Buying and Trading Levels for Amazon $AMZN

Amazon.com (AMZN) developed a Gap and Consolidate…then Rally Pattern through 2015 as drawn.
After an initial earnings gap, shares consolidate and support on rising moving averages.
The next swing or pathway has been an upward rally into the future.
We’re balancing the odds of this pattern repeating a third time on the July gap and consolidation.
If so, notice the support reversal candle off the $520.00 per share level at the rising 20-day EMA.
We’ll be bullish above the $520 pivot and breakout trigger bullish above $540.
A bearish sell pathway develops under the 20-day EMA near $520.  (more)

It’s Almost Time To Buy Crude Oil Again

It’s been a while since I’ve written about Crude Oil here on the blog. It’s a topic that has been coming up more often recently as prices are hitting levels not seen in over 6 years. Just because something is in the news a lot doesn’t mean it is a market that is worth our participation. In fact, more often than not, if it’s all over the news, you probably either missed it, or you’re too early. We have preferred to stay away from Crude Oil since it broke the uptrend line from the March lows. This occurred in mid-May after a 30% rally in Crude Oil that was sparked from the failed breakdown and bullish momentum divergence that we were pointing to in March. This worked out well the first time around and now I believe we are about to see something similar.  (more)

Keep Your Eye on Junk Bonds: They’re Starting to Behave Like ‘08

According to data from Bloomberg, corporations have issued a stunning $9.3 trillion in bonds since the beginning of 2009. The major beneficiary of this debt binge has been the stock market rather than investment in modernizing the plant, equipment or new hires to make the company more competitive for the future. Bond proceeds frequently ended up buying back shares or boosting dividends, thus elevating the stock market on the back of heavier debt levels on corporate balance sheets.

Now, with commodity prices resuming their plunge and currency wars spreading, concerns of financial contagion are back in the markets and spreads on corporate bonds versus safer, more liquid instruments like U.S. Treasury notes, are widening in a fashion similar to the warning signs heading into the 2008 crash. The $2.2 trillion junk bond market (high-yield) as well as the investment grade market have seen spreads widen as outflows from Exchange Traded Funds (ETFs) and bond funds pick up steam.  (more)

SolarCity Corporation (NasdaqGS: SCTY)

SolarCity Corporation designs, manufactures, installs, maintains, monitors, leases, and sells solar energy systems to residential, commercial, government, and other customers in the United States. It offers solar energy systems; solar lease and power purchase agreement finance products; mounting hardware for photovoltaic panels; and related software, as well as develops a proprietary battery management system, which is designed to enable remote, bidirectional control of distributed energy storage that can provide benefits to customers, utilities, and grid operators. The company also sells electricity generated by solar energy systems to customers.

Take a look at the 1-year chart of SolarCity (NASDAQ: SCTY) with the added notations:

SCTY has been trending sideways since the fall of last year. Along the way, the stock has repeatedly found support around $46 (green). Now that the stock appears to be falling back down to that support level again, traders might be able to expect some sort of bounce. However, if the $46 support level breaks, lower prices should follow.

The Tale of the Tape: SCTY has an important level of support at $46. Traders could enter a long position at $46 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.

Crude Oil $USO Is Ready for a Quick Bounce

We have a classic contrarian setup in oil right now...

 

The price of oil has fallen 28% in just the past six weeks and is testing the $42-per-barrel low it hit back in March. Lots of analysts are looking for oil to fall even further over the next few months. And many of the financial television talking heads are looking for the price to dip into the $30s.

 

Oil has fallen so far, so fast... hardly anyone has anything bullish to say about it. Virtually everyone is rushing over to the "short" side of the boat.

 

But in the short term, I'm looking for a bounce. Here's why...(more)

CIGNA Corporation (NYSE: CI)

Cigna Corporation, a health services organization, provides insurance and related products and services in the United States and internationally. The company’s Commercial segment offers insured and self-insured customers medical, dental, behavioral health, and vision, as well as prescription drug benefit plans, health advocacy programs, and other products and services. Its Government segment offers Medicare Advantage plans to seniors in 16 states and the District of Columbia, Medicare Part D plans in 50 states and the District of Columbia, and Medicaid plans. The company’s Group Disability and Life segment provides group long-term and short-term disability insurance, group life insurance, and accident and specialty insurance. Its Global Supplemental Benefits segment offers supplemental health, life, and accident insurance products, as well as individual Medicare supplement plans that provide retirees with federally standardized Medigap-style plans. The company’s Run-off Reinsurance segment reinsures guaranteed minimum death benefits and guaranteed minimum income benefits plans. Its Other Operations segment provides corporate-owned life insurance that are permanent insurance contracts sold to corporations to offer life coverage; and operates the run-off settlement annuity business.

Take a look at the 1-year chart of Cigna (NYSE: CI) below with my added notations:

Over the past year CI has been trending consistently higher, while also forming a nice trend line of support (blue). Always remember that any (2) points can start a trend line, but it's the 3rd test and beyond that confirm its relevance. As you can see, the market deems this trendline to be very important. A pullback to that line will provide trading opportunities, one way or another.

The Tale of the Tape: CI has a trend line support to monitor. A long position could be entered on a pullback to the trendline, with a stop placed below the level of entry. A short position could be entered if CI were to break below its trendline.

Homebuilding Stocks Hitting New Highs, $DHI Leads

The stock market looks ahead and based on the latest breakout in homebuilding stocks (hitting new highs) ($DJUSHB), apparently traders like what they see on the horizon.  The 10 year treasury yield ($TNX) held key support and is bouncing.  Proceeds from the sale of treasuries seems to be finding a "home" in the DJUSHB.

 We spent more than a year consolidating in a bullish ascending triangle pattern, then broke out with a measurement to 710.

 Today's breakout above 600 will likely provide the impetus for another leg higher in the DJUSHB.  Also reflected on the chart below is bounce off support in the TNX and the recent breakout in DR Horton (DHI).  DHI recently reported better than expected revenue and earnings and action the past two days certainly improves its technical standing as well.