5 Trade Ideas for Monday: Abbott Labs, ARRIS, BorgWarner, Lockheed and Nasdaq
- Posted by Greg Harmon
- on February 12th, 2017
5 Trade ideas excerpted from the detailed analysis and plan for premium subscribers:
Abbott Labs, Ticker: $ABT
Abbott Labs, $ABT, peaked in August of 2016 and started a saw-tooth move lower. 3 steps found it at a bottom, at a higher low, in December. It hovered there for the rest of the year before a move higher. A slight pullback was followed by a second move up. Now it is at resistance and consolidating. The RSI has worked off an overbought condition and the MACD is flat. A push over that resistance is a trigger to participate in more upside…..
ARRIS, Ticker: $ARRS
ARRIS, $ARRS, crept up to a high in December. A small pullback was bought and it rose to the high again to start January. But then it fell back further, confirming a double top and continuing lower. It spiked lower to touch the 200 day SMA January 31st and has stopped falling since. Friday it took a step higher out of consolidation. The RSI is knocking on the mid line and the MACD is about to cross up. Look for follow through to the upside to participate…..
BorgWarner, Ticker: $BWA
BorgWarner, $BWA, went through a long consolidation in the fall, not seeing any of the rise that most stocks felt following the election. That changed in December though as it started higher, rising 10% in less than a week. Since that jump it has consolidated again in a triangle. It ended last week touching the top of the triangle with the RSI rising and bullish and the MACD trying to cross up. Look for a push through the top of the triangle to participate higher…..
Lockheed Martin, Ticker: $LMT
Lockheed Martin, $LMT, had a strong trend higher end in August. The pullback found support at the 200 day SMA in October and it reversed higher. That move back up made a higher high as it stalled in November. It consolidated there for a couple of weeks and then pulled back again, this time to the 100 day SMA. It had been consolidating in a range over that for 2 and a half months until pushing higher Friday. The RSI is rising in the bullish zone and the MACD is crossed up, positive and rising. Look for follow through to participate higher…..
Nasdaq, Ticker: $NDAQ
Nasdaq, $NDAQ, broke above consolidation in July and rose to a high in August. A shallow pullback and retest of the high that failed led to a double top and move lower to a bottom in November retracing 78.6% of the move up. It confirmed a double bottom then and moved higher, retesting the August high again. The sharp pullback in a bull flag lasted until Friday when it broke the flag higher. The RSI is turning back higher in the bullish zone and the MACD is avoiding a cross down. Look for continuation to participate higher…..
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After reviewing over 1,000 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 Friday which heading into February Options Expiration week sees the equity markets looking strong if not moving towards getting overheated.
Elsewhere look for Gold to continue in its uptrend while Crude Oil churns marking time. The US Dollar Index is looking stronger while US Treasuries consolidate in their downtrend. The Shanghai Composite and Emerging Markets both look strong and ready for more upside.
Volatility looks to remain at extremely low levels keeping the wind at the back of the equity index ETF’s SPY, IWM and QQQ. Their charts all look great and ready for more upside in the longer timeframe but the SPY and QQQ are getting a bit hot in the short term and may need a rest. Use this information as you prepare for the coming week and trad’em well.
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Gregory W. Harmon CMT, CFA, has traded since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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