Markets are in a bit of a slump recently, unsure of where to go next. That's also reflecting in a lot of my "go-to" stocks that I trade fairly often.
However, there's a lot of important stuff that's ahead. The potential for increased volatility in the coming weeks has traders buying up VIX calls. The Scottish Secession election, the next big Fed policy meeting, Alibaba IPO, and what the ECB and BoJ (Bank of Japan) are doing will affect the markets in the coming weeks into October.
That said, there are a few stocks coming up on the radar: HD, MSFT, Z, GILD, GS, and XOM.
Home Depot (HD)
HD had a massive gap up after earnings, fueled by optimistic guidance. It has since sold off a bit, back to the gap up levels, and is finding support around 89 bucks. I missed the overbought and short opportunity, but what happens next week I think will largely determine the next move. Short term indicators are reading oversold, but long term ones remain ambiguous. We may see a bounce here, but if that support level breaks, 86 is next followed by a gap fill to 84. A bounce means a test of the highs at 93 are next. Given the aforementioned events happening next week, I see the odds as going lower rather than higher.
Microsoft (MSFT)
While yesterday would have been better timing, MSFT is reading as overbought on all indicators and is bumping the top Bollinger Band. This one will be a decent short opportunity if we get a move back up above that BB, with a likely decline back to the 20ma (the dotted green line).
Zillow (Z)
Z was another short opportunity missed. When a stock is in a strong uptrend, the 50ma provides support of that trend. Once broken significantly, the stock trades down. Z has support levels around 125, and is reading as oversold on short term indicators while approaching oversold on long term indicators. It is also hitting the bottom BB. There is significant upside here, so it needs to confirm support at 125 before I would consider getting behind some calls (or selling puts).
Gilead (GILD)
GILD has been in a very strong uptrend for two years, but has recently been running into trouble. While I called the overbuying and profited very handsomely from that, it's time to look at the long side. No indicators are pointing to overselling yet, and I don't know if they will. They don't get down there very often, people want this stock! Buying LEAP calls will be a good trade once this stock cools off a little bit, determined by whichever comes first: indicators turn red, or it finds some support and bounces. Either will be a good entry.
Goldman Sachs (GS)
GS is the lead underwriter of the upcoming Alibaba IPO. It's expected to be the biggest IPO in history (is that a signal of a market top? Time will tell!) and make many billions of dollars for GS. I believe that's already been priced in mostly, but that hasn't stopped rampant call buying for GS. This will be a prime short if it produces a blow-off top, as it is already reading as oversold on all indicators and is wanting to break through that top BB. Alibaba IPO is in the next week or two.
Exxon Mobil (XOM)
XOM has been getting beat up along with crude oil prices, as the two trade in tandem. Short term technicals indicate overselling, long term are approaching oversold territory. XOM is continuing to push below bottom BB. Support is at 95, if it drops to there and holds, I'd look to go long and ride it back to the 20ma.
