EGG Scan for June 23rd

Lazy day of trading on Friday for options expiration, but in the end the buyers were still willing to step in and add positions. Some pressure on the leaders and commodities hold their move higher. As we look forward to the trading week the scans reflect what we have been seeing the last two weeks. And the we will continue to focus where the momentum resides, but also where it is rotating to. As we have discussed in the webinars over the last three weeks, understanding the markets current personality and beliefs is key to trading short term moves and capturing longer term trends. I address this in the markets Story in the Monday trading notes.

Gold and Silver both held their gains from Thursday and remain in good shape to run higher… if the issue in the Middle East continues and the Fed and central banks around the world allow inflation to creep higher. It is all speculation at its best. This is a high risk trade, but one worth taking with stops to protect the downside risk.

We discussed the scans not showing rotation as much as broadening of breadth in this market currently. That is good overall and it will eventually result in specific leadership as well. We just have to be patient and look for where the rising trends are accelerating.

Running the EGG Scans – First the daily winners…

  • Friday’s leaders – BIB (Biotech) broke from trading range, PJP (Pharma) continuation of move higher, TAN (Solar) continuation of uptrend, IEZ (Oil Services) acceleration in uptrend and Cooper (JJC) base metals moving off lows. Healthcare sector was primary leader on Friday and showing some renewed strength in the current move.
  • Thursday’s leaders – NUGT/GDX/GDXJ – (Gold Miners) gold jumps 3.5% and the miners 16%, USLV/SIL (Silver) up 13.8%,  TBT (Short Treasury bonds) up on yields rising, EWJ (Japan) nice follow through on continuation breakout, and EPU (Peru) breakout from consolidation,
  • Wednesday’s leaders – RUSL (Russia) bounced back 7.5%, NUGT (Gold Miners) jumped 7.6%, SVXY (volatility disappears again), EDC (Emerging Markets) Nice bounce, GREK (Greece) nice bounce off test in move higher. Honorable mention XLU (Utilities) nice bounce through resistance.
  • Tuesday”s leaders – TAN (Solar), PBW (Clean Energy), SVXY (short VIX), TNA (Small Caps) and FAS (Financials). Honorable mention KRE (Regional Banks) & KRE (Banks).
  • Monday’s leaders – UPW (Utilities), XBI (biotech), IHI (Medical Devices), TAN (Solar) and DIG (Energy). IHI benefited from the acquisition in the sector. TAN is EGG today.
  • 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.

Looking at the last couple of week of scans above we have to look for common ground and the sectors with the best upside or downside momentum. Energy, Alternative Energy, Precious Metals, Utilities, Healthcare and Short VIX are the leaders. Looking to next week we will look for those that continue this upside push.

EGG Model Watch List:

EGG Tracking… Stock recommendation follow up.

  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 $37.75 on balance of shares. Topping and volume falling back to normal tighter stops and watching.

Current EGG:

TAN is the Egg Model at $42.30. Solid move higher on Tuesday and followed by some testing and closed higher on Friday. The interest in the sector invited money short term. The bounce off support near the $43.70 mark was of interest and the level we watch going into this week of trading. Held our positions and watching to see if we need to lessen our exposure Monday. Oil prices did bounce back above the $106 level and Iraq is still a big question mark looking forward.  We have adjusted the stop and watching to see how it follows through.