To no great surprise in these parts, yesterday’s action in the broader US stock indices was lackluster. Those traders that actually made an effort to lug themselves to the office likely squared a few more positions here and there ahead of the huge economic data and corporate earnings week ahead. In other words, a week that contains both an FOMC announcement (Wednesday) and non-farm payrolls number (Friday) is not something many traders feel comfortable coming into leaning too much in either direction. Release the kraken!
There is decidedly little to say about yesterday’s session, so let me once again point out the narrow trading range in which the S&P 500 has churned twelve or so days. On the upper end 1699/1700 is resistance, while support sits somewhere between 1670 – 1675. The average true range is still down at a measly eleven points, which is further supported with a sub fifteen reading in the VIX. Fear, or so it seems is also on vacation.
Further regarding yesterday’s price action, the bears will point to the transports (IYT) and the small caps (IWM) that led the downward press, while the bulls simply point to the fact that the market again held its immediate-term support. Me, I argue yesterday’s action simply doesn’t matter.
As discussing the broader US indices seems somewhat redundant today, at least until we get more economic and corporate date tomorrow and Wednesday, thus allow me to point out a few individual stocks that I am watching.
Monster Beverage Corporation (MNST) yesterday dropped close to 4.00%, all within the context of an up-sloping, narrowing trading range. The stock has immediate next support around $59.50 and a slip below there could get the bears salivating.
Coach, Inc. (COH), which has been on my radar all year, continues to trade within the context of a tight pattern that has the chance to break higher. The $60 area is first resistance, followed by $62.50, above which the air is clear. The culprit? The company is scheduled to announce its latest earnings today, which is to say that anything can happen after the report and I will have to evaluate a trade once the news has been digested.
Lastly, Starbucks Corporation (SBUX), after it’s post earnings up-gap looks well overextended and not something to chase higher. A break below $72 may be shortable for the quick and nifty trader, while a move toward the $70 – $71 looks to be a better long-side entry point again.