The watch list this week is peppered with IBD50 candidates positioned for a follow through into this week. Friday price action at support levels suggests we should see bullish continuation candles in many of these stocks. Price action should remain above the 9/20ema and 50ma, as SPY, NDX, NYSE and IWM all show bullish sentiment and breadth to support these assumptions.
Watch List – IBD50
Applied Materials (AMAT)
Ahead of applied materials scheduled analyst day on Wednesday, Stifle analyst Patrick Ho said he expects the company to reaffirm its outlook for 2018 as a ” UP” year in wafer fab equipment spending on top of 2017 which is expected to be another record year. He also believes the company’s new target model for 2020 will reflect its higher WFE and display spending environments which he believes could be bullish, acting as a catalyst for both Applied Materials and the group. Ho maintains a buy rating and a $61 price target on Applied Materials.
Technically speaking Applied Materials is building a series of higher lows. A breakout above $48.53 would suggest the next leg up is underway. Swing with a stop inside Friday price action to start and use the Trade of the Day set up for initial entry.
Most of the stocks on the watch list share similar thoughts as AMAT. Use your Trade of the Day set up for entry as noted on in the comments.
CORT is flagging at 52-week highs, with a $21.54 target short term, based on a measured move (MM) of approximately 3 points. If CORT pushes above the upper part of its flag, it will transition into a zone lacking any overhead supply.
Energy and Industrial related names appear to be in play this morning as well. Transocean (RIG) was upgraded to Buy from Neutral at UBS.
Sidenote: AMZN announced Friday that it has a new partnership with New York-based startup Olo to help streamline food ordering system, as the retailer continues to build its Amazon Restaurants brand, an exclusive food delivery platform for its Prime members. The chains are now part of the Amazon Restaurant platform: SHAK CMG DENN EAT WING JMBA RRBN will likely see action from analysts this week.
Finally, wait for the Opening Range before entering new positions. The markets are trading at All-Time Highs, with some caveats for the bulls.