PHM (PulteGroup) at 6.13 Extends Rally on Break Above the 3-week Bear Trendline (BUY)

PHM extended the rebound off the 5.08 low (23 Nov 2011) to break above the 3-week bear trendline resistance (from 11/18/25 Nov 2011 weekly highs), initiating the next upleg towards 7.03 (Resistance 1) near the double bottom pattern (at 3.40/3.29 lows) target measured from 5.16. Clearance above would open 7.97 (Resistance 2) near the equality target of the upswing (from 3.29/6.04) for a retest.

Meanwhile, failure to sustain strength above the 6.04/6.13 resistance would delay and re-opens 5.08 (Support 1). A downside break there is needed to avert the upside and expose 4.72 (Support 2) ahead of 3.29 (Support 3).

Trading Indication:
Short-term: Buy at 5.55 or lower;
Target at 7.90 and higher;
Stop Loss at 5.45 (1.50%)
Long-term: Possibly sell higher

WMT (Wal-Mart Stores) at 58.18 Breakout of A 11-month Bear Channel on the Weekly Chart Underpins Rally (BUY)

WMT extended the rebound off the 49.94 pivot low (23 Sept 2011) to break above the 11-month bear channel resistance (from 57.90/56.03 highs/50.97/48.31 lows) on the weekly chart before consolidating. With the weekly trend studies still constructive, a higher swing low is anticipated to form above 49.94 ahead of a return through 56.39 (Resistance 1). Further strength above the latter would allow bulls to retest 57.90 (Resistance 2). An upside break there would confirm a base in place and initiate the next upleg towards 59.23 (12 Dec 2008 high, Resistance 3) which guards the 3-year range high at 63.85 (19 Sept 2008 peak, Resistance 4).

However, a break below 49.94 (Support 1) would delay and reopens 48.31 (Support 2) near the bear channel support. Only a downside break there would avert the upside and expose the key 3-year range low at 46.25 (06 Feb 2009) for a retest (Support 3).

Trading Indication:
Short-term: Buy at 51.00 or lower;
Target at 57.90 and higher;
Stop Loss at 50.00 (2.0%)
Long-term: Possibly sell higher

BA (Boeing) at 64.90 Potential Bear Channel Formation on the Weekly Chart Points Lower (SELL)

BA extended the decline off the current cycle (2009-2011) high at 80.65 (06 May 11) decisively through the 15-month bull trendline support (from 59.48/61.84/62.82 lows shown as pink line) to confirm a double top formation (at 76.00/80.65 highs). It reached 56.01 (12 Aug 11) before consolidating within a bear channel (67.73/68.76 highs/56.01/56.90 lows). A clean break below the 56.01/56.90 channel support (Support 1) is required to confirm the bear channel formation and initiate the next downleg towards 54.80 (Support 2) near 50% of the 29.05/80.65 rally then 47.18 (Support 3) near 61.8% retracement and close to the 47.33 double top target measured from 68.50 (bull trendline break) as well.

It would take strength above the key 68.76/71.63 resistance zone (Resistance 1) including the channel upper bounds and the pink bull trendline resistance (former support) to negate and confirm a base, shifting focus higher towards 78.35 (Resistance 2) ahead of 80.65 (Resistance 3) for a retest.

Trading Indication:
Short-term: Sell at 68.90 or higher;
Target at 47.18 and lower;
Stop Loss at 70.10 (1.70%)
Long-term: Possibly buy lower

UUP (PowerShares DB US Dollar Index Bullish) at 22.43 A Potential Higher Low on the Weekly Chart Signals Further Upside (BUY)

UUP extended the rebound off the 21.07 low (27 Oct) on the weekly chart to seek a retest of the 22.62 high. The bullish MACD studies suggest further upside. A clean break above the latter (Resistance 1) would confirm the higher low at the 21.07 low and initiate the next upleg towards the 23.40/23.52 resistance zone (Resistance 2). Clearance above there would allow bulls to target 24.22 (Resistance 3).

However, in the event of a break below 21.58 (Support 1) would delay and reopens 21.07 (Support 2). Only a downside break there would avert the upside and expose the key 21.03/20.84 support zone for a retest (Support 3).

Trading Indication:
Short-term: Buy at 21.80 or lower;
Target at 23.52 and higher;
Stop Loss at 21.58 (1.0%)
Long-term: Possibly sell higher

INT (World Fuel Services Corp.) at 39.42 Confirmed a Double Top amid Bearish RSI Divergence to Point Lower (SELL)

INT extended the decline off the 42.12 high (11 Nov 2011), just shy of the 42.15 peak (25 Feb 2011), through the 39.23 pivot support to confirm a double top formation (at 42.03/42.12 highs). Further weakness below 36.70 would expose the 37.00 higher low (Support 1). A breakdown there would open 35.10 (Support 2) which guards 31.58 (Support 3).

It would take strength above 40.00 (Resistance 1) to delay bears. However, only above 40.66 (Resistance 2) would negate and shift focus higher towards 42.12(Resistance 3) for a retest.

Trading Indication:
Short-term: Sell at 39.70 or higher;
Target at 37.00 and lower;
Stop Loss at 40.10 (1.0%)
Long-term: Possibly buy lower

SPRD (Spreadtrum Communications) at 23.56 Confirmed a Double Top amid Bearish RSI Divergence Points Lower (SELL)

SPRD extended the decline off the record high at 29.98 (16 Nov) decisively through the 25.50 pivot support to confirm a double top formation (at 28.75/29.98 highs). The bearish RSI divergence (comparing 28.75/29.98 highs) suggests further downside as well. Further weakness exposes 20.65 (Support 1) near the rising trendline support (off 8.59/16.52/16.11 lows) and close to the 21.50 double top target measured from 25.50. A breakdown below there would open the 16.11/16.52 support zone (Support 2) near the 61.8% retracement of the 8.59/29.98 rally.

It would take strength above 26.96 (Resistance 1) to delay bears. However, only above 29.39 (Resistance 2) would negate and shift focus higher towards 29.98 (Resistance 3) for a retest.

Trading Indication:
Short-term: Sell at 26.40 or higher;
Target at 20.65 and lower;
Stop Loss at 27.00 (2.3%)
Long-term: Possibly buy lower

ULTA (Ulta Salon) at 69.02 Potential Rising Wedge amid RSI Bearish Divergence Points Lower (SELL)

ULTA extended the decline off the record high at 75.69 (07 Nov) to test the 3-month rising wedge support line (from 48.28/51.64/64.03 lows) which held. However, the bearish RSI divergence (comparing 74.00/75.69 highs) suggests further downside. A downside break of 67.76 near the rising trendline support is required to confirm the top in place and allow bears to target 64.03 (Support 1). Clearance below would risk an extension towards 58.71 (Support 2) ahead of 51.64 (Support 3).

It would take strength above 71.71 (Resistance 1) to delay bears. However, only above 74.38 (Resistance 2) would negate and shift focus higher towards 75.69 (Resistance 3) for a retest.

Trading Indication:
Short-term: Sell at 70.80 or higher;
Target at 58.71 and lower;
Stop Loss at 71.75 (1.3%)
Long-term: Possibly buy lower

CVX (Chevron Corporation) at 100.96 Potential Double Top Pattern Underpins Further Downside (SELL)

CVX extended the decline off the record high at 110.01 (27 Oct) to probe the key support zone of 100.58/100.79/100.74, stalling at 100.74 (16 Nov low). A clean break of the key 100.74/100.79 support levels is needed to confirm the double top formation at 110.01/109.00 highs. A downside break there would allow bears to seek 96.25 (Support 1). Clearance below would risk an extension towards 92.72, near the projected double top target at 91.57 (Support 2) ahead of the key 86.68 reaction low (Support 3) for a retest.

It would take strength above 103.42 to delay bears. However, only above 107.33 (Resistance 1) would negate and shift focus higher towards 109.00 (Resistance 2) which guards 110.01 (Resistance 3).

Trading Indication:
Short-term: Sell at 102.50 or higher;
Target at 92.72 and lower;
Stop Loss at 103.50 (1.0%)
Long-term: Possibly buy lower

UMC (United Microelectronics Corp) at 2.24 Imminent Breakout of a Symmetrical Triangle Consolidation Points Higher (BUY)

UMC rallied out of the 3-month base (05 Aug-21 Oct) to reach 2.36 (27 Oct high) before consolidation took hold. The recent 13-day range has taken shape of a symmetrical triangle (joining 2.36/2.29 highs/2.07/2.14 lows). A break above 2.25 (Resistance 1) would confirm the breakout of the triangle consolidation and initiate the next upleg towards the 2.29/2.36 resistance zone (Resistance 2). Clearance above would offer scope for 2.54 (Resistance 3).

However, if bulls fail to sustain gains above the bear trendline (off the 2.36/2.29 highs), a downside reversal below 2.14 (Support 1) would dampen the bullish outlook and re-open the key 2.07 support (Support 2). A breakdown there would suggest near-term topping and shift focus lower towards 1.84 which guards the 1.77 YTD low (Support 3).

Trading Indication:
Short-term (or Intraday): Buy at 2.18 or lower;
Target at 2.36 and higher;
Stop Loss at 2.14 (2.0%)
Long-term: Possibly sell higher

HOLI (Hollysys Automation Technologies) at 8.49 Breakout of Rounded Bottom Pattern Underpins Further Rally (BUY)

HOLI extended the rebound off the 4.54 low to confirm the rounded bottom formation on break above the key resistance level at 7.50. The subsequent rally reached 9.26 before consolidating. An upside break above 8.70 near the bear trendline (off the 9.26/9.11/8.97 highs) would end the consolidation and initiate the next upleg towards 9.26 (Resistance 1). Clearance above would re-open the 10.50 pre-gap low near the mearsured target of the rounded bottom base (Resistance 2). Further strength there would offer scope for 11.54 (Resistance 3).

However, a break below the key 7.55/7.50 support zone (Support 1) would negate and re-open 6.30 (Support 2). Further weakness there would allow bears to seek 5.20 (Support 3) for a retest.

Trading Indication:
Short-term (or Intraday): Buy at 7.65 or lower;
Target at 10.50 and higher;
Stop Loss at 7.50 (2.0%)
Long-term: Possibly sell higher

DLTR (Dollar Tree) at 78.67 Bear Channel Resistance May Cap for Further Consolidation (Short-term SELL)

DLTR has been descending within a bear channel (from 25 Oct/08 Nov highs/26 Oct low) since posting the 82.49 YTD high (25 Oct). While the 79.51 level near the bear channel resistance (10 Nov high) caps, further consolidation towards 77.32 is anticipated (Support 1). A break below there would open 76.32 (Support 2) ahead of 72.30 (Support 3) where a potential swing low would be formed before buyers would reassert.

However, a sustained break above the 79.51 resistance (Resistance 1) would negate and confirm the breakout of the bear channel. Clearance above would allow bulls towards 80.92 (Resistance 2) which shields 82.49 for a retest (Resistance 3).

Trading Indication:
Short-term: Sell at 78.80 or higher;
Target at 76.32 and lower;
Stop Loss at 79.51 (0.9%)
Long-term: Possibly buy lower

TSCO (Tractor Supply) Potential Double Top amid Bearish RSI Divergence Points Lower

TSCO formed a potential double top reversal pattern (from 74.51/74.43 highs ) amid bearish RSI divergence. A downside break below 71.21 would expose 66.15 for a retest (Support 1). A breakdown there would confirm the double top pattern and initiate the next downleg towards 65.11 (Support 2) ahead of 58.49 (Support 3) which is near the double top pattern’s measured target at 58.00.

However, recycle strength above the 74.43/74.51 resistance zone (Resistance 1) would negate and allow bulls to seek the Fibonacci target at 76.34 (0.618x 58.49/74.51 from 66.15, Resistance 2) then the equality target at 82.62 (1.000x 58.49/74.51 from 66.15, Resistance 3).

Trading Indication:
Short-term: Sell at 73.50 or higher;
Target at 66.15 and lower;
Stop Loss at 74.50 (1.5%)
Long-term: Possibly buy lower

ZAGG (ZAGG) Bearish MACD points to further downside at 12.03 (SELL)

ZAGG extended the decline off the 14.00 high through the bearish rising wedge lower bounds (from 18/24/26 Oct lows) to test the 11.60 key support ahead of the current consolidation. In the meantime, the bearish MACD studies suggest further downside as well. A breakdown below 11.60 (Support 1) would initiate the next downleg towards 10.02 (Support 2). Clearance below would risk an extension towards 9.00 (Support 3) for a retest.

It would take strength above 12.75 (Resistance 1) to negate and re-open 13.33 (Resistance 2) which guards 14.00 (Resistance 3).

Trading Indication:
Short-term: Sell at 12.00 or higher;
Target at 10.02 and lower;
Stop Loss at 12.50 (2.0%)
Long-term: Possibly buy lower

LNKD (LinkedIn) at 80.10 Confirmed a Triple Top Reversal Pattern amid Bearish RSI Divergence (SELL)

LNKD extended the decline off the triple tops at 92.61/95.00/94.32 through the support zone of 82.99/83.60, confirming the triple top reversal pattern. In the meantime, the bearish RSI divergence (formed from 92.61/95.00 highs) suggests further downside. While the tough resistance at 85.49 near the former 82.99/83.60 support caps, scope remains for bears to seek 75.37 (Support 1). Clearance below would risk an extension towards the projected triple top target at 72.20 (Support 2). A breakdown there would expose the key 70.75 reaction low (Support 3) for a retest.

It would take strength above 85.49 (Resistance 1) to negate and re-open 91.33 (Resistance 2) which guards 95.00 (Resistance 3).

Trading Indication:
Short-term: Sell at 84.10 or higher;
Target at 72.20 and lower;
Stop Loss at 85.50 (1.7.0%)
Long-term: Possibly buy lower

RTH (Merrill Lynch Retail Holders) at 110.86 Staging a Bull Flag Breakout to Target the Record High (BUY)

RTH extended the rebound off the 106.61 low to break above the bear channel resistance (from 113.28/112.37/111.82 highs), ending the bull flag consolidation pattern. The upside break initiated the next upleg towards 113.28 for a retest (Resistance 1). Clearance above would re-open the 114.30 all-time high (13 May 2011) (Resistance 2). Further strength there would offer scope for the Fibonacci projection at 115.91 (0.618x 98.57/113.28 from 106.61, Resistance 3) ahead of the equality target at 121.63 (1.0x 98.57/113.28 from 106.61, Resistance 4).

However, a break below 108.61 would negate and expose 106.61 (Support 1). A clean loss there would confirm a lower swing high under the 113.28 resistance and risk a deeper setback towards 104.57 (Support 2). Further weakness there would allow bears to seek 98.57 (Support 3) for a retest.

Trading Indication:
Short-term (or Intraday): Buy at 109.80 or lower;
Target at 114.30 and higher;
Stop Loss at 108.60 (1.0%)
Long-term: Possibly sell higher