The watch list for the week has numerous candidates in hot sectors ready to lift off if the markets cooperate. Futures are currently pushing higher.
Watch List for the Week
All of the candidates for this week have several things in common. MACD is turning or has crossed, signaling bulls are wrestling control from the bears. RSI is rising. Price is above the 9/20ema with both moving averages beginning or already tilting upward.
Side note: We passed on a number of IBD50 stocks that exhibited a fade in MACD, Stochastic or RSI. A flat SOTEMA would also keep us out of an otherwise tempting trade on any IBD50 candidate. Check your stocks for these attributes before entry.
And, in most cases, price action is moving above VBP resistance into the “Kirby.” Make a mental check list and confirm that your stock picks have the needed criteria for a bullish trade this week.
Semiconductors are Strong
Several IBD50 listed stocks in this group look ready to continue this week. AEIS, in particular, shows relative strength as MACD begins to move above its signal line and the zero line simultaneously. RSI suggests the current bullish tempo could persist.
Applied Materials (AMAT) was on previous watch lists. Note the wicks on Thursday and Friday where buyers showed their presence. Price action continues to push above the VBP support level at 44.60. MACD and RSI are bullish. A push above the recent pivot high at 45.49 would be a signal to add to positions are start a new one.
Healthcare is Strong
Watch for this sector to follow through this week. Biotech stocks were unusually strong going into the Labor Day weekend. Centene (CNC) broke higher last Thursday, then dipped in the morning session on Friday. Note buyers stepped up and pushed prices back to session highs by the close.
Centene (CNC) broke higher last Thursday, then dipped in the morning session on Friday. Note buyers stepped up and pushed prices back to session highs by the close. If this continues, SOTEMA will start trending along with MACD. The latter signals bulls are firmly in control. There is no overhead supply above these levels, a big plus.
Technology and the Smart Home
Control4 (CTRL) replaced Albany Molecular in the S&P 600 on 8/22/2017. Since that time the stock traced out a narrow price range between 23 and 25. The result is an ascending triangle pattern, with a measured move (MM) of approximately 3 to 4 points. Look for CTRL to be trading close to 30 sooner rather than later.
MDSO is about to break out of this descending wedge. Targets are listed on the watch list, namely the recent pivot high at 79.36 and 52-week highs at 85.92. MACD crossed last week signaling bulls are in control.
In addition to the watch list, gold is also in play. Investors are bullish the yellow metal, most likely hedging portfolios against a backdrop of all time highs in equities. We’ll be looking to get back into GDX (miners) and IAU/GLD if we have the opportunity today.
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