Feb 23 Flat Market Update and New Stock Scan

Bycjrosen

After a powerful short-squeezed breakout to new all-time highs, stocks traded flat to start the new week.

We’ll update our key simple levels and note trending stocks today:

The breakout above 2,100 resulted in a short-squeeze where bears (short-sellers) unwillingly helped propel the market higher as they covered their losses with stops triggered above 2,100.

Today has seen a flat or consolidation action between the highlighted pivots near 2,104 and the 2,108 level.

We’ll focus on these for any additional bullish breakout plays that may trigger above 2,110 or under 2,100.

Let’s see what our Breadth Chart reveals about current market strength (or weakness):

Unlike the last few sessions which showed Bullish Breadth, today’s action shows BEARISH Breadth.

The strongest sectors clearly are the Defensive names of Staples, Health Care, and Utilities.

The weakest sectors – showing a 30% reading  are all the Offensive names such as Discretionary and Materials.

We’ll take this into account and be more cautious than we otherwise would be were the signal bullish again.

We have potential bullish trend continuation plays in the following stocks from our scan:

Computer Sciences (CSC), Valeant (VRX), Pharmacyclics (PCYC), and Humana (HUM)

Potential downtrending candidates exist in stocks showing relative weakness today:

HSBC, Rio Tinto (RIO), Las Vegas Sands (LVS), and Sun Life (SLF).

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

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