Top Trade Ideas for the Week of December 19, 2011: The Rest

• Posted by Greg Harmon
• on December 18th, 2011

Here are the Rest of the Top 10:

General Electric, Ticker: $GE

General Electric, $GE, broke the bull flag higher over 17.25 on Friday with a Relative Strength Index (RSI) that is bullish and rising and a Moving Average Convergence Divergence (MACD) indicator that is positive, and increasing again. Both support more upside. The 50 day Simple Moving Average (SMA) has also recently crossed through the 100 day SMA bullishly supporting more upside. The next significant resistance comes at a retest of the 38.2% Fibonacci retracement of the move lower during the 2009 financial crisis at 17.38 before it can have staying power moving higher.

Great Plains Energy, Ticker: $GXP

Great Plains Energy, $GXP, is consolidating at previous resistance at 21.30. If it can get through higher the Measured Move would make for a target at 21.70. But there are some topping tails as well indicating that it may be ready to reverse lower. A break down below 20.60 would make for a short opportunity and potential retest of the November low. The RSI is on the edge. It has not turned bullish and has been trending lower. The MACD is also trending lower and near a cross, but looks to be a fairly flat cross. Both suggest the break will be lower, but be prepared for either.

Mentor Graphics, Ticker: $MENT

Mentor Graphics, $MENT, is moving from trending higher to consolidation as it approaches previous resistance at 13.00. As it sits there it has a RSI that is bullish and now turning back higher while the MACD is improving toward the zero line. These support a hold or break higher. A move above 13 does not have resistance until the area where it fell from the descending triangle in May.

Sally Beauty Holdings, Ticker: $SBH

Sally Beauty Holdings, $SBH, is testing resistance of a Triple Top. It comes at it from a series of higher lows, with a RSI that has held bullish and is rising, a MACD that is about to cross positive and upward sloping SMA’s. All are positive for the stock. The target on a Measured Move higher off of a breakout is to 25.

Virtus Investment Partners, Ticker: $VRTS

Virtus Investment Partners, $VRTS, is testing support of the bull flag at 72.00 printing a very bearish Marubozu candle on Friday. The series of candles beginning with the Shooting Star November 30th have been flashing signals of a turn lower. The RSI is is trending lower and near a break of the mid line while the MACD has been trending lover since the 30th and has crossed negative. Both support more downside. Look for a break of 72 to trigger a move back towards the 64 area. It does have a low float and a short interest at about 6% so stay close by if short.

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After reviewing over 900 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Saturday which looked as we head into the last two weeks of the year as Gold still looks broken from its move and poised for more downside while Crude Oil is also broken and biased lower. US Treasuries and the US Dollar look to continue to drive the direction of the markets crushing Equities as they move higher. The Shanghai Composite, which has been playing a supporting role in moving Equities lower, looks to continue to do so long term but might consolidate the last leg down in the short run first. Emerging Markets look to pay the price lower as well. Volatility is poised to continue to drift lower supporting an orderly move. All this sets up for the Equity Index ETF’s, SPY, IWM and QQQ, to move lower in the coming week, and the short term charts agree. Use this information as you prepare for the coming week and trade’m well.

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