Top Trade Ideas for the Week of January 17, 2012: The Rest

• Posted by Greg Harmon
• on January 16th, 2012

Here are the Rest of the Top 10:

American Capital, Ticker: $ACAS

American Capital, $ACAS, is forming a bull flag at a Double Top at 7.38. As it builds the Relative Strength Index (RSI) is trending higher and near a turn bullish. The Moving Average Convergence Divergence (MACD) indicator is positive but stalled. Also the Bollinger bands are shifting higher to allow more upside. If it can get over 7.38 then it has a Measured Move to 8.03, near the next resistance.

CEMEX, Ticker: $CX

CEMEX, $CX, was a Top 10 pick December 12 as it was about to break above 5. It is now presenting a second chance for a good reward to risk trade as it approaches the August high and the 200 day Simple Moving Average (SMA). The RSI has maintained bullish and the MACD is flat but about to try to cross positive again. Over the August high it has a vacuum up to the resistance area new 7.50.

Pier 1 Imports, Ticker: $PIR

Pier 1 Imports, $PIR, is in a bull flag after moving higher off of the resistance at 14.00. As it builds the flag the RSI is bullish and hovering around 70 and the MACD is positive, but starting to fade a bit. Normal in a bull flag. The SMA’s show clearly the trend higher. The Measured Move out of the flag higher targets a price of 16.50. With short interest near 10% it could get legs from a short squeeze quickly.

PerkinElmer, Ticker: $PKI

PerkinElmer, $PKI, has been a rocket ship rising off of the Doji Hammer December 14. The gap ups have coincided with the Fibonacci Arcs and Fan lines and the move higher looks to continue. The RSI is elevated but not extended and the MACD is positive. The inside day bodes for a possible consolidation, but a test of the resistance at 23.00 seems likely. That would also complete a ‘W’ pattern and above it a target of the 25.50 area.

Timken, Ticker: $TKR

Timken, $TKR, is back testing the resistance that was support while it was in the Diamond Top early in 2011. The RSI is strong and bullish near 70 while the MACD is positive and growing as it approaches that resistance. It may consolidate as it is showing signs of a flag with volume falling, but still bullish. Over that resistance looks to march higher.

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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 heading into another holiday shortened week looks like the markets continue to improve. Gold looks likely to head a bit lower while Crude Oil consolidates in the short term within the broad 95-102.5 range. Both the US Dollar Index and Treasuries are biased to the upside although Treasuries may continue in their consolidation range. The Shanghai Composite and Emerging Markets look better to the downside with a chance that Emerging Markets consolidate sideways. Volatility looks to continue lower but likely at a slower pace. These inputs set up a scenario where the US Equity Index ETF’s SPY, IWM and QQQ can continue higher. The charts for the SPY and IWM agree moving to new higher highs and looking ready for more. The QQQ has run up against resistance so it may take some time to get through but is also biased higher. Use this information as you prepare for the coming week and trade’m well.

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