Top Trade Ideas for the Week of January 22, 2013: The Rest

• Posted by Greg Harmon
• on January 21st, 2013

Here are the Rest of the Top 10:

Cummins, Ticker: $CMI

Cummins, $CMI, has been moving higher off of a double bottom in mid October and a confirmed Inverse head and Shoulders (IHS) in early December. The price objective of the IHS is in the cross-hairs now at 118. The latest moves higher have come in a a couple of runs followed by consolidation and it is breaking consolidation now. The Relative Strength Index (RSI) is bullish and the Moving average Convergence Divergence indicator (MACD) is crossing to positive, both supporting further upside.

Edwards Lifesciences, Ticker: $EW

Edwards Lifesciences, $EW, gapped lower in early October and has been slowly pushing higher. Closing above the 100 day Simple Moving Average (SMA) Friday for the first time since that gap, it has support for more upside from a bullish RSI and a MACD about to cross to positive.

Palo Alto Networks, Ticker: $PANW

Palo Alto Networks, $PANW, has not been public for long but has been in a downtrending channel for most of that time. Breaking it higher last week it has support for more upside from a rising RSI that just crossed into bullish territory and a MACD that is positive and growing as it moves over the November high consolidation.

Constellation Brands, Ticker: $STZ

Constellation Brands, $STZ, had a drift lower after its earnings report and found support at the 100 day SMA, printing a Tweezers Bottom, before bouncing and now consolidating at new highs. The RSI is bullish and the MACD is positive and growing, both supporting a push through higher.

WellPoint, Ticker: $WLP

WellPoint, $WLP, is building a bull flag over the 200 day SMA as it readies to report earnings Wednesday before the market opens. The consolidation is happening at the previous high, and a historically important level. The RSI is bullish and the MACD is positive and averting a cross to negative, both supporting a push 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 Saturday which heading into the shortened holiday week sees the markets continue to look bullish. Gold looks set to continue higher within the sideways channel while Crude Oil continues its rise. The US Dollar Index seems content to move sideways while US Treasuries are biased higher in the downtrend. The Shanghai Composite and Emerging Markets are biased to the upside on a break of their recent consolidations. Volatility looks to remain low and biased to move lower keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. There seems to be some rotation from the IWM into the SPY and now the QQQ is clearly lagging in a consolidation zone, keep an eye on it. Use this information as you prepare for the coming week and trade’m well.

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