Bear Flag + Neck-Tie Salesforce.com, inc. (NYSE:CRM) Alert
There is a classic multi-factor trade setup on salesforce.com, inc. (NYSE:CRM). Current price has fallen below the 50 and 20 daily moving averages. Price has consolidated below those two moving averages in a near-perfect bear flag formation. There is a neck-tie of the two moving averages right above price creating a strong trigger to further downside. This setup has a high reward, low risk with a tight stop on it. As long as price does not close above the two moving averages at $103.35, short. With current price at $102.70, this is a tiny risk of $0.60. On the reward side, if price declines, it could fall at least to $98.00 as a first target, then potentially as low as the daily 200 moving average at $93.00. The risk/reward here is optimal.
Crude oil continues to climb higher as global economic optimism increases and instability in the Middle East continues. Anti-government protests in Iran have helped push oil above $60 per barrel. Considering economic optimism is likely at/near a high and U.S. production is increasing with the price of oil, the pivot high from 2015 at $62.00 is likely a good short opportunity. I expect a pull back off $62.00 back to the $55.00 level of support.
This morning, the leading defense companies are not participating in today's early rally. Stocks such as Lockheed Martin Corporation (NYSE:LMT), Northrop Grumman Corporation (NYSE:NOC), Raytheon Company (NYSE:RTN) and General Dynamics Corp (NYSE:GD) are all falling by more than 1.0 percent today.
LMT is a now falling into support for a possible day trade at 317.50. The stock has a rising 200 moving average on the hourly chart at $317.26. This area should also be more support for the stock when initially tested.
Epic Bear Flag On Toll Brothers (TOL) Signals Major Downside
Shares of Toll Brothers Inc (NYSE:TOL) are in trouble. The technical chart has one of the most powerful bear flag formations I have seen in the last year and it is likely near a major breakdown. The next wave of selling will be more powerful than the first, likely sinking Toll Brothers Inc as low as $40 before investors can start nibbling. The fundamental reason should be discussed as well. With the new tax plan in effect, home prices in many higher net worth states like California, New York and New Jersey will be dropping an estimated 10% or more. In addition, buyers in these higher end home states may think twice about buying, maybe even deciding to move to lower state income states. It is naive if investors think that a higher end home builder will not see an effect from this new tax plan killing off the SALT deduction.
The performance in 2017 on Chipotle Mexican Grill, Inc. (NYSE:CMG) was nasty. However, that might benefit the stock in early 2018. The reason I saw that is that sellers were dumping shares in late 2017 to offset capital gains and reduce taxes. Essentially, if an investor was going to sell, they would have done it in 2017 to save money. That limits the amount of sellers in early 2018 (as long as there is no new bad news). The valuation of Chipotle Mexican Grill, Inc. is now actually semi-attractive, especially with the P/E expansion that has taken place on the S&P 500. Lastly, Chipotle Mexican Grill, Inc. did not make a new 52 week low in the last month even with those tax loss sellers. Instead, the stock filled a major support gap fill and is holding it nicely. These factors have me positioning for a bounce in early 2018.
Biotech Stock TESARO (TSRO) Falls Sharply But Major Level Emerges
Shares of TESARO Inc (NASDAQ:TSRO) fell nearly 10% on the first trading day of 2018 after some bearish chatter. The stock has fallen from nearly $200 in early 2017 to its current price point of $75.00. However, I am putting this on my Buyers Watch List because of a major support level between $66.00 and $65.00. At this current rate of decline, TESARO Inc could hit this target by level within a week. I want to be ready to buy. The buy level comes from dual major pivot highs from 2015. There will likely be a major bounce from this level, possible 30-50%. A target of $100 is not outlandish.
Airline Stocks Come In For Landing, Watch This Day Trade Level
This morning, most of the leading airline stocks are selling off to start the session. Traders should now watch American Airlines Group Inc (NASDAQ:AAL) for support around the $51.90 level. This area should be solid support for an intra-day bounce. Other airline stocks in play today include Delta Air Lines, Inc. (NYSE: DAL), United Continental Holdings Inc (NYSE:UAL), Southwest Airlines Co (NYSELUV) and JetBlue Airways Corporation (NASDAQ:JBLU).
Is Dean Foods Co (NYSEF) Finally Flashing A Buy Signal?
Leading food and beverage company, Dean Foods Co (NYSE: DF), has been one of the worst performing stocks of 2017. This stock peaked out in January 2017 at $22.31 a share. Today, DF stock is trading around $11.57, this shows you how beaten up the stock got last year. Traders and investors should now note that the stock finally looks attractive on the charts. The current pattern is forming a bullish consolidation set-up. This chart structure is signaling upside to around the $13.00 level.
Full Disclosure: Nick Santiago owns call options in Dean Foods Co.
On Watch J C Penney (NYSE:JCP) Hammers On Major Breakout Level
Shares of J C Penney Company Inc (NYSE:JCP) are once again hammering on the major resistance level of $3.75. This is now the 3rd time the stock has pushed up into this key level and all eyes are on it. If J C Penney Company Inc breaks through, upside will quickly see a target of $4.70. Odds do favor a breakout based on the multiple times the stock has tested the $3.75 level. The more a stock tests a level, the weaker that level becomes. In this case, the resistance level is weak and with analysts predicting a 20% jump in earnings from retailers because of tax reform, a breakout is likely. To confirm the breakout, look for any technical daily close above $3.75.
This Is Where Intel Corp (INTC) Becomes A Swing Trade Buy
Shares of Intel Corp (INTC) are being slammed today after reports emerged that the chip-maker has a serious security flaw in their chips. This potentially stretches back 10 years. With the stock down 6% on the day, investors are curious at what price, Intel can be bought. Based on the chart, a major gap fill is likely the downside target for a buy/bounce at $41.35. This is the level that offers the best support with the lowest risk versus reward. This is just a swing trade, so don't get married long term to Intel Corp.
Did Alphabet Inc (GOOGL) Just Top? Watch This To See
Shares of Alphabet Inc (NASDAQ:GOOGL) surged to all-time highs in early trading today. However, by lunch-time, the search giant had faded, up less than a half-percent. The pull back created a bearish topping tail on the daily chart and may signal a near-term top for the stock. Investors need to put this on their watch list and follow it into the market close. Should Alphabet Inc close with a topping tail, it becomes a strong short and will likely pullback sharply. These technical chart signals are important, as they are the only thing that can give investors an edge on when a stock like Alphabet Inc is set to pull back.
Oil ETF $USO Hits Major Double Top, Finally Becomes A Pull Back Trade
Shares of the United States Oil Fund LP (NYSEARCA:USO) finally hit a double top at $12.42, correlating perfectly with the $62.20 major pivot high on crude oil from 2015. The odds now favor a pull back in crude oil for the next week or two. Look for a retrace back to maybe as low as $55.00. If that happens, the $USO could see $10.50 or lower. Playing this with the 2x short ETF $SCO.
Diana Shipping Inc. (NYSESX) Breaks Out As Global Growth Surges
Talk to any economist or analyst. They all say global growth is surging. If that is true, the best investments (that have not already run over 100%) may be the shipping stocks. These left-for-dead names may be starting to breakout. Take a look at Diana Shipping Inc. (NYSESX). This shipping stock has just broken out on the daily chart. If the breakout continues, the first target is $5.10, second target is $6.20. Other shipping stocks should be on your radar as well. Remember, as global growth jumps, shipping rates will jump as well. Earnings could swell in a major way in the coming year for these companies.
KB Home (NYSE:KBH) Soars On Earnings, Here Is The Target
Shares of KB Home (NYSE:KBH) jumped sharply higher after reporting better-than-expected earnings and upped guidance for the coming year. The home builder saw its stock jump over 11% in trading on Thursday, moving above the $38.00 level. With KB Home stock up almost 100% since September, investors are wondering if now is the time to take profits and possibly short. Based on chart analysis, the target for this current move is $41.00. In other words, there is still another almost $3.00 upside before the risk/reward is in the seller's favor. I will be looking at this $41.00 level for a short.
There is no question that Bitcoin (BTC/USD) might be the hottest thing to hit the market place since the Dotcom boom in the late 1990's. Traders should note that Bitcoin put in a high pivot on December 16, 2017 at 19,891.00 a coin. Since that peak Bitcoin has been very choppy and volatile with everyone under the sun opening a crypto-currency account. There are two key support levels that Bitcoin traders should know in the near term. The first one is the 11,160.00 area. This level was defended on December 21, 2017 when Bitcoin plunged lower. Often, levels that held up on a sharp decline will be defended again when initially tested. The next major support level will be much lower for the popular crypto-currency, it is around the 7,600 level. I will be watching these levels closely over the coming weeks as there will be opportunities for the patient trader that does not fall victim to Bitcoin hype.
Tesla Inc (NASDAQ:TSLA) has been trading in a bearish consolidation pattern for the last few months. Every time the stock tags the upper band of the consolidation pattern it is a dead on short. In addition, eventually this bearish pattern will collapse. This puts it in a ripe spot for a short as a near-term trade and a long-term trade. The trigger would be a tag of $355.00. Keep a stop at any close above the all-time high of $389.61 and a downside target price of $240.00.
Riot Blockchain (RIOT) Fills MAJOR Gap As Stock Likely To See 25% Bounce
Riot Blockchain Inc (NASDAQ:RIOT) filled a major gap at the $16.00 level today. This was the biggest point of support yet on the crypto-hyped stock and a great buying opportunity. Based on the fall from over $45 to this current gap fill, investors should expect at least a 25% bounce.
Crypto-currency Ripple (XRP) has fallen from $3.30 two weeks ago to just below $0.90 at the lows today. While it has bounced back just above $1.00, there should still be one more wave of hard selling before a major bottom is put in place. Look for major support and a strong buy at $0.80 based on stock chart analysis. Once $0.80 is tagged, I expect a bounce as high as $1.60, a 100% move.
The Hershey Co (NYSE:HSY) Looks Sweet At This Level
The Hershey Co (NYSE:HSY) has been declining since December 19, 2017 when the stock traded as high as $115.82 a share. Today, HSY stock is trading lower by $0.58 to $108.35 a share. The stock is now trading just below its 200-day moving average which is often viewed as a negative on the charts. The next important support level for the candy giant will be around the $105.00 level. This is where the stock was defended in late October 2017. Often, past support areas will be major chart support when retested. It is important to note that Hershey Co (NYSE:HSY) is expected to report earnings on February 1, 2018 before the opening bell.
F) Finally Flashing A Buy Signal?
