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Minyanville's T3 Morning Market Call: In a Market That's Hard to Chase, Look at the Value Menu


Here, a look at a few value names that aren't always on short-term traders' radars, but have bullish patterns nonetheless.

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Futures are near the flat line this morning as Cyprus gets set to re-open its banks. There are anecdotes of long-lines at Cypriot banks as many customers look to withdraw money after seeing the bailout agreement contain a tax on deposits. There are worries that the Cyprus bailout creates a dangerous precedent for future bailouts and could trigger bank runs in the future. Right now, though, US markets do not seem to care much about Europe, as yesterday we also shrugged off a weak Italian debt auction and traded back to near the flat line during the session.

See also: Cyprus: An Inconvenient Truth (or, How Not to Manage a Debt Crisis and The Lead-Lag Report: Correction Case Returns (Thanks, Cyprus).

Resilient remains the key word for this market. We have noted faulty signals at various times over the last couple of weeks, but each time the market seems on the verge of a deeper correction it finds support and rallies back to high. Never fight the tape, but I also think adding on new swing positions at these levels into the end of the quarter is not the correct approach. Watch the all-time high in the S&P (INDEXSP:.INX) as the pivot resistance for this market. A break above that could bring some momentum into the market.

The action remains very stock specific during this holiday shortened week, the last trading week of the first quarter. Among economic events to watch today, we have GDP and jobless claims.

Today my firm is taking a look at a few value names that aren't always on short-term traders' radars, but have bullish patterns nonetheless. Perhaps if you are reticent to put money to work in high-beta names with indices at all-time highs, these are some of the names you could turn to.

The discount retailers in particular have some nice patterns, with these stocks looking to break macro pivot resistance points.

Wal-Mart (NYSE:WMT) saw a nice two-day breakout and is holding well above key moving averages. WMT is building an upper level base above prior breakout level of $74.10 and looks poised for another potential move higher.

Costco (NASDAQ:COST) is acting very well as the uptrend since November has acted as support every time its been touched. Look for potential continuation above $106.77.

Target (NYSE:TGT) is stair-stepping higher above its 8-day moving average. The chart looks good on a macro time frame as well as short-term time frame. The pullback during the second half of the trading session yesterday could open the door for better buying opportunities. As long as it stays above $68, we could see higher prices moving forward

Even more value oriented stocks are forming nice upper level patterns that could give way to more upside. Even if you don't get the explosive price appreciation, you have a healthy dividend to keep you comfortable.

McDonald's (NYSE:MCD) is building a nice base at $98, a strong support level from the March 8 gap. The longer it holds above this gap, the higher the possibility we could see a breakout move above current resistance of $99.70.

PepsiCo (NYSE:PEP) has been flagging nicely above its 8-day moving average after igniting on March 22. Last time it put in a bullish flag pattern in February, we got some nice upside follow-through. Around $78.75 marks the next breakout of its current wedging/flagging pattern.

Procter & Gamble (NYSE:PG) has has been consolidating in an upper-level range for more than a month now. It looks poised for a potential breakout above $77.50. If you are looking to build a value portfolio, this name is a great place to start.
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