The S&P 500 joined the Russell 2000 today and paused to consolidate recent gains giving back roughly -0.4% for the day. The Nasdaq Composite maintained its strength during the regular trading hours and ended the day mostly flat.
However, the after-hours session brought several poorly received earnings reports, most notably from Apple (AAPL) and Microsoft (MSFT). Tomorrow could, therefore, turn into a test of market strength to see if the bulls will be able to quickly price in these reports and find a way to maintain the current market uptrend. This will also test the patience of traders (and investors) and require discipline when reviewing select trading ideas and setups.
That said, the following trading ideas outline five stocks and setups that I will be watching tomorrow.
Allergan (AGN) – Allergan continues to flag near the top of a four month base, and needs to break out over the 320 level with conviction to push higher.
Illinois Tool Works (ITW) – This setup is a prospective short setup. ITW broke down through the 200 day moving average level and recent consolidation; it now looks like a bearish flag. If the stock cannot reclaim the 93-94 level quickly it becomes more likely to pullback to 87-88.
Jazz Pharmaceuticals (JAZZ) – This stock continues a constructive consolidation in the 180-185 area. A strong move in JAZZ through 185 could lead to a continuation move through 190 and a breakout to new highs.
Mallinckrodt (MNK) – There’s been a constructive five months long consolidation. And today brought a constructive bounce off the 20 day moving average with a close above the 50 day moving average. I’m expecting continuation toward 128-130.
20+ Year Treasury Bond ETF (TLT) – The TLT appears to have put in a short, but well developed rounded bottom over the last couple of months. The TLT reclaimed and closed above its 50 day moving average today and could be setting up for continuation toward 122-123.
Thanks for reading and have a great week.
Twitter: Â @NoanetTrader
No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
