EGG Scan for June 11th

Tuesday seemed to be a painfully slow day of trading. Volume was low and not much moved as the day was mixed based on news and some intraday volatility in small caps.

Running the EGG Scans – First the daily winners…

  • SVXY – took one day off and the short volatility ETF was back on the rise and leading.
  • Crude Oil is back (UCO) to the May high. The price of crude has jumped on supply worries and the inventory data is out today… again speculation driving prices short term.
  • YINN – China hit a new for the year. Breakout from a wide range base? Upside in play.
  • EDC – Emerging markets (EEM) back to the upside Movement and leading again?¬†Broke from the upside consolidation pattern and continues the previous uptrend.
  • KRE – Regional banks along with the large banks are leading the financials higher. KBE is the current EGG trade.

Small caps (TNA) had inside trading and remain a positive short term. The downside shift in natural gas (UNG) is of interest as it moves back below support. KOLD could come into play short term as a leader.

Rotation to the growth stocks has kept the current drive higher alive. Overall leadership continues to broaden showing signs of a positive market. Getting extended on the current move and would expect some testing near term as we saw on Tuesday in some sectors. Stops adjusted on the EGG trade today and they held up well as some selling showed in the financials still watch to see how they react to any downside pressure.

EGG Model Watch List:

EGG Tracking…

  1. PJP – Pharma (breaking from consolidation, but momentum has stalled.) entry $58.75, stop $58. Another gap open with a $59 entry point and adding to the risk of the trade. Still interesting move, but needs a follow through on test of the move. $59.45 entry. Still attempting to follow through on the upside. XPH did break higher showing strength in the large cap pharma stocks.
  2. BRCM – giving the best look relative to the semiconductors leadership. $31.15 entry last week¬†was optimal looking back. Thus, a test of that level and hold, or a move through $31.50 on volume would be of interest for a EGG trade on individual stock level. Got the early move¬†last¬†Thursday (entry $31.50) and it followed¬†through on Friday. News pushed the stock up 12%¬†last week.¬†Sold half at $35 and $34 stop on the balance. See how this plays out… the news wasn’t that earth shattering and willing to take my gift of gains. Nice bounce back towards the highs the balance of the week. Raise stop to $37¬†on balance of shares. Topping and volume falling back to normal.

Current EGG:

KBE 32.50 entry. Banks made the break higher and the market trend continues higher. The follow through move helps the upside in the broad indexes and we continue to look for the upside in financials as it attempts to take on a leadership role near term. Stop is $33.05. (watch to take 1/2 the trade off at $33.30 if we open with negative bias today.

Holding position for now and watching how this plays out short term.