Friday, January 25, 2013

Above 1,500

SPX it's in its way to touch the all time high, 1,550! This January month was unusually bullish, a continuous rally without any hesitation. Price stayed above both EMAs (two hours chart) for the whole month and also 40-50 points above rising SMA 120. This is very bullish but at the same time a little bit scary.

Right now SPX is slightly above the trading channel. A push above this channel will be very bullish in short and intermediate time frames but at the same time is going to signal the arrival of a major top. 

Weekly chart shows a clear higher high and a positive DMI.

Daily chart doesn't bring too much information, the same clear higher high observed on weekly chart.

AAPL got hammered after earnings, even more than I expected. I am not going to talk about this stock anymore since is now clear for even the most enthusiastic bulls that the stock is in a pretty deep downtrend. The 4 years uptrend line did not hold at all, and the next support levels are around 430 and 360. Coincidently, as I mentioned in the past, 360 is the level predicted by the "head and shoulder" pattern. However, don't get too enthusiastic about shorting AAPL to the last dollar. For every crime there is a punishment, so don't get in the "AAPL will drop to $5/share" crowd since is unlikely this will happen soon. Watch carefully how it behaves and if you see signs that is rebounding cover your shorts. I will let you know when the trend is going to change.

This is the forth week on the upside in the row and as expected market is bullish on all time frames. If you want to ride this rally you can still do it either by buying ETFs or with individual stocks. Talking about individual stocks I have a few in mind.

First, the very bullish and relatively safe bets (nothing is safe in stock market).

Then two stocks not as safe but with a great potential, JNPR and HPQ (maybe too early to buy this one).

Plenty other stocks with great potential, ROST, EXPD, D, SBAC, LOW, XLP, PFE, FLR, BMY.
I am interested in these stocks since they are also optionable.

All the best!


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