I’ve seen a few mentions in the last week or so of deteriorating breadth and fewer new highs despite the market advance, as worrying signs of potential market weakness, but for now I am still seeing plenty of stocks with promising setups. Here are two new long entries for Monday’s open:-
This isn’t the world’s prettiest chart near-term but the fact is a close above $35 following its earnings announcement was going to be enough to trigger this entry, being a 50-day high and signaling a breakout from its most recent congestion area. A break of the July high would certainly have made it more impressive but wasn’t necessary to enter. The second chart demonstrates why. Looking at a weekly line chart for additional clarity, the trend here is clear, and that’s a weekly closing high, the highest since December 2007.
Our initial stop will be the 9/24 close of $32.46. Assuming we don’t have an immediate reversal of this breakout we should soon be able to move it up to the subsequent higher lows this month of $33.00 and $33.72.
Eaton Corp ($ETN)
This is a fairly straightforward breakout entry. $ETN powered to an all time high on Friday post-earnings, and looks to have finally overcome a $6 range that has held it for the last 6 months. The 10/9 close of $65.65 is an ideal stop, being the most recent higher low with the 20 and 50-day MA’s above and the 200-day approaching.