Week of 12/10 - Game Plan
After a week of indecision last week, a few of the market sectors have begun to show their hand earlier than others. If you have followed ET lately, you have noticed that one of the most important things to take notice about is the strength of relative market sectors in a period of indecision. Last week the banks woke up, while the Homebuilders have begun to slow. The XLI’s and XLU’s have consolidated higher as well, and have been put on my radar as well. As I have said before, and will continue to say - follow the money. There is no sense in staring at the chart of Apple, when there are plenty of other stocks acting perfectly.
I am a firm believer that a true rally must include our banking institutions. So far we have seen great movement in the banks, and, combined with this controlled digestion we had last week, I see higher prices in our future. This may not happen until after the first of the year, and definitely not until the “Fiscal Cliff” has been addressed, but as long we see this controlled pull-back (and not panic selling), I think it is very constructive.
The headlines on CNBC this weekend were focused on the Obama and Boehner meeting, with sayings like "signalling progress in the fiscal cliff talks." This is also great news to the bulls, so make sure you are prepared.
Going in to next week we have some great setups across all sectors. My main focus to start the week is on Monster. On Friday MNST began to poke its head out, and closed beautifully at the end of the day. You can see from my Closing Bell on Friday that I am very bullish on this one, and believe that we can see $60 before the end of the year.
LinkedIn is also looking like last week’s consolidation is a rest for higher prices. I posted on Wednesday that a buy at 106 was a very low risk/high reward play, and if you took my advice you’re in great shape. LNKD closed very well on Friday as well, and I think we may see 116-118 sooner, rather than later.
Within the banking sector we have multiple setups and potential moves. Last Wednesday we saw BACskyrocket, and on our Closing Bell we put JPM on our watch list to see if it would follow on Thursday. We will continue to keep our eyes on BAC and JPM, while WFC and GS may potentially want higher prices as well.
One of the sectors that is oddly catching my eye as of late is the Utilities. After being completely annihilated in November, they have rebounded and held higher, much to my surprise. We posted onFriday the top holdings in this ETF, and they are all on my watch list. 35.60 is going to be resistance for a while, but if we can get thru and hold above I think we will have a lot of interesting set ups going into 2013. One of my favorite setups is EXC. Exelon took one of the hardest beatings in this fund, and, if it can hold 29, we have a very low risk/high reward play here. A buy at 29, with a stop at about 28.30 or so, has tremendous upside if the XLU's can grind higher. For now I'm keeping it on my watch list, but I am not going to get too greedy as of yet.
Another breakout sector to watch next week is the industrial's. The XLI's closed at the highs on Friday, and 37.50 may finally get broken this week. Within this sector, and also on our watch list, we have CAT, GE, CMI (potential for 110), BA, and HON (look for all-time highs at 64ish) - just to name a few.
Overall, I still remain bullish on the market as a whole. I would like for the SPYs to hold 141.80 this week, but we'll see what happens. Trade the price and the tape, not the news. As always stay prepared, stay focused and be disciplined. Trade where the money is, and don't trade out of boredom. Goodluck this week! And, as always, I love to hear feedback so please find me on Twitter or shoot me an email.
I am a firm believer that a true rally must include our banking institutions. So far we have seen great movement in the banks, and, combined with this controlled digestion we had last week, I see higher prices in our future. This may not happen until after the first of the year, and definitely not until the “Fiscal Cliff” has been addressed, but as long we see this controlled pull-back (and not panic selling), I think it is very constructive.
The headlines on CNBC this weekend were focused on the Obama and Boehner meeting, with sayings like "signalling progress in the fiscal cliff talks." This is also great news to the bulls, so make sure you are prepared.
Going in to next week we have some great setups across all sectors. My main focus to start the week is on Monster. On Friday MNST began to poke its head out, and closed beautifully at the end of the day. You can see from my Closing Bell on Friday that I am very bullish on this one, and believe that we can see $60 before the end of the year.
LinkedIn is also looking like last week’s consolidation is a rest for higher prices. I posted on Wednesday that a buy at 106 was a very low risk/high reward play, and if you took my advice you’re in great shape. LNKD closed very well on Friday as well, and I think we may see 116-118 sooner, rather than later.
Within the banking sector we have multiple setups and potential moves. Last Wednesday we saw BACskyrocket, and on our Closing Bell we put JPM on our watch list to see if it would follow on Thursday. We will continue to keep our eyes on BAC and JPM, while WFC and GS may potentially want higher prices as well.
One of the sectors that is oddly catching my eye as of late is the Utilities. After being completely annihilated in November, they have rebounded and held higher, much to my surprise. We posted onFriday the top holdings in this ETF, and they are all on my watch list. 35.60 is going to be resistance for a while, but if we can get thru and hold above I think we will have a lot of interesting set ups going into 2013. One of my favorite setups is EXC. Exelon took one of the hardest beatings in this fund, and, if it can hold 29, we have a very low risk/high reward play here. A buy at 29, with a stop at about 28.30 or so, has tremendous upside if the XLU's can grind higher. For now I'm keeping it on my watch list, but I am not going to get too greedy as of yet.
Another breakout sector to watch next week is the industrial's. The XLI's closed at the highs on Friday, and 37.50 may finally get broken this week. Within this sector, and also on our watch list, we have CAT, GE, CMI (potential for 110), BA, and HON (look for all-time highs at 64ish) - just to name a few.
Overall, I still remain bullish on the market as a whole. I would like for the SPYs to hold 141.80 this week, but we'll see what happens. Trade the price and the tape, not the news. As always stay prepared, stay focused and be disciplined. Trade where the money is, and don't trade out of boredom. Goodluck this week! And, as always, I love to hear feedback so please find me on Twitter or shoot me an email.