Top Trade Ideas for the Week of June 13, 2011: The Rest

Here are the Rest of the Top 10:

AGCO, Ticker:$AGCO

AGCO has been in an expanding wedge, or megaphone pattern since January. Lately it has failed to break above the falling 50 and 100 day Simple Moving Averages (SMA) near the middle of the pattern and is testing the falling trend line support. Now below the 200 day SMA and with Moving Avergae Convergence Divergence (MACD) indicator growing negative while the Relative Strength Index (RSI) falls from the mid line, it is set up to break support lower. If it gets under 47 the the next support comes at 46 and then 44.25 and 41.80 before the previous breakout higher at 40.38. Short interest is low on this name. If it holds the trend line and bounces then there is a play to resistance higher at the 200 day SMA at 48.34 followed by 50 and 52, Take what she gives you.

BlackRock, Ticker:$BLK

BlackRock crashed through the mid line of its recent symmetrical triangle last week and printed a bearish Falling Three Methods pattern for the week. The falling RSI and MACD also support more downside. With low short interest look for it to head lower under 185 with support coming at 178.68 followed by 175 and a gap fill at 171.90. Wait for a break of 185 and use that as your stop.

Fossil, Ticker:$FOSL

Fossil has been testing resistance at 107.75 again last week. It has a rising RSI this time and a MACD that is curling towards a positive cross up as it lifts off of the rising channel bottom just above the 50 day SMA. What is different is that the Bollinger bands are getting really tight. If it can get over 107.75 then it has a target of 115.50 on a Measured Move (MM). With around 3% short interest, it can also be played short to the bottom rail at 99.53 if it fails and starts lower.

Pharmasset, Ticker:$VRUS

Pharmasset broke out if it’s channel last week and touched the second MM higher at 135 (comparable to the move from 70 to the channel at 95) before settling just over the first MM at 118 (a channel width higher). If it continues to hold over 118 then look for it to climb back up to 135. If it falls below then look for a retest of the 109 breakout area. Easy peasy lemon squeezy. Short interest is elevated at around 10% so be vigilant on the downside trade.

Wolverine World Wide, Ticker:$WWW

Wolverine World Wide fell from a flag but found a bottom just under the 100 day SMA last week. At the end of the week it had moved back above the 100 day SMA with a rising RSI and a MACD that is curling towards a positive cross, with increasing volume. Rising price with increasing volume, that’s the ticket! If it can get over 37.50, the February high, then it has resistance higher at 38.15 followed by 39.30 and the area between 39.63 and 40. Use the 100 day SMA as a stop.

The Best

Up Next: Bonus Idea

(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 sets up as a bizarro week for any macro economic follower. Gold and Oil look set to consolidate or go lower and the US Dollar Index and US Treasuries look to continue higher. Both the Shanghai Composite and Emerging Markets look lower next week. Despite falling equity markets Volatility looks to remain subdued. The US Equity Index ETF’s , SPY, IWM and QQQ all look to have more downside with the weekly charts more ugly than the daily charts. Also all three are moving lower in the same pattern indicating this is a total equity market selloff not sector or capitalization specific. Use this information to understand the major trend and how it may be influenced as you prepare for the coming week ahead. 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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