After early weakness sent the market down through its 50-day moving average, buyers stepped in the to take the market green Tuesday. Having reclaimed the 50-day moving average from the bears, the bulls are showing that they are ready and able to defend any counterattack. The sneaky late-day pull-in and brief dip this morning helped shake out weak longs and work off oversold conditions, and now the market could be poised to test the upper end of this recent range. The next test for the SPDR S&P 500 ETF (SPY) will be yesterday’s high of $131.92. Any recent selling has been short-lived and it feels like the market wants to go significantly higher.
Once again, the real noteworthy action has been in individual stocks rather than the indices. Last Wednesday on the T3Live.com Morning Call, Scott Redler touted Baidu.com, Inc. (BIDU) as a leading tech stock that could be poised to explode out of its recent range. In the same segment, Redler stated that he would also be watching other leading Chinese stocks Sohu.com, Inc. (SOHU) and SINA Corporation (SINA) for explosive moves. Monday and Tuesday this week on the Morning Call Redler reiterated his bullish stance on SINA and SOHU, and today we have gotten those breakouts. SINA is up more than 4% on the day, while the real champ has been SOHU, up nearly 8%. Other tech leaders covered in the Morning Call like Amazon.com, Inc. (AMZN) and priceline.com Incorporated (PCLN) have also continued to be strong.
Tech has not been the only area of strength. The Oil Service HOLDRs ETF (OIH) has built on yesterday’s strength, edging closer to 52-week highs. Some cloud stocks have perked up, headlined by one of our favorites in the storage group, Rackspace Hosting, Inc. (RAX). Coal stock Walter Energy, Inc. (WLT) is also holding up well after popping this morning, and looks set to break above pivot highs above $132.18.
The action is happening fast in this rebounding market, for more of the calls as they happen subscribe to the T3Live.com Virtual Trading Floor, where you can follow a team of experienced professional traders interacting with a strong community of other seasoned traders. Listen to live trader radios, see actual positions update in real-time, and participate in the chat room to share ideas and receive feedback.
*DISCLOSURE: Scott Redler is long DANG, SPY, V, OVTI, VLO, JPM, JDSU, LVS, SOHU, POT, GLD, AMZN, NYX, LEI.
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