Top Trade Ideas for the Week of January 9, 2012: The Rest

• Posted by Greg Harmon
• on January 8th, 2012

Here are the Rest of the Top 10:

AK Steel, Ticker: $AKS

AK Steel, $AKS, is breaking out of a symmetrical triangle with resistance at 9.57 above from August. Above that there is a lot of room to move higher. The Relative Strength Index (RSI) is has been trending higher and near a bullish turn while the Moving Average Convergence Divergence (MACD) indicator has been trending slightly higher. Both, along with a bullish cross of the 50 day Simple Moving Average (SMA) up through the 100 day SMA, support more upside. Watch for a break above the mini consolidation at 8.95 as an entry. This also has high short interest at over 13% that could give it a tail wind on a move up.

Biogen Idec, Ticker: $BIIB

Biogen Idec, $BIIB, is running up against the top of a bull flag as well. Maybe you would prefer to look at it as a declining trend line resistance. That is a valid interpretation. Over 117.50 it gets interesting with a Measured Move eventually to 140, when over the October high. The RSI is rising and bullish and the MACD has been trending higher and positive. Both supporting more upside as the Bollinger bands expand to allow it.

Blackstone Group, Ticker: $BX

The Blackstone Group, $BX, is approaching previous resistance at 15.23, making a series of higher highs and higher lows along the way. It has both a RSI that is rising an almost bullish and a MACD that has crossed positive and starting to increase, to support a further rise. A move over resistance could signal a new wave higher to the 17.50 or 19 area.

Norfolk Southern, Ticker: $NSC

Norfolk Southern, $NSC, is approaching resistance at 76.40, also what could be the neckline for a Inverse Head and Shoulders pattern. Through that resistance it a first target on a Measured Move to 83 and then the Inverse Head and Shoulders target of at lest 95.40. The bullish and rising RSI and MACD both support a push higher.

Nuance Communications, Ticker: $NUAN

Nuance Communications, $NUAN, is testing resistance at the previous high at 26.97 after rising from a mere 38.2% retracement of the run higher from the August low at 15.56. As it reaches resistance the RSI is bullish and trending higher and the MACD is positive and increasing. Both support more upside. A break out higher creates a target on a Measured Move to 33.64. Short interest is elevated at 4.6% and puts another checkmark in the upside bias column.

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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 looks with one week in the books that the tone of the Equity markets is becoming positive. Several areas are still likely to consolidate further before moving. Gold is one of them and it looks likely to move lower when done consolidating, while Crude Oil is biased higher. US Treasuries look to break consolidation higher while the US Dollar Index just keeps rocketing higher. The Shanghai Composite and Emerging Markets look to break their ranges to the downside, while Volatility continues lower. These factors combine to create an environment where there is a slight upward bias to equities, given the recent correlation with the US Dollar Index, and the charts of the Equity Index ETF’s SPY and QQQ reflect that bias. The IWM is more neutral. 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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