#$pccc

5 Trade ideas excerpted from the detailed analysis and plan for premium subscribers

BorgWarner, Ticker: $BWA

BorgWarner, $BWA, is a bottoming and reversal play. The stock fell from a consolidation in July and then based again for 5 months. It started 2016 with a second move lower to the current base. The RSI is turning up and the MACD crossed and is rising. With the tight Bollinger Bands® a move may be imminent. Look for a move over resistance to participate.

Mellanox Technologies, Ticker: $MLNX

Mellanox Technologies, $MLNX, pulled back from June through to a double bottom in September 2015. The bounce higher made for a lower high and it pulled back again, but to a higher low. Since that bottom in January the stock came near a retest of the October high and pulled back, but to a higher low this time. With that pullback the RSI held in the bullish zone and the MACD avoided a cross down, kissing the signal line and turning. The move Friday started the next leg higher.

MGIC Investment, Ticker: $MTG

MGIC Investment, $MTG, had a slow roll lower starting in July that accelerated lower into 2016. Since then it has been consolidating in a ascending triangle. The RSI is rising and near the mid line as the MACD moves higher. Look for a break of resistance to participate to the upside.

PC Connection, Ticker: $PCCC

PC Connection, $PCCC, moved lower through the back half of 2015 to a base around $20. The jump up in November and then consolidation teased of a move higher but failed, falling back to support to start 2016. The gap up in mid January retested the prior high and it is now consolidating. The RSI is in the bullish zone and turning up as the MACD rises, both supporting a push higher. Look for a break above resistance to participate in the upside.

Timken, Ticker: $TKR

Timken, $TKR, fell from a consolidation in March. It seemed to have found some support after making a low in September. But December started a new move lower to a 'V' bottom in January. For the last month it has been rising. Friday broke a bull flag to the upside to resistance. The RSI is bullish and rising while the MACD is rising. A push over resistance is a signal to participate to the upside.

After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday. Heading into the February Operations Expiration Week, the equity markets started with a weak move lower and then consolidation with a promise Friday.

Elsewhere Gold looks overdone to the upside and ready for a pullback while Crude Oil bounces in the downtrend. The US Dollar Index has short term strength in the downturn while US Treasuries may also be overdone to the upside and ready to pullback. The Shanghai Composite comes back after a week off looking to consolidate while Emerging Markets consolidate in their downtrend.

Volatility looks to remain elevated keeping the bias lower for the equity index ETF's SPY, IWM and QQQ. Their charts show possible reversals higher in the downtrend in the short run, but intermediate weakness remains. Use this information as you prepare for the coming week and trad'em well.

5 Trade ideas excerpted from the detailed analysis and plan for premium subscribers

CBOE, Ticker: $CBOE

CBOE, $CBOE, trended higher from May to the peak to start December at 72. Since then it fell hard, back to the resistance level preceding the August dip. The RSI hit the oversold level there and the price bounced Friday. The MACD continues lower though. Follow through Monday can be bought.

DineEquity, Ticker: $DIN

DineEquity, $DIN, started trending lower in early August and lost 25% before it bottomed in mid November. A bounce found resistance at the upper Bollinger Band® and it pulled back in a bull flag. The RSI is holding at the mid line while the MACD is flat but avoiding a cross. The movement Friday is pushing out of that flag and continuation can be bought.

Murphy USA, Ticker: $MUSA

Murphy USA, $MUSA, has been trending higher off of the bottom made with the market in August. The pullback in November reset the momentum indicators and it has risen again since. Last week it found resistance and consolidated. The small body candles with upper shadows suggest it may be topping. But the consolidation could break either way. Follow the break.

Palo Alto Networks, Ticker: $PANW

Palo Alto Networks, $PANW, pulled back in August with the market then bounced to a lower high in September. From there another pullback made for a higher low. A possible tightening consolidation. But a move to a higher high added more confusion. Friday's move lower suggests another leg to the downside. The RSI is falling, but it remains bullish, while the MACD is about to cross down. Follow through Monday would confirm lower.

PC Connection, Ticker: $PCCC

PC Connection, $PCCC, made a double top at 27 in June before starting lower. After losing almost 30% of its value it found support in September and consolidated for 2 months. November saw a spike higher to the 200 day SMA and then consolidation between that and the 100 day SMA. You can participate on a move over resistance.

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Contact me at [email protected] use the code SANTA in the message to get either an annual subscription for $556 (an additional 10% off the already 40% discounted rate compared to the monthly) or an annual subscription plus my book signed for $600. This will give you detailed plans for each trade idea.

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which, heading into Options Expiration Week, the last full week before Christmas and the FOMC meeting sees the equity markets looking weak in the short run and all but the QQQ tired or weak on the intermediate term.

Elsewhere look for Gold to consolidate in it downtrend while Crude Oil runs lower. The US Dollar Index is back into consolidation with a short term downward bias while US Treasuries are biased higher in consolidation. The Shanghai Composite looks better to the downside short term in its bounce and Emerging Markets flat out broken and falling, but oversold.

Volatility looks to remain elevated keeping the bias lower for the equity index ETF's SPY, IWM and QQQ. Their charts look weak in the short term as well. In the intermediate term the IWM is nearing key support, and the SPY testing a shift to a downside bias while the QQQ is still the strongest. Use this information as you prepare for the coming week and trad'em well.

The stock market continues to grind along at or near all-time highs.  The Nasdaq finally joins in.  This has been bringing all sorts of comparisons to the 2000 peak and crash in tech stocks.  Which companies were biggest then versus now.  How are PE ratios and earnings different.  Cool stuff.  Not that useful, but cool.

Everyone remembers the high flyers from then.  And those that crashed and burned as well.  Sock puppets and CMGI Field comes to mind.  But there are others that went public in that bubble and crashed and burned only to grind their way back.  One of those is a company called PC Connection.  PC Connection ($PCCC) was founded in 1982 with the birth of the personal computer but really ramped things up as they IPO'd in 1998.

The stock traded opened at 13.34 and moved to 70 at its peak before falling back quickly to abort 10 with pops to 17 and drops below 5.  2013 was a turning point though.  After a 12 year consolidation it started higher.  Breaking over 18.50 was the key.  That also happened to be a 23.6% retracement of the move lower.  It is rising now and testing milestones along the way.  In the short term chart below the recent price action shows a 3rd test of the 26 area.  A break above this would give a target of 30 on a Measured Move, and take it above the 38.2% retracement of the tech crash.  

This stock is far behind the Nasdaq.  What makes it interesting technically is that there is almost no price history between the current level and the 61.8% retracement at 44.48.  That would be a big move.

So Janet Yellen saved the day again simply by not changing anything. Don't you wish you could be a superhero that easily? Stocks continued higher following and all is right in the world until tomorrow.

If you came into this week like me, you had a lot of short ideas and a few long ideas that seemed like they were bucking the trend. Now is time to review those trend-buckers. One on my list was PC Connection, $PCCC.

The chart above shows that to start the week it was nearing resistance from a higher low. The series of higher lows is creating rising trend support as well. The momentum indicators were also bullish. The RSI was rising and the MACD crossed up and rising as well. It just needed to break resistance to trigger as a trade.

Well Janet helped that along. Wednesday it broke out to the upside. Next target is the 24.75 area where it can determine if it will continue higher or settle into a Handle to go along with the Cup. Either way this stock looks like one to connect with.

PC Connection, $PCCC, is a stock that has gone through long periods of consolidation before a big move.  The last 2 years of weekly price data in the chart below show the March to October 2013 consolidation before the move higher into year end, as an example.  The cycle before that was not quite as long but starts to show some similarities.  First the RSI dropped from a peak overbought condition each time but held in the bullish zone, over 40.  Next the Bollinger bands grew tighter as it prepared to move.  Third the price came in close proximity to the 50 week SMA.  All of those indications are in place now.  But the final one is not.  The MACD crossing

up was the signal to buy the stock.  The MACD right now is heading lower but very close to the signal line.  A jerk higher through it will give the signal.  At that point the triangle break would target a move to the prior high at 26 and there is a 3-box reversal Point and Figure chart Price Objective to 46.50.  With over 16% short interest that kind of a move could come quickly on short covering.  The company is likely to report earnings at the end of July or early August (was August 1st last year), just 4 bars away on the chart.  But it may not want to wait for that catalyst to move.  Keep an eye on it.