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Minyanville's T3 Morning Market Call: Stocks Start February With a Bang


US stock futures point to a higher open to kick off February, rebounding from yesterday's lackluster intraday action.

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US stock futures point to a higher open to kick off February, rebounding from yesterday's lackluster intraday action. We have seen two gap ups sold aggressively over the last two weeks, and today traders will be watching to see if the market can hold these overnight gains. Strong manufacturing surveys out of China and Europe are providing the catalyst for today's strength. More data is on tap in the US today coinciding with the beginning of a new month. Stocks also seem to like Mitt Romney's big win in Florida that should put him on the inside track for the GOP presidential nomination.

Technically, the market is doing nice work over the 1300 level in the S&Ps. Bears had a few opportunities to "break the momentum back" of the bulls and had no juice to do so. We've now built some nice upper support to trade against and it appears we will be testing the January highs soon. Europe continues to muddle through, which is all we need from that area of the world.

Resistance stands at yesterday's high of 1321, then you have 1328 with the 1/26 high of 1333. A daily close above 1333 opens the door for 1347-1356. Support continues at 1303-1308 with a mini spot we touched Monday at 1300.

Tech continues to be mixed with nice macro holds and cash flow trades.

Apple (AAPL) continues to power ahead. You can hold some and trade around some, but ultimately this stock is acting well.

Google (GOOG) is still in the penalty box, but you can own it versus the $564 low. One day it should try and test the earnings gap of $590-591.

Baidu (BIDU) was acting okay until it postponed its earnings. I would avoid it.

Sina (SINA) is acting better and has a nice bull flag with a momentum buy through $71.40.

Netflix (NFLX) has been a great vehicle for 2012. A nice long swing entry from $75-77 into a nice two-day short "Red Dog Reversal" from $124ish down to $118. Now it needs some time.

Microsoft (MSFT) continues to hold higher and is in the game this year through $29.70 on its way to $30+.

Qualcomm (QCOM) is near highs and under multi-month accumulation. It has earnings after the close. I am long some calls. If they deliver it should be a nice trade but we had a similar set up with Sandisk (SNDK) that didn't deliver.

VMware (VMW) has been flagging since earnings. It's holding its gap well; it can get some upside momentum for a trade above $92.50-93. (CRM) is still controlled by a downtrend and a lofty valuation, but seems ready for a trade above $118-120.

F5 Networks (FFIV) is a bit sloppy but still holds a majority of earnings gap and could go again.

Broadcom (BRCM) had a nice report and could continue. (AMZN) missed on revenues in its earnings report and is down about 17 points. The $170-$173 area is some decent support to watch for a trade. I probably will avoid. Investors are tired of waiting, with such a high valuation the company needs to start delivering.

Groupon (GRPN) looks to be perking up. Above $20.50-21 and it can have room to $25.


Nike (NKE) still acts well. Strong brands outperform in difficult economic times.

Wal-Mart (WMT), my retail stock of 2012, looks to keep going.

Lululemon (LULU) hangs tough and could be an add above $64.50.

Casinos: Macau's numbers are out and look good.

Las Vegas Sands (LVS) has earnings after the close. The stock is still looking to break a multi-month channel. Resistance is $50-$50.70. I will likely take some options into the report. At some point this stock should break out, just not sure if it will be this quarter or next.

Wynn Resorts (WYNN) is still above $112-$114 but sluggish.

MGM Resorts (MGM) still hangs around and can continue to muddle higher.

Banks showed some strength yesterday.

Goldman Sachs (GS) is still holding higher and working its way to $115-117.

Morgan Stanley (MS) is acting well. Over $18.90 and it can continue to $20+.

Citigroup (C) was upgraded again. It has a nice flag pattern, holding above $31 opens the door to $33-34.

Oil Service ETF (OIH) had a nice slow methodical move. I'm still long for about 5-6 weeks now. I think next big level is $130-133.

Molycorp (MCP) acts okay. Yesterday was a bit disappointing but it is still working higher.

Rare Element Resources (REE) acts great. Big volume and seems like it wants double digits soon.

Gold ETF (GLD) is impressive. No real pull-in since we talked about the ignition at $163.50-$164.50, which was when it broke downtrend. Now next resistance is at $175.

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Scott Redler is long SPY, OIH, WMT, LULU, AAPL, MCP, REE, QCOM calls, DNDN calls, VXX. Short DIA.
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