The SPX chart continues to be a mess, but I see signs of hope. A lot of technicians were looking for the 1065 range and that exactly what we got. I believe we even got below 1064 temporarily. What I find encouraging is the fact that we closed above 1070. There are support levels here and I’m hoping will create more long buying opportunities – there are a lot of oversold stocks. Don’t get me wrong, the market is still not pretty and another leg down is very possible. We need support here Monday, or I’ll definitely lose some of my optimism.
Monday morning, we start off the day with the Housing Market Index – It will probably suck and I don’t expect it to move the market much to the down side as expectations are low. Tuesday we’ll follow up with the Housing Starts numbers. Keep an eye on this segment for scalp opportunities. Also on tap – durable goods numbers, jobless claims and a revised look at second quarter GDP.
There are three approaches I’m considering this weekend in preparation for the start of a fresh week.
- Find sectors/stocks over bought
- Find sectors/stocks over sold
- Find sectors/stocks with strong momentum on Friday and look for continuation
- Find stocks technically setup for moves.
That’s a lot to swallow normally I wouldn’t have time to look for all. But, I’m going to give it a shot.
In this blog, I’m going to focus on #3 – sectors/stocks with momo on Friday. If we see decent market action, many of these may add to gains and put some scalping profits in my pocket.
Here are a look at Friday’s best performing sectors and some possible setups for Monday.
Semiconductor design: CDNS, LAVA, and MENT. As you may know, I’ve been a fan of swinging and scalping MENT for some time. Prices are approaching the top of the channel, however, so I’m not looking for an entry here. You might want to look at LAVA continuation
Data Centers/Distributed Networks: Led by AKAM – this stock is an animal and great swing candidate on pullbacks. Will need to hold 46.69 to maintain bullish direction. I don’t have a good entry here, but I would definitely like to see it closer to SMA50, if possible.
TMRK is interesting here, as well. MACD is trying to make a bullish comeback on congested price action. The swing long play would be an entry above SMA50 with volume. I’m not interested in holding under SMA100.
Wireless Software Stocks: This sector faired well yesterday led by OPWV and TSYS.
OPWV saw a big move Friday after a little positive press. I love the MACD and rounded Full Sto. If I can get this under 1.70, I’m likely a buyer. Gotta be careful here – could just be a one day news pump. Tight stops.
TSYS is tempting here, as well. There is some resistance at 3.50, but open doors above.
NUAN – the sector volume leader, is following a similar trend and could be looking at a gap fill soon.
Specialty Semiconductors: This sector had a very strong Friday, so we’ll want to watch closely for some continuation from some of the following names. They are all generally sitting in a consolidation pattern after strong selloffs.
BRCM took a major fall recently and is now holding on to SMA200. Another possible swing setup with SMA200 stop. Lots of room to the upside.