Big Cap Suggestions for a Rally That Might Not Be Done Yet (PCLN, BIDU, GG, CRM, BLK, AAPL)

Priceline (PCLN)

This stock bounced off its 50 MA and exploded to 52 week highs last week on earnings. It was buyable on the gap up. If you missed that a excellent entry point in a stock that gaps explosively and is likely to continue will often come on an undercut of a prior low in the pattern. Usually that comes when price dips into the gap. Eager buyers will often provide “gap support.” PCLN is sufficiently strong that it has not yet tested the gap. But it did undercut Wednesday’s low on Friday. The stock climbed nicely from this “failure.” It’s a buy here with a stop under Friday’s low. Should it stop out we’d look at reentry on gap support.

Baidu (BIDU)

BIDU broke down hard on earnings. Usually this kind of high volume break down signals the end of a stock’s run. Shorting the bounce back can be quite profitable. Except BIDU has had two legs up off its bottom, has flirted with new all time highs, refused to sell off, and is basing near new highs. This is a sign of price wanting higher. The stock is offering valid entry on this bounce off the 50 MA. We’d be buyers of a move to new highs, or immediately with a tight stop.

Goldcorp (GG)

This stock has formed an improper base. The mid-point of the W is higher than the left side of the base, invalidating a double bottom pattern. The move off the top of the W went too deep to be considered a 50 MA rebound play. It was V shaped, which usually augurs price failure. But unless gold corrects, and it hasn’t done so materially even when the dollar has bounced, we like entry here not far off minor support around $43.50. We’d have little patience if price does not respect minor support or gold itself sees some profit taking.

Salesforce.com (CRM)

This is a 50 MA rebound play and price moved to new highs on excellent volume on Friday ahead of earnings this coming Tuesday evening, November 17^th. This is a buy as it stands. We would only be willing to hold through earnings should we have a sufficient cushion in the stock. Otherwise our stop would be a move back into the consolidation.

Blackrock (BLK)

This stock is a rather thin trader for a $12B company, but it has a 50 day average of $73MM moving through the stock, which is sufficiently liquid for us. The company will begin to see a sharp acceleration in earnings next quarter and it should last for several quarters, with 51% EPS growth projected for next year. Of course price has nearly trebled off the February bottom so this is well priced in, but the promise of these earnings is driving the trend.

We have here yet another 50 MA rebound play. This one is more risky than the others because of the multiple touches of the line throughout the uptrend without forming a proper base. But we are using tight stops here. Early entry could be taken on a volume break above the trend line formed by trading over the last week. We’d use $230 as our stop.

Apple (AAPL)

This is the first time AAPL has come near its 50 MA since its last base in July. Price pierced the roughly equivalent 10 MA weekly, which is sufficient for us to consider this a 50 MA rebound play.

The volume profile in this stock is just horrid, featuring above average volume on the decline and disinterested volume on the rebound. Often times a pattern like this will reverse hard when retesting the old highs and that could well happen here. But unless the market breaks down we don’t think it will. We have mentioned innumerable times that AAPL is the most liquid leader of the bull market and we expect it to be among the last generals standing.

You can enter here with a tight stop or buy a move to new highs on volume.