ONE EGG Scan for November 21st

Sectors Worthy of Attention: 

Uranium (URA)¬†Got the big lift higher last week on the¬†comments about building nuclear power again¬†around the world and¬†the price jumped more than 20%. The action redefined a reversal on the move.¬†Thanks to the comments from Japan about restarting their nuclear energy fleet. CCJ is the company who announced the plans for the 48 reactors in Japan. There are only 11 stocks in the ETF fairly easy to scan for the leaders.¬†Tested lower and then follow through on the upside… Clear $14.20 on the way higher. Wednesday started to test the move on the upside again and needs to hold the $13.20 level as support.

Energy (XLE) is still reacting to oil as it attempts to define direction among the speculation.¬†The stocks¬†remain near¬†the $86 level¬†and working.¬†Worries returned as Saudi Arabia made statements to not worry about prices… plenty of supply. That speculation had a new spin on Friday with OPEC supposedly willing to cut supply. Oil has traded on both sides of¬†the $75 mark and USO is testing the previous lows again. Still a negative sentiment overshadowing some buying in the energy sector.¬†ETFs to Watch: USO, XOP, OIH, IEO, ERX or ERY. ¬†TODAY: Rallied 1% and moved back above the $86 level. Positive day for sector and crude oil.

Basic Materials (XLB) Рcommodities, and the energy sector have been a weight on the sector, but made a move technically and cleared the $48.50 level. ETFs to Watch: XLB Рmade move above $48.50. Hit the entry point and nice follow through on the move.  TODAY: Continued the upside and looking positive short term with upside still in play.

Consumer Discretionary/Retail broke higher last week and continues higher this week after a bumpy start. A move through the $68 level on XLY got the upside catalyst from earnings and remains on the upside. XRT is of interest as well with the move above the $90 level being tested currently. Still like the outlook through the first quarter. TODAY: Building the uptrend as we wanted into the holidays.

Biotech fell last week in response to the elections on belief the Republican controlled Senate would attempt to make changes in the Affordable healthcare bill. Reality of that happening short term is not great assuming a President who passed the legislation is still in the White House. Could present opportunity on the selling short term. ETFs to Watch: IBB, BIB, BIS, XBI. Need to be patient and let this consolidation unfold. TODAY: Staying in the range and working through the consolidation period.

SOXX – Semiconductors¬†completed the ‘V’ bottom pattern and is stuck in small trading range looking for the upside catalyst.¬†This can still go either way, but the move Friday boost the outlook on the upside as the technology sector rallied overall. You can trade SOXX, SMH or SOXL on the break higher in the sector.¬†TODAY: Got the move higher with testing on Wednesday and nice follow through higher again on Thursday.

UGAZ Рnatural gas made another bottom reversal following some selling last week. Got the follow through and trade opportunity on Monday. ($14 potential entry to trade.) Gapped through that level on the open, but still offered a reasonable entry at the $14.70 level. $16.30 resistance is the level to watch now. TODAY: Moved back to the highs near the $18.10 mark. Still upside if we can break through this level and follow through.

MLPs Рmade solid move across the sector. AMLP, CTR, MIE, JMF and MLPL all made solid moves on the upside. Sector to watch going forward.

Global gained upside traction last week, but¬†… TUR, EWH, EWL, EWS, EWN, EWT – all tested the moves.¬†Watching to see how the global markets settle near term. EWG brokeout on Tuesday and held as Europe rallied on the economic data. Watching for the trades in the sector. EWZ making bottom reversal¬†move or start on Wednesday.

Running the Daily EGG Scans: 

Gold was flat, but the miners bounced back from the aggressive selling on Wednesday. Still a positive outlook for the miners assuming gold holds these levels and continues work higher. GDXJ or GDX non-leveraged ETF long-term holding. Silver miners (SIL) on the list as well for the mining stocks.

SOXX – semiconductors are back at the high as we posted on Tuesday. Watching for the follow through on the move. Intel led the upside for the sector with big gain on the day.

UGAZ/UNG – natural gas… we have been tracking this for a couple of weeks and it continues to work through volatility day to day and speculation on direction. The upside is winning, but you have to have nerves of steel to hold this position. UNG is still in play as the upside of natural gas is being favored by winter weather predictions and currently. Longer term view is positive.

ITB – homebuilders make break from the consolidation and move higher. This is a positive for the sector and the longer term view of the sector. If the prices hold, interest rate remain low and inventory is growing… high sales. Good for all.

XRT – Retail tested the $90 level and found support and has now resumed the upside for the holiday’s. I still like the trend and the push that will come from what looks to be a positive sales outlook.

IWM – Small caps? Are they back for real or just another bounce in a distribution phase for the sector? Watching for the opportunity if it develops and that would have to hold the move higher from Thursday. $116.70 key level to gain and hold.

XBI – Biotech made nice move on the day, but remains in the consolidation pattern of a wedge or triangle. Break above the $174 level would be of interest for a continuation of the upside. IBB in similar position and needs to move above the $297 level.

Current EGG Proposed:

* Adding GDX to the table on the move in the price of gold. The miners offer better upside potential is GLD moves to the short term target of $119.50. The dollar will play a role in the price of gold as the test lower in the buck has been a positive for gold. Throw in some positive global news helping the euro and other currencies near term. Be disciplined with your entry and don’t chase a gap open.

Collapesed lower on Wednesday in light of the Fed anticipation or whatever else you would like to believe. Thursday bounced back and produced an inside day on the bar chart. That means follow through tomorrow on the upside? That is what we are looking for from the move. We would reduce our entry point to the $20.30 if we get the move to follow through upside.

Previous Posts:

1)  ITB РHome Construction wants to break from consolidation and looks ready to move higher. Positive news in the sector the last two weeks has been keeping the upside as a possibility. Hit the entry and we have left the trade posted on the table. We did not get executed in the trade due to volume issues for the size we were trading. Very thin volume on the test and could not get the fill we needed on the trade. If you took the entry manage it out based on the post. Use stop of $25 currently. Holding above the $25 mark currently. Jumped on existing home sales today and move through the resistance. Watch and manage your stops accordingly.