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Will You Be Wearing Red Friday?

If so, it’s not just because of Valentine’s Day – we’ve been red most Fridays this year, and this was the first red Thursday since before Thanksgiving.

The Market

This was the first red Thursday since Thanksgiving. I had thought it was only this calendar year, but was informed we have not had a red Thursday since before Thanksgiving. But was there any real selling? The answer is still no.

Statistically there wasn’t much, except that even though bonds barely budged, the Utes had quite another big day. It’s hard for me to get on board the Utes up here, but it’s also hard to deny their strength.

We will be overbought on one measure – the Nasdaq Momentum Indicator – Thursday. Using my own Overbought/Oversold Oscillator we will be overbought by Tuesday.

What would be helpful in the market is if we could get a rotation into the stocks that have lagged. That means oils and banks and cyclicals. This is why I keep showing you the chart of Cummins (CMI) - Get Free Report, but you can pick any cyclical stock to fuss over. The breadth was flat today while the small caps were up.

I remain hopeful that the banks can outperform the S&P 500, but so far it’s a whole lot of squiggling at the lows.

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In any event, most Fridays have been red in 2020, which makes me wonder if everyone is now expecting this Friday to be red. If we do get a day where there really is some selling, most of the indicators that are trying to turn upward here will turn right back down.

New Ideas

I want to highlight the chart of Philip Morris (PM) - Get Free Report, because with all the talk of ESG investing – that’s environmental, social and governance – this stock hasn’t given up a thing. It’s downright shocking, especially considering it yields over 5%.

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In the banking area, there is a teensy-weensy head-and-shoulders bottom in the chart of US Bancorp (USB) - Get Free Report that intrigues me.

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Today’s Indicator

The 10-day moving average of the put/call ratio has barely moved, so instead I will point out that the voting of the day traders at American Association of Individual Investors pushed to bullish with bulls up seven points and bears down eight.

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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.

SunPower (SPWR:Nasdaq) looked like it was breaking out and then it gapped down. Quite frankly, all it has done is fall into support, but that move over $10 now looks like an island top, so unless it can fill that gap from this morning in a hurry, I’d stay away from this.

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Simulations Plus (SLP:Nasdaq) is a chart trying to bottom, so as long as it stays over around $35, it is an interesting chart. I only get a measured target around $40, though.

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We had a nice trade in Pinterest (PINS) - Get Free Report a month or so ago, when it was coming off the bottom. I think it should rally from a gap fill near $23, but I also think it is going to take quite a bit to eat through that resistance that begins in the mid- to upper-$20 area, so I would treat this as a trade and not much more.

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Tandem Diabetes (TNDM:Nasdaq) brings back memories to those of us of a certain age, since the ticker was for a computer company, not a health care company at one point. In any event, it’s up too much for me to get on board, but the measured target is $85-$90.

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Southwest Airlines (LUV) - Get Free Report is trying to break out of a base. My guess is if it can do it, it gets to $60 and then pulls back to retest the breakout. Much the way my new favorite airline, Jet Blue (JBLU:Nasdaq) did before re-rallying.

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