5 Trade Ideas for Monday: Cadence Design Systems, Cincinnati Financial, Encompass Health, Schneider National & Weyerhaeuser

5 Trade ideas excerpted from the detailed analysis and plan for premium subscribers:

Cadence Design Systems, Ticker: $CDNS

Cadence Design Systems, $CDNS, jumped in February 2017 and then trended higher for the rest of the year, making a top at the end of November. It pulled back from there to the 50 day SMA and held, rising it for a month, before dropping below it. A bounce then brought it back to the prior top where it is finding resistance. The RSI is pushing up in the bullish zone with the MACD rising. Look for a push over resistance to participate higher…..

Cincinnati Financial, Ticker: $CINF

Cincinnati Financial, $CINF, peaked in August after a gap higher. It immediately started to drop and found support at the 200 day SMA. After a weak bounce it dropped again, this time through the 200 day SMA, finding support at the end of October. Since then it rose and met resistance at the 100 day SMA. It is now pressing on that spot for the third time. The RSI is on the edge of a move into the bullish zone with the MACD rising and positive. Look for a push up through resistance to participate…..

Encompass Health, Ticker: $EHC

Encompass Health, $EHC, started higher in August with a move up off of the 200 day SMA. It pulled back to touch the 200 day SMA two more times over the next 3 months before gapping higher. it consolidated there for some time with higher lows until a jump at the beginning of the year. The price fell back to retest the breakout and then reversed and is now back at the high. The RSI is bullish and rising with the MACD also moving up. Look for a push over resistance to participate…..

Schneider National, Ticker: $SNDR

Schneider National, $SNDR, went public in April and did nothing its first month. In May it started moving higher and has continued, with a couple of pauses along the way to the current top. Friday saw a third move to resistance on a strong candle. The RSI is pushing higher in the bullish zone with the MACD trying to turn up after resetting lower. Look for a push over resistance to participate higher…..

Weyerhaeuser, Ticker: $WY

Weyerhaeuser, $WY, rose up out of consolidation in September, running to a top at the beginning of December. It has pulled back in a channel, a bull flag, since then. The RSI is making a higher high as it runs up in the bullish zone while the MACD is crossing up and positive. Look for a break of the flag higher to participate…..

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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 with January Options Expiration behind, sees the Equity markets looking extremely strong and perhaps overheated.

Elsewhere look for Gold to pause in its uptrend while Crude Oil slows as it hits resistance as well. The US Dollar Index looks destined to move lower while US Treasuries are biased lower in consolidation. The Shanghai Composite and Emerging Markets are poised to continue to new multi-year highs.

Volatility looks to remain at very low levels keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. They are lining up on both the shorter and longer timeframe now with the SPY overheated and at extreme momentum levels, the QQQ also overbought but not quite extreme, while the IWM is just getting going. This could easily lead to rotation into the IWM from the other Indexes. Use this information as you prepare for the coming week and trad’em well.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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