Top Trade Ideas for the Week of February 7, 2011: The Rest

• Posted by Greg Harmon
• on February 6th, 2011

Here are the next 5 ideas:

Costco Wholesale, Ticker: COST

Costco broke out of a consolidation channel higher above 73 on Thursday and held it on Friday. The Relative Strength Index (RSI) is pointing higher and the Moving Average Convergence Divergence (MACD) indicator just turned positive and is crossing higher. The target on a measured move, based on the last two moves, is 80. The breakout level can be used as a stop.

Delcath Systems, Ticker: DCTH

Delcath has already had a strong move higher off of the 100 day Simple Moving Average (SMA). It has a rising RSI and an increasing MACD. What makes it attractive is that if it can get through the 11.20-11.36 area there is no resistance until about 13.50. If it get to that range use 10.90 as a stop.

Ebix, Ticker: EBIX

Ebix tested the 22 support level and held. Now the RSI is crossing through 50 and pointing higher and the MACD is crossing up. It recently moved up through the 50 and 100 day SMA’s and had a bigger volume move Friday through short term resistance at 23.50. Look for this to continue higher to 26 and then 28 if it can get through. Use the 50 day SMA as as top.

Smith Micro Software, Ticker: SMSI

Smith Micro has been basing after its long fall from 17, with the range now shrinking to the upside. The MACD is crossing higher and the RSI has been lifting off the turf. Over 13.23 look for this to continue higher to resistance at 13.50 and then 15 if it gets through. A stop could be placed at 13.

Whole Foods Market, Ticker: WFMI

Whole Foods has been probing its resistance at 53.20 for several weeks. The RSI has tested the mid line and held and the MACD now looks to start improving. If it can get over 53.20 then it has a measured move to 58. Be mindful of earnings after the bell Wednesday.

The First 5

After looking at over 700 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 looks for Gold to continue higher with Crude Oil to continue consolidating with a bias to the downside if it breaks. The US Dollar Index looks to continue higher with US Treasuries lower. The Shanghai Composite will start trading again mid week and looks to continue higher with emerging markets continuing their broad range consolidation with a bias to the upside. The Volatility Index should remain volatile but not so much that it dictates direction of the market. The equity index ETF’s look to continue their moves higher next week.

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

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