The market gave us a big-time gap and go yesterday, blasting off into the upper half of the current range and squeezing shorts. This morning the futures are jumping between green and red. We were pointing higher overnight before pulling in this morning, but are bouncing once again into the open. Optimism is starting to surface everywhere as economic data improves. Goldman Sachs Group, Inc. (NYSE:GS) came out with a $1,450 S&P target for next year S&P, and Bank of America Corp. (NYSE:BAC) says $1,400.
I do think after yesterday’s move we can make new highs before the end of the year, $1,275 by the end of the first quarter and $1350-1375 at some point next year. The action should continue like the second half of this year; a stock pickers market with the possibility of 10%-12% upside despite the potential for some troubling moments as we absorb the problems of the “great recession.”
Short term we have some resistance at 1212-1215, then 1,222-1,225. Support is 1,202-1,198, and then 1190-1193 has to hold to keep validity to yesterday’s move.
Lots of nice moves yesterday as the market bounced.
Oil stocks Schlumberger Limited. (NYSE:SLB), Halliburton Company (NYSE:HAL) and Oil Service HOLDRs (ETF) (NYSE:OIH) had nice moves after we put them on the watch list earlier this week.
VMWare (NYSE:VMW) finally blasted off out of its range, and I feel it can get back to previous highs as it recovers from the cloud computing panic sell-off.
Las Vegas Sands Corp (NYSE:LVS) was sluggish yesterday but still triggered long on the gap up. It is up overnight again, and long-term I am very bullish on this stock. Again, don’t be scared off by its recent run.
Apple Inc. (Nasdaq:AAPL) looks good once again for what I believe will be a move through to new highs above 321.
I also bought some Baidu.com, Inc. (Nasdaq:BIDU) even though it’s still in its upper base and didn’t ignite yet. The stock has been very choppy but I would keep on the radar.
Banks are interesting down here. Goldman strategists stated they like the big cap bank index BKX for 2011, forecasting a potential 25% move.
Although I generally do not like to play laggards, I nibbled on some Bank of America Corp. (NYSE:BAC) and JP Morgan Chase & Co. (NYSE:JPM). They both have lower pivots that could be good for short-term trade. The triggers are: JPM $38.20-38.40, BAC $11.30-11.40 and GS 1$59.50ish.
*DISCLOSURE: Long LVS, JPM, AAPL, BIDU, BAC
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