Futures are off a bit as most World Markets are basically up or down small. Yesterday we had an inside day as markets try to digest above the most recent breakout. If we can continue to digest above S&P 1698-1702 (SPY $169.85-170.05ish) it would keep the current complexion intact. I wouldn't change much unless we get a potent break and close below the above area. It never hurts to do a little less in August, especially after the big 5%+ move we saw in July on top of the monster move we've seen for 2013. Yesterday we had the lowest volume session of the year, a preview of what could be a slow August.
In today's Morning Call we will highlight a few stocks that gapped up after earnings and are digesting well and have potential for future movement. Recent examples are the two-three day consolidations we saw in Apple (AAPL) and Facebook (FB) before continuation. I wouldn't expect the same speed, but the below stocks are worth having on the radar.
LinkedIn (LNKD) had a big gap from $213.48 to $228.80 on Friday after the stock reported solid earnings. It held above this gap well yesterday. As long as it continues to hold this gap at $228.80, we could see some continuation to the upside in the next few sessions. A resistance pivot to watch is $237.96.
American International Group (AIG) also gapped up on Friday after beating its earnings estimate to break above the intermediate resistance of $47.68. It did filled a portion of this gap on a pull-back on Friday, but still held above the breakout level. Yesterday buyers held this level. The longer it bases up here, the higher the probability we could see another leg higher above $49.50.
Viacom (VIAB) saw a nice run up into its earnings as it held above the 21-day moving average for the whole month. Then it got a lift on Friday after the media company reported a 20% jump in fiscal third quarter earnings and doubled its share-buyback program to $20 billion. The stock had a nice gap up on Friday and digested this gap well yesterday. Some consolidation above $77.95 could bring in more buyers to lift the stock higher. Pivot resistance is $79-81.
Sodastream (SODA) gapped up on Wednesday last week after beating its earnings estimate and is holding above the gap well. Yesterday it retested this gap support at $64ish and held. Active traders could use $64 as the new pivot to trade against. Above $66.90 we could see another round of short squeeze as the current short interest is 46.30%.
VMWare (VMW) has a decent set-up digesting above the earnings gap of $79.41. The 8-day MA just played catch-up. It needs to get and stay above $84ish for potential continuation.
In today's Morning Call we will also take a look at Marc Sperling's Trade Ideas of the Week to this point. We've been doing this for five weeks. You could subscribe to the free newsletter, which is sent out every Monday morning, at t3live.com.
Netflix (NFLX) was featured as Marc Sperling's Trade Idea of the Week on July 8 with two action prices of $227.47 and $235.88 and a target range of $250 - 260. The stock saw an impressive move that week and went as high as $270. The it saw a controlled pull back into $240 area where it continued to find some support for the last two weeks. Yesterday the stock shrugged off a negative article from Barron's pretty well as it rallied 11 points off lows. Look for potential upside follow-through above $253.90.
First Solar (FSLR) was Marc Sperling's Trade Idea of The Week on July 15 with an action price of $47.65. The stock triggered above this level and went as high as $51, but after that it failed to get momentum above this level. FSLR has been hovering around its flattening key moving averages. The longer it holds above $46.30 recent pivot low, the higher probability we could see some upside momentum. This support is also the last line of defense to keep the intermediate-term bulls interested.
Noodles & Co (NDLS) was highlighted on July 22, with action price of $43.38 and target range of $48-52. The stock got some momentum and went as high as $45.95 on that Monday. After that, it took a while for NDLS to get to this target range, but it did get some momentum this week and went as high as $49.15 yesterday. This is a new IPO that is a little bit thin, but it's worth keeping an eye on.
Green Mountain Coffee (GMCR) was Marc Sperling's Trade Idea of the Week last week, July 29. It has acted well as it triggered listed buy price of $76 and almost reached his target range of $83-85 after a potent move to break out of the mid-level base yesterday. It also reversed after a negative Barron's article over the weekend. With this type of move that would take multiple days to work out, it's best to look for a calculated entry and use some patience to wait for the trade to work itself out.
Pandora (NYSE:P) was featured as Marc Sperling's Trade Idea of the Week yesterday as it has an upper Cup and Handle pattern in place that looks potentially poised to trigger a move higher above his action price of $19.32. The stock got some upside action yesterday and gained 1.67%. Look for potential continuation as the trade is in motion. His target range is $21.50-22.
Apple (AAPL) continues to act very well as it tacked on another 1.5% of gains yesterday. It has reached the next resistance level of $470ish. It does look a bit extended on the daily chart. The stock looks good and has room to the 200-day at $475.35 but some type of digestion/pull-back would be healthy.
Google (GOOG) is trying to build some support above $896-900. For it to get some momentum again, it needs to trigger and close above $907ish.
Facebook (FB) had an awesome move through earnings, and it was also tradable after. It could use a few days of rest.
Tesla (TSLA) had a nice gap and go yesterday to build on last week's strength. The stock gained another 4.84% yesterday. Active traders have a new point of reference at $144.89 (yesterday's high) to trade around. It did reach the lower end of the $140-160 area I mentioned on theStreet.
Solar City (SCTY) triggered our action area long price of $42.80 listed on the Price Point Sheet yesterday to break out of the recent tight range and went as high as $45.49. The stock closed above prior pivot high of $44.98 showing relative strength. Look for upside follow-through above yesterday's high of $45.49.
ExOne (XONE) perked up a bit yesterday after basing around its 8- and 21-day MA for a few sessions. A move through yesterday's high of $64.88 could set it back in motion. Next pivot resistance is $67.14.
Visa (NYSE:V) had a nice move off of the morning's lows of $182.80 to go as high as $185.14 and reclaim its 50-day moving average. The stock had a potent down move on Wednesday last week due to fears about debit fees limit. On Friday, the stock got some upgrades and closed well off of lows. It has done a great job erasing the losses from Wednesday. Keep this trade on your radar as it could see some continuation above $185.14, and it still has lots of room to the upside.
Metals had a decent move off the capitulation lows back on 6/28. Gold (GLD) went from the RedDog Reversal low of $115.65 up to $130ish. It started to break the upper flag and now it's not compelling for quick action. When it closed below $127ish most active guys like me became uninterested. The $122.73 level could be worth a look if it sees it.
Although we all want to make money and have things to do" in August, if the market is going to be as quiet as it was yesterday, your time would be better spent on the beach or in the mountains spending quality time with friends. We will continue to look for stock specific action, but less is more when the market is thin.
*DISCLOSURES: Scott J. Redler is long GOOG, NFLX, GE, C, BAC, SODA, VMW. Short SPY.