Harry Boxer, On 8 Charts to Watch (TheTechTrader.com)
Our first Chart of the Day is Opexa Therapeutics, Inc. (OPXA), which jumped 267% yesterday (Tuesday). After the gap up at 2.64, I indicated to our subscribers to buy the first pullback, and sure enough it got back down to 2.22 before rocketing for the rest of the day, to believe it or not, just near 7.00, at 6.93, before closing back at 5.62. Up 4.09 for the day. At one point it was up over 300% in one session. The volume was 56.8 million shares, by far the heaviest in history.
In early August there was a breakaway gap and a big volume surge, a one day bump similar to Tuesday, and then it settled down and went sideways in a coil on very low volume for about two or three weeks. Tuesday it gapped up and exploded. On the intraday chart, which I find most telling, there was a big gap up, an early pullback, a run up and flag three times, a nice five-way move. It went from 2.20 to about 3.94 inside of the first hour. After that there was an hour-long flag, then it started to move again.
It stair-stepped up in five waves, flagged again, then exploded in a 3-way advance off of that and reached 6.93 before pulling back and reconsolidating and retesting over the last couple of hours.
Certainly a very impressive performance, and with that kind of performance, the long-term chart shows that it broke out above the early August high, the Aug-Sept highs of last year, and even took out the Jan '08 high, and is at the highest level it's been in about two years now. It showed extremely strong volume action and price action.
Sinovac BioTech Ltd. (SVA) is another stock that had an interesting day Tuesday, which opened at 9.50 and went to 10.33 before backing off, but still up 61 cents today on increasing volume.
Definitely with OBV at new highs, you'll want to keep an eye on this one for a potential breakout of a mini flag and an explosion into the low to mid-teen potential.
Advanced Micro Devices (AMD) also had a big day. Even though it's a heavily capped stock I want you to see the action on it. Checking out the long-term declining tops line, which has taken three and a half years to break out, it finally got that break out about a week and a half ago, consolidated for four or five days, and then exploded on Tuesday, up 66 cents or 15% on 73 million shares, which is the heaviest volume all year. It also took out the May-June highs and closed just beneath the high for the day going away. It had a very strong performance. You can expect prices to get up to about that 6.50 area, my short-term trading target.
Solar energy stocks had a big day as well, and one of my favorites has always been Canadian Solar Inc. (CSIQ). Looking at the chart you'll see a really neat 4-week down channel that went from early Aug until today when it was broken. It also took out the 21-40 day moving averages, and closed near the mid-Aug snapback high. If it gets through the area of resistance, we'll see a retest at the 20.00 level, beyond that, forecasting the top of the channel somewhere in the high 20s. This stock could be a real runner along with several stocks in that group, which also had a good day today.
I want to point out that LDK Solar Co (LDK) has the highest short interest of any of those and it had a pretty good session Tuesday.
Moving on to MannKind Corp (MNKD), the chart shows today's action breaking out of a three-month coil on heavy volume, which was significant, and if it takes out the 9.25-9.35 zone from early June, it could run into the 10.00-11.00 range, maybe even as high as 12.00 short term. It's a beautiful chart. Looking at the long base it formed prior to the run up in Feb-Mar-Apr before that coil formed, you'll see terrific technical action.
MDS Inc. (MDZ), a healthcare services firm, formed a nice base, broke out last week, settled in for a couple of days, and started surging again up 38 cents, on volume of 448,000 today. It's right up against the spike high and if it starts to accelerate, it may move toward the 10.50-11.00 range.
Oculus Innovative Sciences, Inc. (OCLS), which bounced off the bottom of its trendline and channel bottom repeatedly. It got up to 3.06 today, which is near the resistance level I drew across the chart, backed off, but if it comes on again tomorrow and takes out the 3.09-3.10 zone, it could surge up to the 4.00 level, maybe even 4.50-4.75, as high as 5.00 wouldn't surprise me either.
Once again here are some really good stocks to keep an eye on and monitor.
Jack Steiman, On Buying Weakness (SwingTradeOnline.com)
The S&P 500 weekly chart is now using the 70-week moving average at 1010 as good support, let alone solid gap support at 1018 with 1012 being the 50-day exponential moving average on the 60-minute time frame chart. Lots of solid support close together below makes the job for the bears very difficult.
The short-term charts are overbought again thus a day of selling to some degree would be best for the bulls. This would allow for more set ups on the long side without having to chase into overbought which is never the best way to go about our market business.
Financials are holding up very well although some of the froth like American International Group Inc. (AIG)is finally taking a hit and rightly so. Transports are setting up nicely in a one-month base as are many of the other leading sectors. The bulls have good reason to feel this market can climb higher still over the coming weeks. If the bears can take out S&P 500 1012, then they have some hope to being this puppy down, but it won't be easy.
The dollar is behaving very poorly right now and the usual set ups are taking place in commodity land because of it. They can use a small pullback but some very nice inverse head and shoulders are setting up on some commodity leader stocks on those 60-minute time frame charts. I would be watching that closely for a play or two in that sector.
Some day this'll all be a memory. The market will start falling hard again, but my work says that won't be happening in the immediate future. I wouldn't be out there buying long-term portfolios but I wouldn't be shorting right now either. I'd be buying into weakness at a slow but gradual pace.
There will always be set ups that don't work but buying those 50-day back tests usually do and have worked, and those seem to be best as when that's taking place, the oscillators have unwound nicely on all the important time frame charts.
Don't chase massive strength in a stock. Be smart. Don't overplay.
Mike Paulenoff, On Bulls Still in Control (MPTrader.com)
The bulls still control price direction, despite post employment and post consumer credit "bad news." In other words, the dominant uptrend remains the dominant force being exerted on equity prices. Let's notice that this morning's strength has popped prices above the past two rally peaks, which argues for still-higher prices for the S&P 500, looking at its emini futures contract, into the area of the August highs at 1035-1038 next. Only a decline that breaks 1018 will begin to compromise the still-constructive outlook.
Gary Dean, On Wave 2 Scenario Still in Play (MarketsPath.com)
The S&P 500 gapped over the 1021 pivot Tuesday morning, but wasn't able to make it up to the more important 1029 pivot. At the close, the wave 2 scenario is still in play, even if the bears have cornered themselves again. But until it is technically counted out, it is the wave count of choice for now. Wave 2's have made their fame and fortune by shaking out the traders waiting for wave 3 as well as convincing traders that the trend that was left behind with wave 1 is back in play. To put it simply, wave 2 have a habit of messing with the minds and trades of everyone, no matter what side you are on.
So the bears are cornered and they really don't have a lot of wiggle room before the hopes of P3 starting at the 1039 level gets smashed to oblivion. If they decide to take out the 1039 high, it will most likely be in the form of an extended zig zag and trade within the large rising wedge that was started in March. Once the bears can break the lower trend of this wedge, the fireworks will start on the downside.
Bottom line: The indexes can still be can still be carving out a wave 2 up, but the bears are running out of room here. They need to step in or we will be testing the highs again.
