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Reopening Stocks Get Some Glances

Also, let's look at the transports and why they're quite moving.

The Market

Slowly, we are seeing folks talk more about the reopening stocks than about tech.

You might recall that’s how the shift from the reopening stocks-to-tech move happened in May. Now, I grant you, there was more hate for the tech stocks in May than there was for the reopening names recently, but the process is similar.

So, yes, eventually I will like those mega-cap tech stocks again. In the meantime, let’s go back to the transports. The reason is that so far there is not a ton of chatter on them. I expect if they are up on Thursday, that will change, but for now it’s been relatively quiet there. The most impressive thing in the transports today was that Southwest (LUV) - Get Free Report came out and essentially said it has seen bookings slow due to the delta variant. The stock opened down and closed higher on the day. I tend to like when that happens. But I think it was pretty obvious.

But it was also that FedEx (FDX) - Get Free Report and UPS (UPS) - Get Free Report finally stopped going down -- and no one has noticed. More on that below.

At the same time, breadth was vastly improved, enough that the McClellan Summation Index has its cushion moved up to negative 1,100 (advancers minus decliners), which is the largest reading (i.e. best) since late May.

The question of the day, though, is how to square the daily sentiment index for the volatility index at 10 – so it is still not in single digits, but sits at 10 — with the put/call ratio at .99 today. I do not know. My bet remains that we should see the market get whacked and the reopen stocks should hold on into a pullback like that, much the way the tech stocks held into the mid-June whack.

Look at the way the S&P came down in mid-June.

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Now look at the way the Invesco QQQ (QQQ:Nasdaq) came down — the QQQs barely blinked.

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Note: I will be a guest on Trade Gate tomorrow (Thursday) morning at 9:30 a.m. ET (yes, right at the open!). If you would like to tune in, then go to: https://www.youtube.com/results?search_query=tradegatehub.

New Ideas

On a trading basis I think United Parcel Service has a decent risk/reward for a trade. Under $190, and I’m wrong to bottom fish. But if I am not wrong and it rallies, maybe something close to $200 is doable.

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Keep in mind that Energy Select Sector SPDR (XLE) - Get Free Report needs to get up and over this $50- area to start the improvement I see.

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Today’s Indicator

The Volume Indicator is at 47%, so it’s not overbought -- yet.

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Q&A/Reader’s Feedback

Helene welcomes your questions about Top Stocks and her charting strategy and techniques. Please send an email directly to Helene with your questions. However, please remember that TheStreet.com Top Stocks is not intended to provide personalized investment advice. Email Helene here.

MicroStrategy (MSTR:Nasdaq) looks like it is trying to form a base. I know it’s a Bitcoin play, so it makes me hesitant, but if I forget that and just look at the chart, then a move up and over around $850-ish should be good. A pullback near $700 should be buyable.

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Palo Alto Networks (PANW:Nasdaq) is in the growth stock area that I am not currently fond of, but it has some support in this $350-$370 area. It currently feels like a falling knife, so a bounce from here that probably comes back down again makes sense. If it got to those blue lines I’d take a stab on the long side.

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Stratasys (SSYS:Nasdaq) is an interesting chart. It needs more time to develop sideways before it is ready and can look more like a base, but I’m inclined to be favorable toward it for now, even if it is just trapped in the range between $19 and $27.

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