Dec 9 Gap into Support Update and Stock Scan

Dec 9, 2014: 1:46 PM CST

Even though we’re seeing the widely expected and highly logical pullback, buyers continue to show their strength with another intraday V-Spike Reversal.

Let’s update our levels and highlight the strongest trending stocks to trade for the moment:

The widely (negatively) divergent market couldn’t sustain the thin-air highs any longer and retraced sharply lower toward the initial support target near 2,050 then 2,035 as highlighted.

Buyers swooped in to prevent additional selling, thrusting the market up off the 2,045 prior pivot zone.

We’re back above 2,050 which will be the focal point to develop a trading range (2,040 to 2,050).

Look to be bullish above 2,050 and otherwise cautious under this level.

The deterioration in breadth – and new indicator lows – do suggest that further price lows are likely under 2,035.

Sector Breadth can be deemed cautious or bearish at the moment:

Almost all Utility Sector stocks are positive today, suggesting risk-off money flow.

However, rampant bearishness is contradicted by the relative weakness in Staples and Health Care – the other defensive sectors.

Our strongest sector beyond Utilities is the Energy Sector, benefiting from a bounce in oil prices.

We have potential bullish trend continuation plays in the following stocks: (JD), O’Reilly (ORLY), Diamond Offshore (DO), and Western Digital (WDC).

Potential downtrending candidates exist in stocks showing relative weakness today:

GlaxoSmithKline (GSK), H&R Block (HRB), Tata Motors (TTM), and Manpower (MAN).

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2 Responses to “Dec 9 Gap into Support Update and Stock Scan”

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