Sunday, July 21, 2013

Focusing on Individual Stocks Now Rather Than the Overall Market

We saw the first effects of the earnings season on Friday, as misses by GOOG and MSFT knocked the Nasdaq down at the open and it stayed there for most of the session.  All in all, however, it wasn't a bad day.  The S&P and Russell 2000 held up well, and even the Nasdaq saw little selling after the open, instead moving sideways.  With as much as we have moved over the past few weeks, a gap down like that could have led to more selling, but it is bullish that it didn't.  The bid seemed to be there to support the market from underneath, which is good going forward.

There are a number of big reports coming this week and any technical analysis of the indexes may not matter much because of that.   The nine day EMA is what I will be watching in the short-term and as long as we stay above that level across the board, there isn't much to worry about in my opinion.  We are still a bit extended and could use further consolidation and rest.   However, individual setups continue to be prevalent and those individual stocks are what I plan on focusing on more over the next week rather than the likely noise and confusion we'll see on the overall markets as earnings are reported.   Below are names from my watchlist for this week.

Biotechs have been leaders for a while now and after having a strong pop early last week, many have consolidated nicely now and are setting up again.  I am seeing eight to ten names that look very interesting here.  I have grouped them into lower-priced stocks and higher-priced stocks below.

Lower-Priced Bios
 Higher-Priced Bios

Solars have also been a leading group for a while (top sector group in IBD) and acted much like the biotechs did this past week in terms of pulling back constructively and now
 setting up new potential buy points.   There are four or five that look really good to me here and I will look to trade these in the upcoming week.

CSIQ, JASO, TSL, SPWR

I don't typically buy stocks that have taken tremendous beatings but the commodity/metals/minerals sector is starting to look like it may be putting in a bottom.   I am watching for huge volume surges as a confirmation signal and as of yet, the volume hasn't been as huge as I would like to see.  If nothing else, it pays to keep these names on the watchlist as they may be nice, valuable long-term plays with little downside (but that doesn't mean you ignore stops).

Gold and Metal Stocks

Here are some random cup with handle setups for the week ahead.   LITB is a stock I am holding and will look to add to it if it can breakout to new highs, as this has good growth forecasts and the chart looks excellent.  I thought about adding on the dip Friday and am now kicking myself a bit.  Oh well

LITB, LOCK, PERI, STRZA

Other random setups that don't fit into a specific category are below.

 SFUN, TA, PRLB, ESI
 All Charts from TC2000, Courtesy of Worden Brothers, Inc.

Again, the number of setups I am seeing each night in my scans is keeping my bullish going forward, and these individual names are what I am going to focus on this week.   Earnings may make the overall market a real mosh pit of confusion over the next few weeks, but as long as charts are acting well underneath the surface, I think you have to stay bullish.  As always, if the market breaks down very hard below short-term moving averages on heavier volume, I will change my outlook, which any trader is always entitled to do.   Good luck. 

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