Thursday evening SPY

SPY daily

Might as well do another look at SPY since I called today's ramp job so well (NOT !)

The breakout area at 142 should now provide minor support if it pulls back.

There's a bunch of potential sellers up in the gray box beginning near 143. And the 50dma is looming overhead at 143.70.  The expectation is that it will probably not move up easily.

Some things which concern me about today's action:

1)  The squeeze was basically over at 11 a.m.  After that, sellers were content to feed out stock.

2)  AAPL was unable to get going.

3)  The Euro was weak all day.

Thursday Afternoon - How about some FOSL?

Daily Chart of FOSL (11:05AM)

I would never pay what they ask for anything but the stock is catching a lot of interest today.  By 11:00AM it had already traded more than the 10 day average number of shares and it is pushing on a quintuple top.  (You can only see 4 but there is another in May.)  If it breaks 93.69 that puts it into a big gap that extends up to 125.20.  That would be a nice ride.  With the 50 day now just above 87 this looks like a decent place to take a small starter position with the plan to add quickly if the stock moves into the gap.

No position yet.

Thursday Morning IBM

Gator's Chart of the Day: IBM

Tech has not been a bastion of strength lately and networkers have been a disaster.  (See FFIV, RVBD, LVLT, LLNW, etc.)  IBM is showing a bit of life.  Note that it has managed 3 green candles on increasing volume.  The news is positive as well as the board of directors approved a $5B buy back and they still have $6.7B left to purchase from the previous authorization.  That's more than 5% of the outstanding shares at Wednesday's closing price.  Analysts have a target price of 220.55 and the company has already reported earnings.

The Trade
With a little luck and patience an entry around 192 should be possible but even a little higher would be OK.  (I would be reluctant to pay 195.)   The stop would be a little under 190 (say 189.35ish) so the risk is about 2%.  The upside targets are 200 (add around 201) and then a continued push through the 20/50 day moving average confluence (final add) with the upper Bollinger band as the area to lighten up.  That should be around 212 which would be about 10% upside.  That gives an attractive risk:reward of 2:10 or 1:5.

Note: All statistics are from Finviz