Actionable Trades: SPY, MCP, BIDU, YOKU, INTC, V, SLB, SLV, TZOO

SPY is holding the $133 level for now.  There are a lot of strong earnings from market leaders, but it is waiting on a resolution to the debt ceiling.  The chart still looks constructive as we flag in front of resistance and hold above key moving averages, but the action right now is very headline driven. While most expect a deal to get done at the 11th hour, it is important to stay plugged in.  Tonight we saw positive earnings from AMZN and LVS.  

Trade Update:  MCP has been a good focus in the past week with the first entry at $55 with an additional add-on buy above $61.  It closed strong today, +6.25%.  Use your own trading rules to take profits.    

 

BIDU has been another good targeted trade as it made a strong move into earnings.  Positive earnings were released last night.  BIDU gapped above 52-week highs and looks good for higher prices.  Wait for a few days of consolidation of this big move as it is extended from previous buy entries.

 

The Chinese internet sector showed relative strength to the market today after a strong earnings report from the leader in the sector, BIDU.  YOKU is a laggard play in the sector, but has a decent chart set-up and closed the day +9.50%.  Today was the first day up in this stock, look for continuation over today's high of $37.45.   

 

The semiconductor chip makers have had solid moves from stocks like IBM, MSFT, and INTC. The stock is a bit of a slow-mover, but a close above $23.25 in INTC could trigger a move to new highs.   

  

The credit card sector is performing well.  Visa has earnings tomorrow, Wednesday, July 27th, after the close.  It could have a run into earnings or wait til after to make a move.  Look for a momentum play above 52-week highs of $90.83. 

 

SLB, an oil stock, posted earnings last Friday, July 22.  It is holding the gap-up and consolidating in front of 52-week highs of $95.64.  This could have a momentum move through those highs.  Watch the price action in this stock.

 

SLV is holding above the 3 month range.  An additional buy is above $39.90-$40.  Also look to the chart of FXE which looks good for higher prices, which has a positive affect on commodities.  

For the active trader, TZOO is setting up for a quick trade.  Although, it had a big gap down on earnings, it is holding up well and the range is getting very tight.  Look for a move above today's high of $61.60 with an add above $63.27 to fill some of the earnings gap.  First resistance is $67.28.   

 

Actionable Trades: SPY, OIH, MCP, YNDX, LNKD, BAC, GS, MS, JPM, V, RVBD

SPY gapped down this morning as there was no resolution to the debt ceiling over the weekend.  The market took this news in stride and rallied most of the day before selling off into the close.  The chart still looks constructive as we flag in front of resistance, but the action right now is very headline driven. While most expect a deal to get done at the 11th hour, it is important to stay plugged in.  More market leaders have earnings that come out this week as well. Tonight we saw earnings from BIDU (positive) and NFLX (negative).  Tomorrow night we will see earnings from AMZN and LVS.   

Trade Update:  OIH is performing well as it extends from the most recent buy entries.  Today was a spot to lighten up on OIH as it ran into resistance 1 from the previous entries that were targeted. There have been strong earnings reports from some of the companies in the OIH, like HAL, SLB and BHI.  This can continue higher as it's not far off of 52 week highs, but had a nice 5 day move from the most recent $155 buy entry.

MCP was targeted last in last Wednesday's post as it was wedging on the daily chart.  MCP is now holding above the wedge and put in an inside bar today.  Look for an additional add-on buy above $61.  First resistance is $62.50-$63. 
  

          

A recent IPO, YNDX, is poised to make a move soon.  First entry is a close above $37 with an additional cash flow add through $37.90.  $42.01 is the high from the day of its IPO.       

Although there was a negative article out of Barron's over the weekend about LNKD, it never broke below the most recent pivot point of $96.20.  LNKD is holding higher and looks good over $105 and then the most recent high of $110.50.  Watch the price action here, this stock is hard to get a grasp on. 

  

The banking sector has shown signs of life again as they break above downtrend lines and stocks like BAC, GS, and MS have bounced well off of lows.  JPM is trading and holding above the descending trendline.  Look to buy on a dip because if this move has any validity, it should not trade back below the long term descending trendline.  Today, GS showed relative strength versus the market as it was up 1% on the day. 

 

The credit card sector is also performing well.  Visa has earnings this Wednesday, July 27th after the close so it could have a run into earnings.  Look for a momentum play above 52-week highs of $90.83.

 

It is becoming harder to find shorts in this market as it is slightly off 52-week highs, however, this is still a market of haves and have nots.  RVBD posted earnings last week and closed on the lows of the days.  It is now bear flagging on the daily and has had time to absorb some of the most recent down move.  Look for a break of the bear flag at $30.90.

 

Visa and Mastercard: Sell the Excitement, Buy the Pullback

At around 3 p.m. on June 29, an hour before the close of equity trading, the Fed announced a change to the swipe fees associated with debit card transactions. The Fed decided to reduce the rate for these swipe fees from $044 to $0.21 cents. This announcement triggered an extremely strong surge in the price of the credit card companies, namely Visa (V) and Mastercard (MA)

No doubt some of you may scratch your head and wonder why a decrease in revenues is cause for excitement. Lets get in the Delorean and go back to December of 2010. At a meeting back then, the Fed had discussed decreasing the swipe fee to as low as $0.12 per debit card transaction. That piece of news caused a precipitous price decline.

In the months since December, Visa and Mastercard have regained their prior upward trend and closed the gap caused by that news.





Two of the fundamental rules of trading are

• Buy low and sell high, and
• Sell on excitement.

I can assure you that many of my peers and several portfolio managers did just that. They saw Visa and Mastercard reach prices that they could only expect to attain under the very best bull market conditions. Especially Mastercard, which yesterday touched long-term resistance levels last made when the stock made all-time highs.



As you can see in the above chart, yesterday’s price action brought Mastercard close to all-time highs.

The smart money started exiting these stocks after they had crossed the 10% threshold and is now waiting for a pullback to possibly reenter the trade.

Smartstops has the short-term stop on Visa at $72.66 and the long-term stop at $70.43. The reentry signal was triggered yesterday at $81.11



Smartstops has the short-term stop on MasterCard at $258.49 and the long- term stop at $258.34. The reentry signal was triggered yesterday at $288.57.



Editor's Note: For more, visit SmartStops.net.