To kick off last week, we saw a big Monday morning gap down that threatened to trigger fear and send the market into a temporary tailspin. Over the next three days, the indices threatened to break lower but held on for dear life, and in the meantime leading stocks started to act a bit better. This was the opposite trend from what we had seen during the weeks prior, as the indices held up decently well and while leading stocks got hit hard. That action gave us clues that the market could bounce from in that hole, and that is what we are seeing this morning with triple digit gains already in the Dow.
Today’s gap up, triggered by optimism over a Greece bailout, will start to take us out of the May descending channel, which is often a very bullish pattern. The Russell has shown relative strength and gave clues on Friday that it was itching to go. A close above 1340-1342 in the S&P should resolve this descending channel, and would qualify us for the follow-through for IBD to put us back in a confirmed rally.
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We started to see some good long action in the Tech sector last week.
Netflix, Inc. (NASDAQ:NFLX) showed relative strength all month long, indicating it would be first to go higher when the market firmed up. Talk of increasing partnership with Facebook was the catalyst for a move through our $250-255 new entry. It’s at historic highs for today.
salesforce.com, inc. (NYSE:CRM) acts very well since earnings and remains a leader in the cloud group. With the stock at all-time highs, watch Thursday’s high as a point of reference.
Riverbed Technologies, Inc. (NASDAQ:RVBD) has been a bit more sluggish, but above $39 can get this stock to start acting a bit better. It is always one of IBD’s top ranked growth stocks.
VMWare, Inc. (NYSE:VMW) is also in the best acting tech camp. It’s a bit choppy but ultimately should get and stay above $98-99.
Apple Inc. (NASDAQ:AAPL) pattern is getting more constructive. It started to perk up Friday and is set for a nice up open this morning. The next area to watch are these moving averages in the $342-345 area. The Ultimate test will be the upper descending trend line that now stands around the $349-351. This stock is a must own for any longer term player, but traders can also trade it technically for cash flow.
Amazon.com, Inc. (NASDAQ:AMZN) held an important level in the $191-192 support zone and has a small pivot at $196 that could ignite a back above $200.
Baidu.com, Inc. (NASDAQ:BIDU) triggered long Friday through the $132-$133, and there isn’t a ton of resistance now until $141-143.
SINA Corporation (NASDAQ:SINA) was also a nice targeted long Friday as it broke above $115.50 and now could easily see $127-130. This one looks great for a swing long as it appears we have seen some accumulation over the past few weeks.
Google, Inc. (NASDAQ:GOOG) still acts very poorly but has a lower pivot support to trade against. It has a bit of room back to $530 but hard to get excited about it.
Priceline.com, inc. (NASDAQ:PCLN) saw a decent correction from the earnings, and now seems like it can bounce back to $520ish.
The agricultural group is looking great on the back of several big upgrades over the last two weeks. Well, we are getting a few more this morning. Citi has upgraded PotashCorp./Saskatchewan (NYSE:POT) and The Mosaic Company (NYSE:MOS) over the weekend, saying fundamentals have strengthened. UBS also added POT to its most preferred list this weekend.
Technically, CF Industries Holdings, Inc. (NYSE:CF) has lead the way, igniting above $144-145 and now it’s at new highs. With these upgrades, this one should see some residual benefit and continue to run.
POT now looks poised to tackle its long-term downtrend much like CF has already done, and it should be at new highs within a month.
MOS has been a laggard and has a more ominous downtrend to contend with, but it should also get a big boost with this news. New highs might take more time, but I wouldn’t rule it out.
Oil Service HOLDRs ETF (NYSE:OIH) gave a nice entry at $150.50-151 last week, and it now has some room to $156-159.
Halliburton Company (NYSE:HAL) gave a nice move back to old highs, showing it can be done. It needs to get above $51-52 to really get frisky.
Schlumberger Limited (SLB) is trying to play a little catch-up, but not compelling.
The iShares Silver Trust ETF (NYSE:SLV) is still on the move since breaking above $35. It hit the first target around $37, and the next resistance is $38.24 to $39.26. I would be very skeptical about buying silver into this big gap up, and would be more inclined to take profits and nibble on a little short.
The SPDR Gold Trust ETF (NYSE:GLD) also acts well since triggering around $146, now the $150-151 will be tough.
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. T3LIVE.com 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 BAC, POT, SINA, AAPL, BIDU. Short SPY.
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