I don't play these stocks as they are a tad too "slow" for my liking. But these stocks have led the market superbly during the recent run and it would be useful if one keeps an eye on them, no matter which stocks you trade, to get an idea of which way the market is heading. Look specially for any signs of weakness in these stocks as it could signal the start of a potential consolidation period or even, a pullback.
I had written last weekend that I expected the markets to continue the rally and I also expected the financials to lead the way. I must admit here that I did not expect to be proven right in such a spectacular fashion. However, XLF is approaching an important resistance level here, so keep an eye on that.
GOOG is right at the 50MA. How it behaves here early tomorrow should provide one with an easy clue of the underlying strength in the markets.
GS had been very impressive in the way it just barged through MA(50) and MA(200). However, it too has an important resistance level coming right ahead.
AAPL broke through the important 215 barrier on very impressive volume on Friday. 215 becomes a strong support level now. Any sign of the gap from Friday being filled should be taken as a sign of the markets losing momentum, not that I expect it to happen. A low volume test of the support is more likely.
To find out how overbought the markets are and my strategy for playing the next week, please click here.
For some long and short setups for next week, see here.
Take care and good luck tomorrow!