No. 1 With a Bullet

Commuters make their way along the westbound 91 freeway as the Canyon fire burns in Corona Tuesday, September 26, 2017. FRANK BELLINO, THE PRESS-ENTERPRISE/SCNG

Commuters make their way along the westbound 91 freeway as the Canyon fire burns in Corona Tuesday, September 26, 2017. FRANK BELLINO, THE PRESS-ENTERPRISE/SCNG

The lede:  It probably doesn’t surprise many Southern Californians that we endure the most stressful commutes among 27 U.S. markets studied, according to a Half survey of commuters. And that’s from the region with just the eighth-longest average trip — 53.7 minutes — in the nation.

“Probably not the list you want to be No. 1 on,” said Brett Good, Half’s senior district president for Southern California and Arizona.

This isn’t simply about congestion between home and work. The study suggests extensive mass transit options in a region can lower the anxiety created by this travel.

“When you’re doing all the work, it only adds to the stress of commuting,” Good says of those driving to their job.

Read the whole thing:  www.ocregister.com

Streaking

The S&P 500 Index broke another record today.  It has now gone over 85 days without a 0.5% correction breaking the record set back in 1968.

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Steady.  Higher.  Quiet.

Hat tip Ryan Detrick

Counting on Kulicke & Soffa

klic

Kulicke & Soffa closed yesterday at its best level since the summer of 2000.

KLIC mounted a powerful breakout yesterday.  The stock finished with an impressive 3.7% gain on double average volume.  This big surge drove shares above a major supply zone that has capped the upper band of the stock’s seven month range.  An extension of this breakout could carry the stock quite a bit higher.  As this plays out KLIC is a low risk buy on weakness.  A dip back down to the $23.10 to $22.50 area would retest what should soon develop as a major support zone.  On the downside, a close back below $22.00 would violate the November low and would drop shares back into rangebound mode. 

At time of publication we have a position in KLIC.

Schlumberger Trade Update

slb

SLB put in its best performance of the year yesterday.  Shares surged over 5% on very heavy trade as the powerful rebound off major support near $62.00 gained steam.  We now consider SLB a low risk buy on weakness.  Nearby support is in place between $66.30(50 day moving average)and last week’s high just below $65.00.  On the downside a close back below $62.90 would violate the November low sending a clear warning sign that Monday’s upside momentum has been wiped out.  Initial upside target is the September high($70.00).  

At time of publication we are long SLB in some managed accounts.

TNX (Weekly)

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Polaris Play

pii

Shares of recreational vehicle maker Polaris have struggled since its powerful earnings inspired breakout back on October 24th.  The October 24th peak now looks fairly ominous.  We expect a deeper post earnings pullback ahead.  A continued drift lower on light volume will create a very low risk entry opportunity.  The major support zone we are focusing on rests between $109.00 and $107.00.  Within this $2.00 range is PII’s September high as well as the huge breakout gap left behind after the Oct. 24 open.  Just below is the upward sloping 50 day moving average.  We consider PII a buy here.

At time of publication we did not have a position in PII.

Post Election Performance

election day

Qorvo Regains Its Footing

qrvo

Ahead of last Wednesday’s second quarter earnings report shares of QRVO mounted an impressive breakout.  The stock has struggled since but is beginning to perk up again today.  QRVO is a top five S&P 500 gainer with the help of a 5.7% gain on heavy trade.  This impressive move has left behind layers of support and has set the stock up well for a move past the 2017 peak.  A solid support zone is now in place between $77.00 and $75.00.  This key area includes the October high as well as the September peak near the upper band.  On the downside a close back below $74.00 would indicate more sideways action is ahead before a new rally leg takes hold.  A key hurdle in the near term is the May/June highs near $79.30.  Once past QRVO has room to run. 

Also of note, QRVO sports a high short interest ratio(9.3).  As shares move into new 52 week high territory this will add considerable fuel.

No positions.

 

PFE

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IBM’s Post Earnings Pullback Spells Opportunity

ibm

Back on Oct. 18th shares of IBM exploded to the upside on its heaviest volume in over ten years.  This powerful earnings inspired surge drove the stock nearly 9% higher, the biggest one day gain for Big Blue since February of 2016(+5.04%).  For IBM bulls this was quite a change of pace.  Following the prior two earnings reports(April 19/July 19)the stock turned sharply lower.

IBM extended the gains through the end of the week but was unable to move past an extremely heavy area of supply.  This key zone included a damaging May 5th breakdown gap as well as the 200 day and 40 week moving averages.  As the week of October 23rd began it was clear IBM had run out of its post earnings momentum and was headed for a pullback. 

The pullback phase became quite deep as November began.  At Friday’s close the stock had already given back over 75% of its earnings breakout.  As this week begins the stock is still fading as downside volume continues to contract.  We expect IBM to drift even lower in the near term as it retraces the entire post earnings rally.  Patient IBM investors should keep a close eye on the $149.00 to $147.00 area as this plays out.  This major support zone includes the initial October high near the upper band and the huge October breakout gap at the lower band.  If Big Blue can regain its footing here a solid base will have formed.  On the downside a close back below $145.00 would violate the October low indicating a retest of the 52 week lows may be ahead.

Also of note, IBM sports a fairly high short interest ratio(5.4).  As shares begin to rebound this will add considerable upside fuel.

At time of publication we do not have a position in IBM.

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