Futures are pressing 2190.00 (+/-) this morning, as we start Thanksgiving week. With Black Friday and Cyber Monday approaching, retailers will be looking for the bulk of their holiday sales to buoy their bottom line.
Amazon and Apple are stocks that will benefit from the bullish trend in consumer discretionary spending. As consumers become more optimistic about the economy, many of these industry groups (retail, auto, media and home improvement) are showing institutions remain interested.
Volume by Price resistance tapers markedly above current levels. Bears nearly touched the 200ma, before Apple reversed course. We now see a flag of sorts, just above the 9ema. RSI has potential to move through 50, as MACD histogram indicates; the bearish trend reversed.
Look for similar indications in the office supply industry group. Staples bottomed the week of the election and hasn’t taken a respite since. With RSI embedded, we are watching for a flag. MACD is well away from its signal line, as momentum has yet to dissipate. The company reported earnings on 11/17/16 that met expectations. Forward guidance was tepid, yet the stock ripped higher after the election. The weekly chart shows potential to achieve 19.00 per share, if the economy expands as planned under a new presidency.
Energy shares also show promise. Many stocks in the oil and equipment services, and pipeline industry groups look bullish. RDC reported a beat of 2900% (not a typo) on 11/01/16. RSI, MACD and volume suggest Rowan Companies will continue higher, as it trades through the 200ma over the past 4 trading days. We’re also watching KMI.
ACIA and TWLO were starters last week. We are watching for signs momentum traders will remain interested this week. Price action is accelerating above the 9/20ema. This is the early stages of a trend change and should be monitored accordingly. If and when price action clears the red dashed horizontal, resistance does not increase markedly until above 50.00 (+/-). The Kirby is a powerful catalyst above 42.00 (+/-). Trail your stops.
CRUS is one of the few IBD50 listed stocks that we are interested in, as of the close on Friday. Cirrus Logic reported a beat of 30% ending its latest quarter. Look for continuation of the breakout last week. RSI and MACD are trending bullish. We’re also watching AMAT and MX for similar results.
RSI is embedded on the majority of IBD50 stocks, hence the reason we are waiting on entries. Monitor these stocks as several have pulled back to support levels and could change this week, if Nasdaq continues to push higher.
Side note: Thursday is a short trading day.
Happy Trading
Vinny
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