Top Trade Ideas for the Week of August 14, 2011: The Rest

Here are the Rest of the Top 10:

Caterpillar, Ticker: $CAT

Caterpillar fell lower and then consolidated last week before jumping Friday. It printed a solid black candle, indicating bearish intra-day activity, but held above the range for the week. Using 89.20 as a stop, this can be played long with targets at resistance of 91.50 followed by 95 and 97.24. The rising Relative Strength index (RSI) and improving Moving Average Convergence Divergence (MACD) indicator support further upside.

Dril Quip, Ticker: $DRQ

Dril Quip had a strong move higher off of the bottom on Tuesday last week and is into the body of the long red candle from the prior week. It has a RSI that is moving and sloping higher and a MACD that is improving to support more upside. Using a stop at 57.40, this can be played on the long side or wait until it is above resistance at 59, and look for the next resistance at 62 followed by 65.30 above that.

First Cash Financial Services, Ticker: $FCFS

First Cash Financial Services held support at the previous resistance level at 40 and moved higher. It is now approaching resistance at the top rail of an expanding wedge at 47.20. If it can break above that rail then it has a target on a Measured Move (MM) to 54. Short interest at 6% could accelerate a move higher. If it fails then it can be played short with support at 44 followed by 42 and 40. The rising RSI and increasing MACD support the upside case.

lululemon athletica, Ticker: $LULU

lululemon athletica had a strong move off support at the Fibonacci area near 47.50 and the center of the previous symmetrical triangle and is nearly back to its highs and at the midpoint of the Bollinger bands. It has a RSI that has crossed the mid line and is sloping higher and a MACD that is moving towards a positive cross. It has resistance higher at 60 followed by 62 and 64. A move above the previous high at 64 has a target on a MM to 71. this carries high short interest at 10% so a continued move higher could lead to a short squeeze. Use 57.20 as a stop.

Pharmasset, Ticker: $VRUS

Pharmasset held support at the middle of the previous channel and then turned back higher. It has as RSI that is moving higher over the mid line and a MACD that is about to cross positive supporting more upside. Using a stop at 123, this can be played to the long side with a target of resistance at 130 and then 137.80, the previous high.

Up Next: Bonus Idea

The Best

(As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

After reviewing over 800 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 looks for next week to be a reversal of this past week. Gold looks heading lower while Crude Oil has a short term bias higher in a downtrend. The US Dollar Index looks to continue sideways in the 73.50-76 range, while US Treasuries look to continue lower in an uptrend. The Shanghai Composite and Emerging Markets look to be headed higher. Volatility looks biased to the downside with a move under 34 key to continuing lower, and giving a bias to the upside for the Equity Indexes SPY, IWM and QQQ, also within a downtrend. the big question looks to be whether this is a dead cat bounce or for real. Use this information as you prepare for the coming week and trade’m 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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