I won't be surprised if AKAM tries to break $40.00 in early action tomorrow, but I would prefer a long entry from $38.50.
NVDA - Beginning of stage three consolidation after last week's bullish move.
SLAB is consolidating recent gains. Look for potential intraday reversals from key support levels.
As suggested in this morning's watch list, AKAM was a buy on a break of its pivot above $37.40. I entered the trade on a high volume break and took my usual 50% profit on the 10:00 reversal. Not surprisingly, under today's market conditions, AKAM swooned all the back to test Friday's high. Once it appeared to have successfully tested and bounced, I re-entered the trade to my original share size and closed the entire position into the close. Sweet! P.S. My near-term target is still $42.50.
The NASDAQ gapped up on the GDP data, carved out a wide range bar and closed on its highs. In so doing, it managed to recapture its 20 day EMA. The only caveat was the lower volume. We ended the week the same way we started it and finally the bulls can take comfort. We're still in a technical bounce with lots of resistance over head. NASDAQ 2100 is just 6 points away and the downtrend line is pretty evenly matched with the 50 MA, so don't be surprised if we have some profit taking early next week. The SOX paced the way in today's action but all tech sectors particapated. NVDA realized a 10% gain on the session (refer to the Trade of the Day post) followed by KLAC and BRCM at 6% and 5% respectively. Even the badly bruised internet and networking sectors managed to add 2.2% each.
The market gapped up on the GDP report and tech stocks, led by semiconductors, broke through resistance. NVDA tested yesterday's high in early action but failed. After a shallow pullback and narrow range trade, it finally pushed through $21.35 with an uptick in volume around 11:00. This was my signal to buy at a very low risk entry point. There was never any need to get out of the trade until the end of the day. Notice how, after the break, there was hardly any overlap of the real candlestick bodies except during the lunch time consolidation. This is my definition of a perfect, orderly trade.
CTXS is resuming its downtrend. The ADX is pushing 40 so momentum is bearish, however, we do have support in the $30.00 area.
LRCX is forming a bearish flag under its bearish H&S top. I don't think it will break tomorrow because it closed near the high end of the flag, but I wanted to post it tonight just in case.
BIDU looks like it will fill its bullish gap, but don't be surprised if it rallies temporarily when it fills the bearish gap ($71.38). There's also a lot of support at $70.00.
OSIP made a higher low today which is bullish in the context of the current consolidation pattern.
Still bullish on GENZ and NVDA (I'd like to see NVDA pullback to $19.00 before the next leg up) and bearish FFIV.
The NASDAQ gapped up on the open and sellers came in almost immediately for some profit taking which was expected as we noted last night some sectors were looking pretty toppy. The worst sectors were networking and biotechs. The latter was due for some healthy profit taking and is still well positioned to move higher, but the networking sector cratered, giving it all back in one day. Leading the sector down were TLAB and JDSU with 16% and 8% losses respectively. Although we carved out a bearish engulfing bar, the 2050 pivot held on a closing basis. The NASDAQ observed the 20 EMA as resistance once again today, however, for the time being, the technical bounce is still in play.
I couldn't resist picking up some AKAM again when it retested its $35.00 resistance from last night. I booked 50% of my profit as price hit $37.00 and I sold the balance after a failed attempt to make a higher high on the five minute view brought price back into $37.00. I bought it again after it held support at $36.00 for a quick rally into the close - good for another $0.75.
ADBE looks poised for a technical bounce. Target is $28.50.
BRCM is extremely oversold and will likely bounce either from its current support level or the next level at $20.00.
We are consolidating Monday and Tuesday's gains. As long as we don't take out 2050 ( pivot point) on a closing basis, the consolidation is healthy. Biotechs, drugs and health care are still strong but the latter two are getting toppy from a technical perspective. CEPH was halted AH on a report that Q2 income will exceed previously issued guidance by 40%. The best performing stocks on my screen today were AAPL and SLAB, which finally broke out of their post earnings consolidation ranges. Stay tuned.
AKAM reported strong earnings AH beating the estimate by 2 cents. As soon I read "We had an exceptionally strong quarter, exceeding our growth expectations", I knew I wanted to get in on the AH trade. I waited until the price stabilized after the initial wild price swings and took position at $32.55. I was trading from the office so I didn't have the benefit of an AH chart. All I could tell from my stockchart.com was that resistance was at $36.00. Price consolidated for quite some time after taking out $33.00, but patience paid off as it soon took out $34.00 and shortly thereafter made a quick dash towards $35.00. I took my exit at $35.00. I didn't want to risk having trouble getting out if price decided to pull back as I was trading from a Web Trader. Trading from a Web Trader is like trading the old fashion way - refresh, refresh, refresh....
If ADSK breaks resistance it will no doubt, test its trendline. ADSK doesn't report earnings until August 17th.
GILD is retesting resistance.
FFIV's low volume rally back to resistance foreshadows further weakness.
Also on the watch list are CERN (has consolidated recent gains) GENZ, NVDA, SLAB, and WIRE (big earnings beat AH).
The NASDAQ didn't offer much in the way of surprises in this session. We tested resistance in the first half hour and pulled back. The middle of the day was very narrow range trade, followed by a strong finish. Led by biotechs, most tech sectors were able to add to yesterday's big gains. The one sore spot was the internet sector which gapped down and couldn't even manage a gap fill intraday. Expect more weakness from this sector after the AMZN miss tonight.
As per last night's watch list, CEPH was a buy stop order on a break of yesterday's high. I sold 50% as price hit $66.00 and the NASDAQ was testing 2075 resistance. I thought to sell the entire lot because I didn't think the NASDAQ could go any higher after yesterday's big move, but greed kept me in the trade and a half hour later I was stopped out on the balance of my position. When the breakout point failed to hold as support on the first pullback, I decided to move on. As it turns, out CEPH had two more rallies before fading back in at the end of the session. The daily looks like a failed breakout so I won't continue with CEPH tomorrow.
NVDA is being heralded as the big winner from today's merger because ATYT will be tied to AMD and NVDA will have the rest of the world. Looks like last week's move was in anticipation of this week's news. NVDA doesn't report earnings until August 10th.
A big earnings beat and higher guidance, it doesn't get much better than this. I'd like to see SLAB pullback to $35.00 for an entry on support.
LVLT showed up on a momentum scan and it looks like it wants to push higher after all this consolidation. N.B. LVLT reports tomorrow BTB - Reuters est -0.22
CEPH is not a momentum play just yet, but it has formed a nice base (almost an inverted H&S bottom) and could break anytime now.
As highlighted here over the weekend, several tech sectors were due for a technical bounce. So this morning with news of the AMD/ATYT merger, strong earnings pre-market, and no new negative catalysts, we were finally able to bounce without the Fed. I would have liked to see more volume but positive tech earnings in AH from big semi names like SNDK and TXN should give this bounce some legs and a potential for continuation. Possible resistance in the area of 2075 and, no doubt, at our 2100 pivot point.
LRCX was a buy after it held breakout support during the 10:00 reversal period. I locked in a 50% profit after a 1 pt. gain and gap fill. The balance of the trade was exited around the same price about 45 minutes later, on the first signs of weakness.
GENZ was very bullish on the open but formed a high upper shadow into resistance shortly after the open. These types of reversals before 10:00 often signal a failure so I was cautious getting in. I waited until spport held and price bounced before getting long. I exited 50% on strength as price approached resistance and held the balance into the close. My stop was set 10 cents below last Thursday's high for the balance of the trade.
CERN gapped up on earnings and Q3 guidance on Friday. The volume and ADX crossover show strong momentum. A quick look at the Time and Sales leads me to believe that we have institutional buying as I noted many large block sales early in the session. Key support areas are $38.00 followed by $37.00.
As per last night's watch list, ATHR was trading down in pre-market (as were many tech names) and fell out of its bearish rising wedge on the open. My entry was $16.80 and I covered 50% shortly before the 10:00 reversal time as price started to rise rapidly. I was stopped out on the balance of my trade just above $16.00 in mid-morning. The rest of the trading day was narrow range so I didn't take any other positions.
Two chart patterns that may provide potential trades. Don't take a position until the actual break.
Looks like the bears are starting to play dirty - they annihilated yesterday's big gain in one session. I was really only focused on one stock today and I didn't realize how bad the day was until near the end of the session. The bulls are on the defense again. Nothing new there, but it's too soon to tell if they're going to continue to be as submissive on a retest of the July lows. Tomorrow is options expiration and that means trading lite for me.
TZOO's earnings were a real disappointment as noted here this morning. The pre-market trade was too choppy so I waited to see how it opened and decided to short on a gap fill. My target was yesterday's low and I covered my intial short for a gain of 2.4 pts. When I came back from lunch, I noticed it couldn't get a bounce and was hovering just above support. It reminded me of YHOO yesterday so I got ready to short again on a breach of support. I covered half of my second short as soon as price fell into the next support level and covered the balance into the close. I never imagined that a stock could shed 6 points on a two cent beat, but I guess the party's over and everyone wanted out.
