EGG Scan for June 16th

Enough buying on Friday to relieve the selling pressure and VIX drops near 12. Telecom, semiconductors and energy lead the markets higher. What now? Do the sellers fold up and go home and let the buyers resume control of the broad markets? Exactly, no I am not taking the buyer side, but the questions are starting again which can mean more choppy waters ahead for stocks. This is also know as consolidation and expected after a move higher. I suggest patience as we start the trading week and take the temperature of the market.

To make the point I left Wednesday and Thursday’s resulting scan below to compare with Friday. There are some parts surfacing and attempting to exert leadership, but the overall results are mixed.

Running the EGG Scans – First the daily winners…

  • Friday’s leaders – YINN (China), ERX (Energy), TAN (Solar), SOCL (Social Media), USLV (Silver) and RUSL (Russia).
  • Thursday’s leaders – UCO (Crude Oil), SIL (Silver miners), GDXJ (junior gold miners), TAN (solar power) UGAZ (natural gas), and DBE (energy).
  • Wednesday’s Leaders – RUSL (down 4%), SOCL (down 0.7%), PALL (down 4.5%), FCG (up 1.4%), JMF (down 1.3%) I stated they gave a different look, and that look didn’t last for more than one day. FCG, natuarl gas stocks were the only follow through backed by natural gas moving up more than 4% on the day.
  • VIX back near 12, but VXX still on watch list.

Putting it all together we get some leadership from China and a break above resistance with a follow through, technically validating a trend reversal. Energy remains a leader as crude moves above $107. Solar energy is making a move and in position to break higher and resume the previous uptrend. Russia is following through at the Ukraine issues subside confirming the uptrend. As the dust settles the opportunities will arise. Watching these along with the downside as it all plays out short term.

EGG Model Watch List:

EGG Tracking…

  1. 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 tighter stops and watching.

Current EGG:

NO EGG Position Currently.

TAN is of interest on a clear move through the $42 level. The rise is oil prices will have this as a logical place for investor to want to extend investing opportunities on the move. Watching for the break higher and a confirmation. Entry is $42.30. Watch the volume on the purchase as it can run thin at times.