Week in Review
DJIA +3.76 (+0.03%); to 13,025.58 S&P 500 +0.23 (+0.02%); to 1,416.18 NASDAQ -1.79 (-0.06%) to 3,010.24;
Friday’s action was another consolidation day just below the 50 Day SMA. The entire range for the day was 8 S&P points and while the index closed higher, we spent the majority of the day down.
Stocks of the Day today included Advanced Micro Devices, Inc. (AMD). Finally bouncing off very depressed levels, this has been a name we have featured as a Trade Idea. There was news that the company plans to sell its Austin, TX campus but this rally seems more like en and of year bounce on an extremely oversold name. We posted on StockTwits that we moved stops up on the name and traders might want to consider taking some off.
Also making news today was Facebook (FB) and Zynga (ZNGA). The two disclosed that they have changed the terms of their partnership. Under the new agreement, Facebook will be able to develop its own games and Zynga will not have to use Facebook ad units or payments on its outside sites. Wall Street initially diagnosed this news as worse for ZNGA and while the shares recovered, ZNGA still closed down over 6%. I will have to start doing some work on ZNGA, this could provide an overblown sell off but I have to say the name would concern me and would only be a spec play. The CEO also departed and the company will likely need a brand new strategy going forward.
Also in the news and the most ups list if you were checking were Christoper & Banks (CBK), up over 24%, to $4.57 and Five Below (FIVE), up over 18%, to $37.15 after their quarterly reports came in above the Street’s expectations.
Week in Review:
This week the market itself was somewhat boring especially when compared to the week before but I think for the Bull it has been positive that they markets have not lost the gains earned during a shortened low volume Holiday week of trading.
Monday’s stock of the day was Ebay (EBAY). Based on the rumors of a strong Black Friday and weekend (especially online) and then moving into Cyber Monday, EBAY’s PayPal was anticipated to be doing great business. More impressive was EBAY being able to hold Monday’s gains and drift higher throughout the remainder of the week. I would be very suspect on new longs in EBAY now but after we get some pullback we can then re-assess the situation and possibly get a nice pattern to trade.
Tuesday’s big move was Monster Beverage (MNST) up over 13%. A letter from the FDA to Dick Durbin noted that they will be conducting an investigation into the potential danger of MNST products. Doesn’t sound good then why go up? Because they also noted in that same letter that they do not see any issue with the two main additives of MNST’s drinks. MNST was flat after that large move but could just be consolidating for another push. Longer Term MNST was on my radar but wasn’t at a trigger point yet. I will still monitor the name but I will need to see corporate developments or lower prices to peak my interest.
Wednesday is a no brainer to me although it was a nice up day for the market in general and many names were higher, the day belonged to Green Mountain Coffee Roasters (GMCR) which gained over 26% on earnings that crushed analyst estimates and followed up by providing guidance also above the street. A name I wish I was in before the earnings but I often hesitate to initiate a new position before earnings. If I have a name I like I will hold into earnings but new positions I tend to wait for earnings, especially in very beaten names because you can often get a reaction that marks bottoms. Even with this gap, GMCR remains on my list and one I will be watching for additional opportunities.
Thursday’s action seemed dominated by Congressional speak and how the talks of the fiscal cliff are going. I lamented that the more congress speaks, the less I want to own and I truly meant that. The problem becomes, fundamental and technical work go out the window when headlines rule the day. Trading/investing have enough unknowns, I don’t need/like when a comment or two can cause real losses and “muddy” the picture. In Thursday’s recap we highlighted some comments our of Goldman on RIMM, KMX and INTC. We are going to try and do more analyst breakdowns with charts and levels. To review what we wrote CLICK HERE.
From the Event’s Calendar for Next Week:
12/3/2012 9:00 AM Final Manufacturing PMI
10:00 AM ISM Manufacturing PMI
10:00 AM Construction Spending
10:00 AM ISM Manufacturing Prices
12/5/2012 8:15 AM ADP Non-Farm Employment Change
8:30 AM Revised Nonfarm Productivity
8:30 AM Revised Unit Labor Costs
10:00 AM ISM Non-Manufacturing PMI
10:00 AM Factory Orders
10:30 AM Crude Oil Inventories
12/6/2012 7:30 AM Challenger Job Cuts
8:30 AM Unemployment Claims
10:30 AM Natural Gas Storage
12/7/2012 8:30 AM Non-Farm Employment Change
8:30 AM Unemployment Rate
8:30 AM Average Hourly Earnings
9:55 AM Prelim UoM Consumer Sentiment
9:55 AM Prelim UoM Inflation Expectations
3:00 PM Consumer Credit 10.0B
Major averages 5 day results:
Dow Jones Industrial:
S&P 500:
Nasdaq:
The first chart is from last weekend, a potential inverse head & shoulders on the 60 minute index chart, which has targets as high as 1434 on the S&P 500 cash index. Second chart is an updated 60 min with changed fibs but orange line is the 200% fib from the older chart. Lastly, an updated Daily S&P 500 cash showing the trading between the 50 and 100 day SMA’s. This week I have spent my time highlighting potential spots for taking profits on the great trade ideas of late and also editing the stops to reflect current trading and technical patterns. This has been because the risk, in my opinion, is greater today than it was on 11/16 and now the market could choose to do some back and fill. I will be entering this week somewhat cautious, not bearish, but definitely noting resistance and pattern targets right around here and not interested in forfeiting well earned gains.
