ONE EGG Scan for May 30th

Thursday closes higher despite some sluggish activity again. The NASDAQ hit it’s March peak erasing the 9% decline. So much for the disdain of growth stocks right? Not really the large caps have been carrying the load on the upside with plenty of work or recovery needed in sectors like biotech and internet. Thus, the egg had the right position with the NASDAQ 100 the last week. Now we get to see how this plays out going forward.

Running the EGG Scans – First the daily winners…

  • TAN – the solar stocks come back to life. This was added to the pattern trade list on Wednesday on the test of the bottom reversal.
  • ERX – Energy made the move from the trading range and returning to the previous uptrend. Equipment and services sector starting to move.
  • TUR – Turkey remains one of the top performing country ETFs. EWS showed up as well.
  • FXG – Consumer staples get a boost on the day and move to a new high.
  • FCG – Natural Gas stocks following the bump in natural gas commodity on rise.

Some new moves off lows, some previous leaders returning as the market continues to trade higher despite bad economic data. The faceless rally is based on a lack of sellers interested in fighting the trend, regardless of the data. Take what the market gives and manage your exit points.

EGG Model Watch List:

EGG setup going forward…

  1. ERX – Energy is rising again and follow through today would be positive entry point for the sector ETF. Entry $111.25. max entry $112. Target $118. Stop $110.
  2. SOXL – Semiconductors. (SOXX, SMH)  entry $90.20. stop $87.80. This gapped above the entry point on Tuesday. Still looking for test or reasonable entry point. No test and still showing upside move. Volume has moved down, look for test today?
  3. PJP – Pharma (breaking from consolidation and gaining momentum.) 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.
  4. BRCM – giving the best look relative to the semiconductors leadership. $31.15 entry on Wednesday 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 on Thursday (entry $31.50) and then faded into the close watch how it follows through today.

Current EGG:

QLD is still in play for those who took the trade. Played out well in the end despite the shaky start. Recommended selling part on Tuesday (sold 1/2 at $106). Nice upside on Thursday, but the volume died after lunch. The stop is $106 based on the close and need to manage into the open today. Focus on the simple not what you think may happen looking forward. Protect the gain for now. I added 1 share to the table to track the trade out for those who entered the position, adjust your stop and manage the position out.