[youtube:http://www.youtube.com/watch?v=v6mfDJ02VCY&feature=related 550 412] ______________
Over the past two months, I have written several posts analyzing MasterCard in multiple timeframes. I have been building a position in the name over the last week, and I am looking for a continued breakout from a clean symmetrical triangle on the weekly chart. Note that this play also fits with my thesis for financials to start to catch a bid soon.
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By far, the most prevalent bullish setup that I have been seeing over the past few days has been the cup and handle formation. Essentially, the pattern revolves around a well-defined line of resistance, with plenty of time to shake weak hands out before eventually propelling much higher. Simply put, it is a bullish continuation pattern. We are looking for a smooth, “U-shaped’ cup with strong buyers presenting themselves in a meaningful way on the right side of the cup and the right side of the handle. Also, the handle should not take too long to form.
Consistent with the theme of the precious metals performing admirably, two of their charts are presented below, along with near field communications semiconductor, NXPI. They should all illustrate a basic cup and handle setup.
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[youtube:http://www.youtube.com/watch?v=Gq1y5nMj8wY&feature=related 550 412] _____________
The bulls are continuing their impressive performance today, with plenty of individual issues continuing to set up and break out on solid volume. At the same time, it is not quite the “everything screaming higher in unison” type of market that we saw early last fall. Indeed, stock picking skills are being rewarded here. In particular, the gold space is attractive. I am playing AAU right now, and have my eye on several other miners that are poised to breakout as well.
Below, the 3 minute intraday chart of the SPY shows a pretty smooth drift higher today, with some strong buyers coming in around noon. Hence, swing shorting remains a very tough proposition.
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The healthcare IT space is seeing some impressive price action. However, the real noteworthy aspect of the group’s run up is the heavy buying volume, indicating accumulation by institutions. In the abstract, these plays seem like “can’t miss” opportunities. After all, it is inevitable that medical records will undergo the process of shifting from pen and paper to residing entirely in electronic databases and servers. As usual, though, I will wait for the market to tell me when to start really believing in a fundamental thesis.
In this case, the price action and volume patterns are too strong to ignore. CERN MRGE (Just tell ’em large Marge sent ya!) and QSII are too extended for me to chase right here, right now. MDRX, though, is at the top of my watchlist. With that said, I am watching all four names closely for entries, and would welcome any benign dip or flag to ride alongside the buyers of size who apparently want in badly to the medical records electronic overhaul thesis.
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Needless to say, I am very impressed with the continued outperformance of the silver to gold miners. With that said, the junior gold miners look ready to break out in their own right. I did a video for 12631 subscribers over the weekend discussing both.
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