Base & Break - Celgene Corporation (Public, NASDAQ:CELG)

CELG from my usual suspects list, setup a clean B&B entry on break of ORH and whole $ level. Took a partial as price approached $44.00. Added back on break of bull flag, but the momentum died and the rest of the trade was like watching paint dry.

Technical Picture - Retest of January Highs

We've come full circle and retested the January highs as well as the May-Sept. trendline. Now what? Well, after reviewing all of the charts below, a few themes are developing - negative divergence to higher prices; and, bearish candlestick patterns. Also notice that volatility increased today despite the big move higher. Financials failed to really participate in today's big move and volume was luke warm. The commodity led rally will end when the $USD reverses its downward trajectory. We got a first hint that the $USD may be bottoming as it carved out a hammer-like stick with long lower shadow in the support zone. Start scoping out some good reversal setups as this rally concludes in the very near-term.

Click on the charts below to enlarge and read my chart notes.

Focus List Trade - Amazon.com, Inc. (Public, NASDAQ:AMZN)

The markets gapped open this morning on impressive overseas gains and better than expected pre-market spending data. Everything was moving so fast, it was hard to get in. I took a low risk entry on AMZN using the 5 minute timeframe - NRIB at base of round $ level. I exited when it stalled just shy of the 100% FE of the PDL to the base.

AMZN consolidated and managed to rally well beyond the FE target, but it was exhausted and carved out a huge shooting star, setting up a late day short.

A reader asks - AMZN - coiling as MAs converge. What is the importance of MAs converge in general and in AMZN case?

When prices coil at an area of MA convergence, the BO can be extremely powerful as we see from the NKE chart below. Once price broke out of the base, the MAs start to separate like a bow tie.

AMZN looks good on the break of resistance at blue line $80.00 entry point. However, if we look at a wide range view of the daily (last chart), we see a lot of resistance at this level. Normally, the BO of the coiling/MA convergence zone is the best place to initiate a swing trade, but because this rally is long in the tooth, last night we said we don't recommend any new long swings at this time.

Technical Picture - Bulls Win the Week and the Month

Most of Friday's session was choppy in the wake of mixed economic data. However, a late day rally in the last half hour pushed the S&P to fresh highs for the week. The rally seemed contrived but I'm not going to fight the tape. That said, we need to focus on key levels going into next week - Most recent high 924; May high/ 200 DMA 929/930; January closing high 934; and finally, January high 943.

Normally, we see new institutional money being put to work in the first week of the new month, but this rally is three months old and testing significant resistance, so I would not be initiating any new long position trades at this late date.

Keep a close watch on economic data, especially employment data later in the week. Economic Calendar for June 1 - June 5th




$USD breaches minor support level as $CAD approaches resistance.



Focus List of Stocks:

CME - dragonfly doji after a big run up in price could signal bears are getting ready to take over.

FSLR could retest $200 this week.

ENER - solar laggard could be setting up to join the rally.

GIL - Bullish flag pattern

AMZN - coiling as MAs converge

AMGN attempting to save itself, but either way there's a trade setting up here.

WFC - may get one last pop before we retrace.

Technical Picture - More of the Same

Tomorrow's economic data includes GDP in pre-market, Chicago PMI at 9:45 and Michigan sentiment at 9:55. Any data which surprises versus consensus estimates can move the markets. NASDAQ testing resistance.

Gap Fade - SPY

The SPY setup a perfect gap fade shortly after the open, when prices tested resistance and formed a descending triangle on the 1 minute. The red line segments are how I managed my stop. After the double bottom, I exit half and was stopped on balance minutes later. I was hoping the PDL would hold as resistance but the bulls wouldn't have it.


A choppy session with a midday price/volume spike noted on auction results. The auction stuff is over my head so I stayed away and took the rest of the afternoon off.

Technical Picture - Bears Step Up on Lack of Follow Through

Early NASDAQ follow through strength after yesterday's broad based advance , was unconfirmed on the broader market. The bears took control of S&P morning chop eventually prompting an afternoon decline on accelerating volume. Notice the divergence between tech and SPX.

Still the markets are in a tight, low volume consolidation. Until either support/resistance gives way, trading is tricky.