Weekly Technical Perspective
May 2, 2017
S&P JUNE FUTURES (SPM7)
2372, 2365-7, 2359-61 – Support
2393-4, 2402-3, 2424-5, 2448-9 – Resistance
In part two of this week's Weekly Technical Perspective, we take a look at nine stocks which are technically attractive long candidates, and can be held as part of a core portfolio for the weeks/months ahead. These are chosen based on proprietary technical methods incorporating momentum, structure, and all appear like attractive risk/rewards at this juncture. While these aren't the strongest of stocks necessarily, most have very attractive risk/reward profiles with several on the verge of potential meaningful breakouts back to new all-time highs. Targets and stops will be utilized, along with providing periodic updates, replacing stocks which violate support, while raising stops on the outperformers. Monday's close was used as a basis for initiating all these positions. These are listed below in alphabetical order.
Stock Target Stop
Aetna (AET -$136.78) $155 $124.75
Alphabet (GOOGL-$932.82) $1050 $824
Celgene (CELG- $124.06) $140 $118.50
Intel (INTC- $36.31) $44.38 $33.40
Monsanto (MON-$116.87) $125, 145 $111.75
Moody's (MCO- $117.90) $125 $110
Oracle (ORCL- $45.09) $55, 70 $42.25
Starbucks (SBUX- $60.18) $65.50 $57.00
Union Pacific (UNP- $111.60) $125 $102.25
Aetna (AET- $136.78)
Aetna looks quite attractive at current levels after breaking out above the highs of a bullish Cup and Handle formation which had been in the process of being formed since June 2015. Highs had already been tested twice before in this formation before CELG managed to exceed former highs, rising to new all-time highs on 5/1/17. The consolidation over the last few years appears like a typical "Wave-4" type pattern which now is giving way to the final push higher of the rally which began back in late 2008, over eight years ago. Minor pullbacks should be used to buy in formations of this sort as the pattern breakout targets an area near $155, an initial area to consider partial profit-taking and/or raising stops. Pullbacks would be used to buy near $133-$135 while a decline under $124.75 would be necessary to postpone this rally and represent a technical stop-out to this idea. Currently, given the attractive two-year base following the lengthy rise from 2008, a breakout above these highs since 2015 is a bullish development, and AET should be overweighted for additional upside in the weeks/months ahead.
Alphabet, or Google, as many still refer to it, has begun to accelerate lately after exceeding the highs of a near two-year period of range-bound consolidation that held since 2016 and has now begun to trend up in a sharper, more parabolic fashion. While the uptrend in GOOGL looks very much intact, the period from late 2015 into early this year was largely mired in range-bound consolidation. GOOGL had barely made much progress from Fall 2015 until January of this past year, with prices sticking within 4% of the $800 mark for well over a year. It's acceleration in the last month has caused near-term momentum to begin to accelerate, and now reach overbought levels. However, no evidence of technical resistance lies short of $1000 and no counter-trend indications of upside exhaustion are present. Therefore, it's considered an appealing intermediate-term to long-term buy at current levels, and would become an excellent short-term buy on any weakness down under $900 in the next few months. Upside targets initially lie near $1000, but intermediate-term levels to consider lie near 1050-1075 in the next 12-18 months technically speaking.