ONE EGG Scan for January 23rd

Nice move higher in response to the stimulus from the ECB. Now the follow through and more resistance within the trading range.

Sectors Worthy of Attention: 

Emerging Markets (EEM) broke higher on Wednesday without much fanfare, but the follow through on Thursday garnered attention. A test of the move could offer some upside opportunity going forward.

Gold miners have moved higher on gold prices moving higher. The are testing the move as investors ponder the sustainability of the move in the metal. Hedge your positions and let this unfold. I still like the upside for gold near term. Patience as it plays out.

SPY cleared the $204.20 level on the upside to follow through on the bounce and offered a good entry point for short term trade.

QQQ needs to clear the $102.50 level on the upside to follow through on the bounce and confirmed the upside trade short term.

REITS (IYR) continue to impress in the uptrend and added to the move on Thursday after a test.

Result for the Daily EGG Scan: 

Top of List for Thursday… SOXX – Semiconductors weren’t the best performer on the day, but based on our scans offer the best upside going forward… if the markets continue to move higher. The entry point of $92.80 is the level to watch on follow through today.

Others to note are… XLK – since technology includes the semiconductors it would follow that the broad sector offers upside as well. $41.50 is the next resistance level to move through on the index and one to watch. This offers a way to trade the move with less relative risk due to the diversification of subsectors overall.

IWM – Small caps made an impressive reversal on Thursday and is in position to clear the 1190 mark again on the Russell index or $118.50 for the ETF. The index has struggled to make the move to higher ground and hold the gains. Still worth our attention as an option.

FRIDAY: Futures are flat and investors will look for a follow through on the move from Thursday. Semiconductors offer the best trade option for the day and we will look to take a half position in SOXL if it unfolds today.

SOXL – entry $132. stop $128. target $142. Due to the leverage and volatility of the trade we will add 500 shares as trade. (SOXX volume is not enough to give us confidence in the size to trade overall.)