Futures Dipping as BreakOuts Hold Up

After a rather sharp sell-off yesterday, futures are dipping a bit this morning as of 5:30 AM.

As seen on the chart of the Dow – the index fell below initial support of the previous highs.

In the event of a continued pullback, the next level of support is at the previous lows and the near-coinciding 50-day moving average, currently at 19649.

We have several companies reporting earnings (none of them ours) before the open such as; ExxonMobil (XOM), Mastercard (MA), Aetna (AET), Under Armour (UA), Sprint (S) and UPS (UPS).

Also of note, the U.S. Federal Reserve will kick off a two-day meeting to discuss interest rates and monetary policy, today.

Yesterday morning I said the focus will be on our recent breakouts, and it was.

I sent out a complete update before the open on all 9 of the BUYS we had last week, and another update at 3:15 PM.

All-in-all, these stocks held up rather well, especially with the Dow being down -200 midday, and then closing down -122.

Days like yesterday are the days where we see which of our holdings are showing strength/resilience versus which are showing weakness/breaking support.

Let’s take a look at how our 9 latest BUYS closed on Monday.

All 9 Stocks Which Properly Confirmed a BUY Signal Last Week

TXN – Held up as the market pulled back. Closed only fractionally lower.

Was an earnings breakout on 1/25. Those can be more rewarding, yet as noted – carry more risk. Shares did make several days of above average volume gains, however, Friday’s declines were noted as a bit of a concern.

Chart courtesy of stockcharts.com – Click chart to enlarge.

MRVL – Did pull back -1.19%, yet volume was below average (-20%) with no serious concerns.

Was a nice buyable gap open on Wednesday (1/25) with a +183% increase in volume.

Chart courtesy of stockcharts.com – Click chart to enlarge.

AGX – Continued pulling back, however, yesterday’s volume was tame.

Did pull back slightly after breaking out on Wednesday, yet volume was below average. Ranks remain nearly as high as they can be as the stock is NOT extended from support.

Chart courtesy of stockcharts.com – Click chart to enlarge.

ORBK – Did make some rather sharp declines yesterday of -2.3% as the broader market pulled back.

Volume came in just above average with a+37% increase.

Shares continued to climb since breaking out on Wednesday (1/25). Friday’s gains of +2.3% were rather impressive with a +47% increase in volume as the market was relatively quiet.

Chart courtesy of stockcharts.com – Click chart to enlarge.

EXP – Modest declines yesterday (-0.52%) however, there was an increase in volume (+44%).

This was an earnings breakout which gave us an entry the following day (1/25) after reporting as shares continued higher with the required volume.

Thursday’s and Friday’s pullback was noted as a concern, and this stock needs to be watched closely this morning for any continued deterioration.

Chart courtesy of stockcharts.com – Click chart to enlarge.

MLM – Considerable declines today of -1.9%, yet volume was below average.

Was a nice buyable gap open on Wednesday (1/25) as shares traded above our TRIGGER PRICE with the required volume. On Thursday and Friday, the stock posted some slight declines on lighter volume.

Chart courtesy of stockcharts.com – Click chart to enlarge.

FLEX – Holding onto the solid gains made on Friday of +4.6% with a +317% increase in volume.

Was a pre-earnings breakout. Then shares closed at new highs not seen since 2004.

The stock is extended from support, so any above average volume declines would be the first thing to watch out for.

Chart courtesy of stockcharts.com – Click chart to enlarge.

IR – Some slight declines yesterday as the volume came in just above the average rate.

More importantly, the company is scheduled to report earnings, Wednesday before the open.

Need to decide by today’s close, to HOLD through the announcement or to SELL.

Chart courtesy of stockcharts.com – Click chart to enlarge.

ASGN – Dipped just slightly below support of the 50-day intraday yesterday and then bounced to close near unchanged.

Shares confirmed a BUY signal for us on Tuesday (1/24), then inched higher for the next several days until Friday when shares sold off -4% with a +73% increase in volume.

As noted Monday morning – A break considerably below the 50-day ($43.78), or a close below there would be a SELL signal.

Chart courtesy of stockcharts.com – Click chart to enlarge.

I ran my routine stock screens this morning, and I added 1 new stock to the TrendLine SetUps WatchList. See here.

I removed SAVE from that same watch list as after the stock sold off on Friday -4.8% to a new recent low, shares fell a bit further from our TRIGGER PRICE of $60.50 yesterday.

All 3 of our watch lists have been updated.

At this point, we have 6 stocks on our Technical SetUps WatchList and another on our TrendLine SetUps WatchList. There continues to be 0 stocks which meet the strict criteria for the High-Ranked Leaders WatchList.

Of those 14 set-ups, DPZ actually broke out yesterday afternoon.

At 2:24 PM I had my assistant, Cess, email a BreakOut Alert to all members.

Volume at the time was noted as NOT on pace to have the stock confirm a BUY signal. By sessions’s end, the volume came in with a +28% increase; shy of the minimum +50% increase which we require.

I will continue to monitor this selection today as shares are already trading above the stock’s TRIGGER PRICE of $172.72. Any gains from here with volume that is at the least on pace to be +50% above the normal rate would have this leader confirming a default BUY signal up to the MAX BUY PRICE of $181.36.

We also have GHL with an earnings breakout on Friday which I noted in Monday morning’s report in the same fashion as DZP.

We shall see, and simply take what the market gives us.

 

ALL OF TODAY’S WATCH LISTS ALONG WITH
ANNOTATED CHARTS ARE HERE

 

Any questions or concerns, please email me at james@jamestaulman.com.