Traders should note that Standard and Poor’s is expected to announce a new method of calculating PE’s tomorrow. Under the new format employee stock options will be treated as a period expense. The resulting impact would be to raise the average PE on the S&P 500 from 22 to 30. Watch the monkey’s spin this news.
On the economic front tomorrow is the release of April Retail Sales which are expected to show an increase of 0.6%. Don’t be surprised to see this number come in under expectations. A number that meets or beats expectations should be bought for a continuation of the rally. In fact, a positive number and we could see a very nice pop on the Dow. WMT reports earnings in the morning as well.
The Biotech sector came back strongly today and as we mentioned last week is an area of the market traders should be brushed up on. Keep a very close eye on this sector as there may be some very nice trades here. The BTK has some strong support in the 375+ area. If reality eludes the market again tomorrow traders should look for continue gains in this area as it is way overdue for a large technical bounce. Stocks we are looking at in this sector include MLNM, SEPR, and INCY.
MLNM looks ripe for a pop here if buying continues in the market. 1st target on MLNM would be the 20-day EMA at $18.73.
MLNM chart to consider:
stockcharts.com[h,a]daclyiay[pc20!b200!f][vc60][iUb14!La12,26,9]&pref=G
SEPR is another biotech that has been beaten down in the last few weeks and is trading slightly above its cash level. A bounce to $13+ isn’t much to ask for now is it?
SEPR chart to consider:
stockcharts.com[h,a]daclyiay[pc20!b200!f][vc60][iUb14!La12,26,9]&pref=G
INCY looks very interesting here, trading slightly above its cash value. INCY’s 20-day EMA is at $8.49. It has been a few weeks since INCY visited its 20-day EMA. A look at INCY’s chart shows that once a month the stock touches its 20-day EMA. We believe INCY is signaling a move to the upside.
INCY chart to consider:
stockcharts.com[h,a]daclyiay[pc20!b200!f][vc60][iUb14!La12,26,9]&pref=G
EBAY is at the top of its descending triangle. Traders short the issue should consider stops at $55. EBAY’s max pain is, surprise, surprise - $55!
EBAY chart to consider:
stockcharts.com[h,a]daclyiay[pc20!b200!f][vc60][iUb14!La12,26,9]&pref=G
from: buysellshort.com |
