TLT (iShares Barclays 20-year Treasury Bond ETF) at 118.17 Weekly Reversal Candle Points Lower (SELL)

TLT extended the decline off the 124.02 high (19 Dec), just shy of the 125.03 all time high (04 Oct 2011), to form a weekly reversal candle last week. With the MACD trending downward and RSI falling, further downside is anticipated. Concerted weakness below 115.08 (Support 1) would expose the key support at 109.82 (27 Oct low) (Support 2) for a retest. Only a downside break there would confirm the potential double top at 125.03/124.02 highs and initiate the next downleg towards 106.08 (Support 3) ahead of 102.95 (Support 4) near 61.8% retracement of the 88.14/125.03 upswing.

It would take strength above 124.02 (Resistance 1) to delay bears and shift immediate focus back towards the 125.03 record high (Resistance 2). Clearance above would suggest a 3-month base in place and allow bulls to seek the equality target at 128.91 (109.82/123.05 from 115.08).

Trading Indication:
Short-term: Sell at 120.80 or higher;
Target at 109.82 and lower;
Stop Loss at 122.90 (1.7%)
Long-term: Possibly buy lower

BP (BP p.l.c) at 43.58 Breakout of a Weekly Bullish Flag Pattern Points Higher (BUY)

BP extended the rebound off the 33.62 low (04 Oct 20110) to reach 45.83 before consolidating to form a 6-week bear channel. The breakout above the channel resistance (from 45.83/44.89 highs/39.41 low) confirmed the bullish flag pattern, initiating the next upleg towards 44.89 for a retest (Resistance 1). Clearance above would offer scope for the 47.09/49.50 resistance zone (Resistance 2), near the 48.15 Fibonacci target (1.618x 33.62/45.83 rally from 40.60), which guards the 52.00 key resistance level (Resistance 3).

However, failure to sustain gains above 40.60 would delay bulls and reopens the key 39.41 support (Support 1). A downside break there would avert the upside and expose 33.62 for a retest (Support 2). Further weakness below the latter would signal the end of the consolidation and risk a deeper setback towards 26.75 (Support 3).

Trading Indication:
Short-term: Buy at 41.40 or lower;
Target at 44.89 and higher;
Stop Loss at 40.60 (1.9%)
Long-term: Possibly sell higher

LULU (Lululemon Athletica) at 48.30 Forming a 20-week Bear Channel above Key Level (S-T SELL)

LULU extended the decline off the record high at 64.49 (22 Jul 2011) within a bear channel (from 64.49/59.46 highs/44.27 low) to reach 41.71 (02 Dec 2011) ahead of the 41.18 key level (as shown in pink line) where consolidation took hold. With the trend indicator still negative, a potential swing high under 54.98 near the bear channel upper bounds is anticipated ahead of a retest of the key 41.70/41.18 support zone (Support 1). In the event of a breakdown there, risk is seen for an extension towards 36.35 (Support 2) ahead of 21.27 (Support 3). However, if the key 41.70/41.18 support zone holds, concerted strength above the 54.98 resistance (Resistance 1) near the upper channel bounds would re-open 59.46 (Resistance 2) which, if reclaimed, would confirm the breakout of the bear channel and extend the bullish continuation towards a 64.49 retest (Resistance 3) and higher.

Trading Indication:
Short-term: Sell at 54.00 or higher;
Target at 41.00 and lower;
Stop Loss at 55.00 (1.90%)
Long-term: Possibly buy lower

F (Ford Motor) at 10.63 Breaking above a 5-week Bear Trendline for a Potential Retest of 12.65 (BUY)

F fell from the 12.65 high (24 Oct 2011) to test the 10-month bear trendline support (former resistance off the 18.88/16.18/14.22 highs) which held. The subsequent rebound off the 9.75 low (25 Nov 2011) broke above the 5-week bear trendline (from 28 Oct/11//18 Nov highs 2011) to suggest that consolidation would continue. As the weekly trend/momentum studies remains bullish, there is scope for further strength towards the 12.65 range high (Resistance 1). Clearance above the latter would confirm a base in place and shift focus higher to 14.22 (Resistance 2) ahead of 16.18 (Resistance 3).
However, failure to clear 12.65 would delay bulls and reopens the key 9.75 support (Support 1). A downside break there would avert the upside and expose the 9.05 range low at 46.25 (04 Oct 2011) for a retest (Support 2). Further weakness below the latter would signal the end of the consolidation and initiate the next downleg towards 6.61.

Trading Indication:
Short-term: Buy at 10.00 or lower;
Target at 12.65 and higher;
Stop Loss at 9.80 (2.0%)
Long-term: Possibly sell higher

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