Good morning and welcome to a new week. We are looking at a soft open with S&P futures about 5points below fair value. It’s a good time to be cautious with QE2 in the rear view mirror, ES near the top of its hourly channel, a major fibonacci line having been tagged, as well as weekly horizontal resistance close by. Also, gold is looking toppy and we’re seeing some positive divergences in the dollar index. Aggressive traders might consider a few shorts if SPY trades below 122.20, which was the low for the day on Friday.
POZN – pharma.. could hardly muster a bounce despite the whirlwind to the upside that was last week’s market.. looking for this triple bottom to fail and targeting its 52week low
SNDA – online gaming in China.. also weak lately, watch for a failure of the uptrend line off the lows and a downside, volume laden impulse which puts it squarely below $40
BKS – barnes and noble.. not sure what’s going on here, something to do with a poison pill.. but it doesn’t matter, notice how all the recent large volume days are red.. not a good sign
MMSI – medical supplies.. $15.50 is clear support here, activity below there should be viewed as bearish, and will likely induce more selling
CPSL – china steel.. got this one from a long time friend and fellow chartist on SI.. nice move late in the day on Friday and it looks good for continuation
ICA – Mexico construction company.. watch for a breakout over $11, very nice weekly base
AEY – cable TV hardware supplier.. thin stock with great fundamentals, I think it’s pretty safe to assume this one is going higher, but I would take this trade off if it loses $3