You Don’t Know What Pain Is!

Don’t look now, but Citi is once again attacking $47. This is a major, multi-quarter support level which I view as bulls needing to hold in order to prevent a bull-to-bear reversal.

Generally speaking, the more a price level is probed the more likely it is to eventually give way.

If you think the stock has been painful in recent months, a $47 breach may be just the start of the pain.

Still, in the large bank arena Well Fargo continues to give the bulls the best case for a rotation higher. The battle is still unfolding but Citi sure does love to tempt fate…and support.

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Back with some analysis in a bit. It is still quite sloppy out there in the leading parts of the tape.

I averaged into my Visa short inside 12631, just now, playing for the monster stock to finally test its 200-day moving average for the first time since…2011. Let that sink in for a moment.

On the updated daily chart, below, you can see that if my thinking is correct the descending triangle (light blue lines) suggests a nice downside reward if breached. In fact, I would expect a move well under $200, undershooting the 200-day.

Eventually, Visa is likely to set up an excellent long-term investment. Long-time readers of mine will recall in 2010 and 2011 when I flipped bullish on credit card plays like DFS MA for the long-term. However, they came too far too fast and have stalled out in recent months.

If I am wrong, my cover-stop is a hold over $225.

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The utilities remain, as a whole, incredibility resilient as a sector, benefitting from the rotation away from high beta, momentum names. This is all happening while individual ute ConEd is still a long-term topping candidate. The daily chart, first below, shows yet another bear flag in a steep downtrend. We have been looking at ED as a notable weak link in the sector for a while now.

On a standalone basis, ConEd is a short idea. But, overall, it will be interesting to see who this spread between ConEd and the sector at-larger resolves.

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For you night owls out there, here is an updated monthly chart about a name I have been too early wrong on, in terms of topping out. Still, i maintain that Union Pacific is offering a terrible risk/reward long idea for anything more than a very quick trade (1-2 days tops, if at all). I expect a quality short to present itself soon, whenever the stock cracks for a mean reversion, if only a garden-variety basic pullback.

What say you about the big rail?

Speak your mind, night owls.

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If we see weakness after the jobs report tomorrow I like Nike as a short, seen on the first daily chart, below threatening a crack below $74 from the bear flag. Also note the potential for a double-top in play after a multi-year, steep uptrend.

And regional bank TSC looks like a hidden gem on the long side, attempting to break higher from a tight base. Despite being thinly-traded in terms of volume, this one has distinguished itself from the otherwise-sloppy regionals.

Drop me your top tickers overnight.

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