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Top Stocks With Helene Meisler

 Top Stocks

Watch the S&P 500 Level

BY Helene Meisler | 09/18/14 - 07:33 PM EDT
Stocks in Focus: GOOG, GOOGL, FCX, AEGR, AMZN

The Market

I saw someone say today that every stock he owned was either red or flat. My initial reaction was to laugh until I realized my portfolio wasn’t that much different. Clearly, I have missed all the good hot stocks in this run-up.

But maybe that’s what happens when the S&P opens up 10 points, then sits there all day and the net breadth of the market leaves us with a net differential of plus 720 issues. Even worse is net volume. I cannot even believe these numbers can be correct. The differential between up and down volume was plus 300 million shares. Two days ago, the S&P 500 added nearly 15 points and the net volume was plus 1.35 billion shares.

Yet the S&P keeps pushing higher. And if the Scots vote “No,” on independence from the U.K., it will likely continue to push higher -- whether individual stocks play along or not. I really think this is because of all that passive money that is going into index funds and out of mutual funds.

I can cite plenty of statistics that say this is not a widespread rally, but you probably see it in your own portfolios as well. So, instead, I will share with you that the 30-day moving average of the put/call ratio finally turned down (shown below) and that is bullish.

What we should watch for now is the level on the S&P 500. This resistance line has been a good one for nearly three months now. With the market now pushing back to a short- term overbought reading (it’s already intermediate-term overbought), the key is to see if it can push through this line. If the market fails to push above it, when it ought to correct in the next few weeks. If it can push over it, then the market will probably mill around to digest the overbought reading and then rally on.

I had really thought the market would spend more time correcting into late September and then set up a year-end rally. But if the market doesn’t come back down next week, then my timing will clearly have been wrong.

New Ideas

I wish I had a list of stocks that looked like bases, but you can see the bases don’t even work! So I will go back to the Google (GOOG, GOOGL) chart, which everyone seems to ask about. My worry is that spike overhead just above $600, but it did hold $580 on the downside. So if GOOGL can shoot up and over this congestion area, it should eventually push higher, toward $650-ish, I really wish it would wait for mid-to-late October though! I just feel that if it waits, it can keep it going into year-end.

Today’s Indicator

The 30-day moving average of the equity put/call ratio is heading down now.

Q&A

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.

I really thought Freeport-McMoRan (FCX) would be doing to do a lot better than it has, but it hasn’t. I have $34 as my support zone and it is my view that the Scottish vote actually will matter for this stock. You see, if the euro rallies, then this stock will probably rally, too. If the euro wipes out, then this stock probably will as well. If it holds at $34, we’ll have a small W bottom, which I would take as bullish.

Aegerion Pharmaceuticals (AEGR) is trying to form a base. The obvious first target is the gap fill around $40 but if that base really does play out, then the target would be closer to $46-ish. If it moves below $32, I’d give up.

I am not a fan of Amazon (AMZN) but it hasn’t broken the uptrend line yet. As long as it stays above the line, the uptrend -- if you can call it that -- is intact. I can tell you that a break below $320 and the longer-term downside measured target is around $270, but I suspect that will be months out in time -- if or when it comes.

As an aside, here is yet another example of a stock that has done nothing but go down since early September and this week’s rally is a dud so far.

Regards, Helene Meisler

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