After a violent and brief correction that seems to be over, stock charts seem to be looking much better. In fact, if it were not because this is a bad week for markets, I would say they looked exciting. This is a bad week, because Thursday is Thanksgiving, which means that on Wednesday activity does drop off early, the Thursday there is no market and then Friday the Stock Market in NY has an early close. That basically means two and half days of trading.
On the other hand, holidays like Thanksgiving have turned out to be positive for markets, turning ugly at the end of the month when fund managers take their gains and losses for the year (to offset them for tax reasons). So, it is not necessarily bad, but I don’t have the overwhelming optimism of a few weeks ago, mainly because of the calendar.
Below is the chart for the S&P 500, as you can see (If you double click on the chart you will see it bigger!) the correction is over, the candle last Friday seem to be above the last resistance set by two candles. Moreover, the Trix is turning up. Only the Parabolic SAR has yet to give the signal, but a strong opening on Monday would make it give a signal. Since Ireland has asked the EU for aid, we may get exactly that tomorrow. Based on this chart, next stop to watch would be the 1,230 level where there should be some resistance.
The Nasdaq looks almost identiacl, except that Friday’s candle did not penetrate the resistance . But everything looks like it is ready to go up, if it does, worry when the level gets to 2,580
My favorite company (not stock!) $AAPL looks very much like the indices, TRIX turning up, candle at resistance. So, tomorrow is very, very important in terms of getting very bullish despite the shortened week.
Where things get interesting is when we look at “Cloud Stocks”. Cloud stocks are all of those companies that one way or the other contribute to people doing computing on “The Cloud”, meaning in servers elsewhere, rather than in your own facilities. This is a growing trend, simply because it tends to be cheaper. Cloud stocks got hit very hard on October 6th. when $EQIX lowered its guidance and promptly lost one third of its value.
But it became clear that the problems were $EQIX and not the rest of the Cloud stocks (Except for maybe CSCO). Case in point in point is Salesforce ($CRM), which sells Customer Relationship Management software, thus the symbol. The company blew past estimates on Friday and left this graph (Stock up $20!), which says, sell if you have it, but be ready to buy on any weakness or sell a put, as this baby is going up! But let it rest a little.
But there are others and they look good. Like $FFIV (F5 Networks) which did a $CRM like jump on Oct. 27th., barely corrected and seems ready to fly now. Resistance is at $124, if it breaks it it should move much higher.
And Citrix s=Systems $CTSX looks similar, also looking ready to break out. Citrix has become the software for remote access and seems to have an almost monopoly in that field. Note that in addition to the TRIX giving a buy, the Bollinger Bands have compressed and are ready to explode:
And then there is $NFLX, another cloud stock that is booming in the stock market and in real loife as the company uses 20% of the Internet traffic between 8 PM and 10 PM every night in the US. As with $CTXS, the bands are compressing:
Finally there is $VMW (Vmware), the virtualization company that has been on fire all year (up 200%!). It seems to be a little behind the other but in the same positive fashion.
Finally, a company I don’t like fundamentally, but speculators love is travel website Tazoo ($TZOO) which is showing this very nice chart, TRIX giving a buy, Parabolic SAR positive, bands expanding, if volume increases, it could go to heaven, but don’t fall in love with it, I think the business model stinks: