Friday, March 25, 2011

Technical Picture - Tech Leadership

The markets gapped up on the open, the SPY probed its 50 day SMA and faded. Once the gapped was filled and prices stabilized, the bulls regained strength and pushed prices back up. Leadership was provided by tech including casinos, disk drive, internet, software (RHT earnings) and semis, in other words, a broad based tech rally.

As depicted on the SPY charts above and below, the market is extended in the wake of the rally from last week's lows. We have wedged our way back up to the short-term downsloping trendline and a pause here would be good. Rally has been on lower volume

Economic data - GDP in pre-market and Michigan sentiment at 9:55.

Copper has retested broken trendline and we will soon see if this is a dead cat bounce or not. HG_F look like they are forming a topping pattern, basing just above 430.

GDX profit taking took hold this afternoon after the big move from the lower edge of this symmetrical triangle. No surprise given the overbought bias.

Biotechs setting up a solid base here. This defensive sector looks poised for a BO soon.

Biotech sector names - I like CELG - solid base forming after testing long-term support.

CEPH (not depicted) just won its FENTORA patent suit against WPI.

AMRN if it regains $8.00.

GES Bear flag on daily. BO point is $37.50 as long as it doesn't regain its 5 period EMA (orange line on 15 min. chart below.)

Day Trades

FOSL - was hoping this would wait and set properly, but it based at $85.00 and eventually broke for a quick scalp.

JDSU gapped up, consolidated and broke above 5 day EMA.

RIMM was a good day trade into earnings, but after hours, it fell out of favor on weak guidance.
Key supports in play are mapped out on daily chart above.


Ashish said...

Hi Jamie,

Can you share your thoughts on why you weren't happy with the FOSL base under 85 (on Friday) and chose a scalp at 85.5.


Jamie said...

Hi Ash,

This post is dated Friday, but these are actually Thursday's trades. The reason I didn't want FOSL to break on Thursday is the big move on the daily to arrive at the $85.00 level. I thought it would be better if it could base a day or two in the upper range before breaking out. Narrow range price contraction before expansion is one of my favorite setups.

So I took the trade anyway as a scalp. The next day, Friday, an analyst upgrade helped propel the stock higher, which set up a good day trade as well.