Monday, December 20, 2010

An Important Week For Stocks

Before I get into the events, here is the weekly chart of the S&P 500 ($SPX). You can see that prices are nearing extensions after a large move. These price levels do not have to be met and they do not have to offer resistance. There is significant timing the first part of January. An overbought market heading into early January would be of significant concern.

Near term, the markets have hit resistance. The NASDAQ 100 (NQ H1-D) has stalled out beneath a price extension the past 7 trading sessions. There is support not far below. The Mid Cap and Small Cap indexes are also sitting in similar trading ranges.

I want to look at the charts of some leading names. I will be doing more of this stalking of leadership next year.

Apple has been holding right above key support for over a week now. It needs to hold $318 or the next support is at $308.

Google has been stuck under a key price extension at $601 for a while. If this zone can be cleared, then things get pretty bullish. If not, then the low near $555 needs to hold.

Priceline has been stuck in a consolidation for several weeks. It needs to hold $389 to keep the uptrend intact. The 50-day is at $389. The 20-day needs to be cleared at $405 before anything good gets rolling.

Netflix is holding key support. There is timing for NFLX on Wednesday.

Amazon has had a shallow pullback into support. It is probably the strongest name right now.

Bank of America rallied into resistance and still remains in a nasty downtrend. Nothing good happens until $13.13 is cleared.

Baidu continues to fail, breaking through support after support. That is a pretty ugly chart.

Intel is camped out on top of key support.

You can see from these charts that this is a potentially significant week for stocks. Many leaders and key indexes are on top of support or stalling out at resistance. They face some pretty important decisions and will probably make them soon. I would love to see an overbought rally into early January to set up potential shorts.

No comments: