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Market Quiet Again After Gap Up

John Darsie

"Gap and nap" continues to perfectly describe the action we are seeing in the 2013 Summer market. Since bottoming out on June 24th, the market has staged an impressive comeback to reclaim its 50-day moving average and nearly reclaim the uptrend that was broken on June 20th. The shocking aspect of the snap-back, though, is that almost none of those gains have come intraday. The bounce has consisted of a series of gap ups followed by doji candlesticks, and that's exactly what we got today. The S&P finished up 0.53% thanks to those pre-market gains.

In a market that has been lethargic intraday, traders have increasingly turned their attention to high beta stocks. Volatility has not seeped out of all corners of the market, with many of the hottest names of 2013 continuing to provide movement.

3-D printing sector leader ExOne (XONE) continues to soar, and is almost near a parabolic phase. The stock, which has been a favorite of T3 Live contributor Steve Levay, tacked on another 7.05% of gains today thanks to a gap up and late-day rally. There could be an exhaustion squeeze left in XONE, but it's hard to chase at these levels. There should be two-way opportunity in the stock, however, for the foreseeable future.

Today at Noon ET T3 Live contributor Marc Sperling distributed his first "Trade Idea of the Week" newsletter highlighting a compelling long set-up in Netflix (NFLX), and the stock staged an afternoon rally to finish on a strong note. Netflix has been building an upper level base since its most recent earnings to allow moving averages to play catch-up, and now looks like it could be ripe for a squeeze to the upper end of the range. Opt-in to "Marc Sperling's Trade Idea of the Week."

Last week Tesla (TSLA) pushed to new all-time highs, and looks like it might have some room left to the upside. Hte heavily shorted stock was somewhat quiet today, but the fact that it is holding up at these new highs is a positive sign. Watch the pivot high of $121.89.

The other Elon Musk stock, SolarCity (SCTY) had an even better day, surging 7.67%. SCTY looked poised for a big squeeze early last week, but couldn't build on Monday's igniting bar. Today, though, it broke back above that pivot high and it looks like that short-squeeze may come to fruition after all.

There were also some select low-beta names that showed impressive relative strength today.

Wells Fargo (WFC) has been mentioned positively in recent Morning Call videos and Off the Charts newsletters, and today it broke out of a two-month base. WFC is typically one of the lower-beta bank stocks, but showed momentum today on its way to a 1.81% gain. The overall profile of WFC is attractive across all time-frames, in my opinion.

*DISCLOSURES: Scott Redler is long SCTY, KNDI, TBT, FB, BAC. Short SPY.