Nice bounce in OIH, see how it handles 102-103.
Beaten up big cap tech are bouncing a little
INTC
CSCO
MSFT
As a market participant you need to figure out your time frame. Are you trading these channels for nice percentage moves? There has been now 9 of them now!
Are you a longer term stock picker accumulating great stocks, monitoring them closely for composure? Some stocks have been great holds this year, or this decade, even though the S&P is down 10% for the decade. This is why you actively manage portfolios, and watch key levels, measuring strength along the ride.
As far as the year-over-year. We did have a 60-70% move off the 2008 lows. We are down about 3% for the year. This was very expected as we knew it would take time to absorb the excess of the huge structural breakdown we’ve seen in our economy. A lot needs to be fixed and it will take a ton of time. Take what the market gives you and keep your likes and dislikes out of your trading plan unless it’s a great chart with great fundamentals.
While it is possible to find strong stocks, don’t be stubborn. When things change, you must have a strategy to change with them.
