The bullish market cycle continues, as longer term oscillators push ever higher. Energy, biotech, pharma, home improvement, building materials, and construction related stocks have been outperforming.
Bullish Market Cycle
While it may seem redundant, we have to remind ourselves that the cycle up will likely continue until we reach recent market cycle highs. Namely, we need to watch price as it approaches 12,019.85 in addition to breadth oscillators, NYHL, Hilo percent and NYMO. When these agree with price, we’ll have a condition to start taking profits into strength again.
If we anticipate the market cycle will continue a bit longer, more of our bullish setups should continue to break out.
Bullish Market Cycle – Setups
Many of the stocks from the weekly watch list look ready to follow through. CTRL is one that we are watching today. A follow through or continuation day is in order, especially considering the up cycle.
If we take a long today, we might also consider some covered calls. We are thinking 2017 15-SEP 25.0 calls that will expire Friday, September 15. If we can get 1.10 or better today we might take that trade as well. We will reassess during the LIVE broadcast.
Facebook was on the watch list for several weeks running. A week ago it finally broke out of its bullish descending consolidation. We are looking for a follow through day to add.
Home Improvement and Construction
Many of the home improvement, building, and construction stocks we’ve taken recently are following through this morning. USG (+0.54) HD (+1.29) GNRC (+0.40) among others will likely finish the week at highs. Keep moving your stops with price and consider covered calls if IV Rank pushes above 50%.
Have a great day,