"Dow 12K!!" has finally been eclipsed. This is good, because one annoying trend may finally be put to rest (fingers crossed). More importantly and away from the boob tube, all of the major indices have notched incredible price and time runs that are stretched into overbought territory on both a short and longer-term basis. More than thirteen weeks off the July lows and most indices sporting gains of 10% or more means that a price consolidation at a minimum is in order.

While the broader indices are being emphasized as fragile at this point in time, the question or observation might still be raised as to whether any individual stocks deserve traders' bullish focus. The answer to that could very well be yes. If the technicals at hand are qualified according to ones own rules of engagement and those triggers are still working successfully on a whole, then it is felt that a couple of positions might be considered. However, the observation from this corner is that spreading and protective strategies should be emphasized whenever possible.

In the following, I'd like to present a few stocks that might be able to handle the bull in a bovine and kind manner. These issues have been selected based on existing weekly chart Elliott Wave 4 EBOT triggers in place, decent fundamentals representative of growth and price consolidations on the daily which emphasize handling the current market truth in a manner possibly worthy of our attention.    

Figure 1: Google (GOOG) Weekly  

Is it as ‘goog' as it gets? Admittedly, I was bucking the weekly Elliott a couple months back when observations regarding bearish Condors or Butterflies were entertained as being compelling in Google (GOOG). With a break of angular supports, a bearish flag and daily chart MA confirmation, those strategies looked suitable for a stock with a hefty price tag, liquid options and known for volatile movement. The bulls ‘somewhat' won that battle. Realistically though, premium collection strategies rather than the directional or long non directional variety have brought home the bacon to date.

Currently, the bullish delta looks technically appealing based on the fore mentioned Wave & Handle criteria expounded upon earlier. However, don't expect any classic daily chart triggers from Google, as the internet behemoth reports after the close. And if history is any indication, an overnight price gap of some magnitude is likely. Earlier this week at Investors.com some analysis regarding a leg and another leg into a front month Condor was offered. While those ambitions have yet to be executed upon as option prices are still slightly out of reach…. maybe today. If not, I'll gladly watch from the sidelines, and that's ‘as goog as it gets' sometimes.


Figure 2: Cerner (CERN) Daily

Cerner (CERN) is probably a less familiar name to many traders. The company is involved in the healthcare information services business. It's also a former IBD100 name. CERN looks to have been dropped for prior technical crimes against humanity, as it still maintains an EPS Rating of 89 and ranks #2 out of 30 stocks in that market niche.  

Technically, Cerner could be lining up for a ‘third time's the charm' move through handle or lateral resistance on the daily. The stock also maintains a daily Elliott Wave 4 to confirm the larger weekly. Personally, the observation is that the most recent action which finds support from a higher-low Hammer and the Bollinger / 50-Day EMA combo is a stronger area to locate any limited-risk strategies that might appeal to traders.

Figure 3: Herbalife (HLF) Weekly

The chart above of nutritional supplement / weight-loss provider Herbalife (HLF) shows the classic construction of a first level Cup-with-Handle base. The stock sports an EPS Rank of 81 and Relative Strength of 76. The subgroup, Cosmetics / Personal Care maintains a 91 Technical Rating, which for many intermediate-term traders may be an extra point of confirmation. Fellow group member NutriSystem (NTRI) maintains slightly all-around stronger numbers and is in similar position technically. So, for those interested in the ingredients offered from Herbalife that stock may also be an appropriate one to look into for limited-risk positions. 

Figure 4: NYSE Group (NYX) Weekly

No other space of the market has more wheeling and dealing going on than the area involving financial exchanges. Personally, I can't keep track of who is courting whom and that's something traders will need to investigate on their own. Technically, NYSE Group (NYX) is the latest in the group to sport a weekly handle. With many of these patterns showing nice gains of late (BOT, ICE, ISE) and the weekly support via Elliott confirming that daily formation, some solid evidence looks to be in place. The observation from this corner though, is that ‘early' support-style entries in conjunction with limited risk directional positions are the most suitable for the hedge hogs still looking to pursue the bovine and kind delta.  


Chris Tyler
Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
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The information offered here is based upon Christopher Tyler's observations and strictly intended for educational purposes only, the use of which is the responsibility of the individual.