ONE EGG scan for June 6th

Markets trade lower at the open, but again find a way to rally the balance of the trading day, again. This is a recurring theme for the broad indexes and leadership remains the same sectors with financials joining the upside. No rotation of note and overall still drifting higher.

Running the EGG Scans – First the daily winners…

  • TNA – Small Caps posted a solid gain and pushed through resistance putting the growth stocks back in favor near term. Though trade with the volatility in the ETFs
  • URE – Real Estate had a positive break to new high and solid follow through. Still love the trade.
  • EURL – Europe rallies on the Draghi impact as the ECB adds more stimulus. Trade opportunity.
  • IWC – Microcap rallied nicely on the back of the small cap move. Look for follow through on move above $73.
  • ROM – technology hit new high and added nicely to the uptrend in play.

No changes in the moves in China, SOX, technology, natural gas, insurance, financials, banks, midcap or India, just more joining the upside as the move broadens in breadth. Rotation is spreading out on what many are believing to be the next rally in the broad indexes.

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.
  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. Stop $31.15. News pushed the stock up 12% on Monday at the open. 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 on Tuesday and follow through on Wednesday.

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 $32.