Morning Call: Market Looks to Continue Strong Finish to Q2

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June 30, 2011 8:14am NYSE:OIH

The markets have had a very nice three-day move into the end of Q2, and futures are set to open higher once again this morning. While the rally started in earnest this week, the importance of last Thursday’s reversal cannot be understated. Up to that point, leading stocks had been getting hit much harder than indices, which is decidedly bearish action. Thursday, those leading stocks began to perk up, and we

got a snapshot of stocks to watch if the market could sustain a bounce. While the bounce took until this week, we have seen some ferocious moves.

Now, after three strong up days, what is a trader’s next move? At this stage, it would be foolish to chase this rally. Most stocks went from at or just below 200 day MA back to their 50day, and some of those that were holding well their 200 are making new highs on the year. SPY’s are coming into some major resistance here. The 50day is around $131.89 I would use this zone to sell against and potentially short more, I started with a couple shorts yesterday. Moving forward we will see how we hold up with our retracement rules to see if this market move can be sustained.

Most stocks we’ve listed in the last week have all had 5-15 point moves so now is not the time to be aggressive. I see no tight patterns to list, most are extended and profits should be taken. Hopefully over the next couple weeks we can build a tight range to potentially buy breakouts. A pick up in economic data would be a welcome boost.

As far as our go to list over the past week, here are some names we have been following closely. Apple Inc. (NASDAQ:AAPL), Inc. (NASDAQ:AMZN), Netflix Inc. (NASDAQ:NFLX), Inc. (NYSE:CRM), and VMWare Inc. (NYSE:VMW) have been some of the best acting tech stocks, especially Amazon which has traded very well since its last earnings report. Further investment in the cloud has investors feeling optimistic about Amazon’s future.
The Chinese names are starting to heat up after a slew of analysts have come out defending the sector. Inc. (NASDAQ:BIDU) has held in strong. SINA Corporation (NASDAQ:SINA) has also been a nice catch-up play. Even the real dogs, Inc. (NASDAQ:YOKU), Ecommerce China DangDang Inc. (NASDAQ:DANG), and Renren Inc. (NASDAQ:RENN) have been able to bounce a bit.
Lululemon Athletica, inc. (NASDAQ:LULU) has been very strong, making new highs as the company struggles to keep the shelves stocked. It’s become a cultural phenomenon, and the stock is acting accordingly. Under-Armour Inc. (NYSE:UA) has also become extremely popular as athletic sportswear, and the stock continues to act well just off highs.
Two restaurant stocks Chipotle Mexican Grill, Inc. (NYSE:CMG) and Panera Bread Company (NASDAQ:PNRA) have also acted well, with CMG at new highs and PNRA just off them.

New favorable debit card rules provided an enormous boost for MasterCard Incorporated (NYSE:MA) and Visa Inc. (NYSE:V), with the latter jumping 15% after the announcement from the Fed yesterday afternoon.

Oil Service HOLDRs ETF (NYSE:OIH) had a nice move back to the descending trend line around $149.50-150, but it could be tough for it to bust through there before some rest.
Gol had a small bounce, but $1520-$1530 will be a tough spot to get through at this stage.

Scott Redler
Scott Redler is the Chief Strategic Officer of T3 Live. He develops all trading strategies for the service and acts as the face of T3 Live. Mr. Redler focuses on thorough preparation and discipline as a trader. Scott Redler has been trading equities for more than 10 years and has more recently received widespread recognition from the financial community for his insightful, pragmatic approach. He began his career as a broker and venture capitalist where he was able to facilitate relationships that led him into trading. Beginning his trading career at Broadway Trading in 1999, Scott moved on with Marc Sperling to Sperling Enterprises, LLC after establishing himself as one of the best young traders in the firm. As a manager at Sperling Enterprises, he maintained his status as a top trader in the industry while working closely with all traders in the firm to dramatically increase performance. Scott has participated in more than 30 triathlons and one IronMan triathlon, exhibiting a work ethic that also defines his trading. His vast knowledge and meticulous attention to detail has led to regular appearances on CNBC, Fox Business and Bloomberg, and he has been quoted in the Wall Street Journal and Investor’s Business Daily among other publications. Scott produces much of the media and content available to subscribers and followers. is an online financial media network and education platform that provides active traders and investors with market analysis, real-time access to strategies, and in-depth training from real traders, real-time.

*DISCLOSURE: Scott Redler is long BORN, BAC, WFC, JPM, DANG, AXTI. Short SPY, BIDU.

This material is being provided to you for educational purposes only. No information presented constitutes a recommendation by T3 LIVE or its affiliates to buy, sell or hold any security, financial product or instrument discussed therein or to engage in any specific investment strategy. The content neither is, nor should be construed as, an offer, or a solicitation of an offer, to buy, sell, or hold any securities. You are fully responsible for any investment decisions you make. Such decisions should be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance and liquidity needs.Visit the T3Live Homepage, Virtual Trading Floor, and Learn More About Us.

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