EB Watch List Update Report

Dear Members, KEY EARNINGS REPORTS: Monday: None Tuesday: AYI, PAYX MARKET NOTE: It's the calm before the storm. We have almost no significant companies reporting earnings this holiday-shortened week. But get ready because next Tuesday Alcoa (AA) kicks off earnings season and it's bound to be a VERY interesting earnings season. Why? Well, everyone has written off Q1 results because of the horrible winter weather throughout much of the nation. The weather was fine during Q2 so there'll be no built-in excuses. Instead, traders will be focusing intently not only on Q2 results, but Q3 and 2nd half 2014 guidance. Based on the rally we've seen in NASDAQ and Russell 2000 shares recently, there'll be a lot on the line starting next week. ADDITIONS TO WATCH LISTS: There are no additions to our Watch Lists today. BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: Short Watch List: ARG - did close above our Closing Stop of 109.75 on Friday and did so on heavy volume so we have REMOVED ARG FROM OUR WATCH LIST. LL - may have bottomed with its recent bullish engulfing candle with a long-term positive divergence in play. A close below 73 would negate that. Otherwise, I'd look for short-term strength, possibly to the 50 day SMA. Then we'll re-evaluate. SBH - nearly reached its 50 day SMA earlier today after recently printing multiple long-term positive divergences. Shorting around the 50 day SMA makes sense, but be very careful on any high volume close above the 50 day SMA as that would likely mean that the long-term positive divergence marked a bottom. Large Cap Watch List: CNP - Accelerating to the upside on very strong momentum. FDX - Hesitating a bit, but accumulation the past couple weeks is apparent. Other than a possible 20 day EMA test, I'd look for higher prices here. HSP - 49.75 marks price support and that 20 day EMA is important as well because a long-term negative divergence is in play. A close much below where it is now and I'd expect to see a 50 day SMA test, at which point I'd consider at least a partial long position. JWN - Consolidating in what appears to be a symmetrical triangle. Bullish. NVDA - Has triggered initial entry, but is simply consolidating recent weakness. A trip back to 17.50-17.75 cannot be ruled out. Our Second Entry is at 17.50. Mid Cap Watch List: GRPN - Continues to consolidate above its rising 20 day EMA. This one is volatile and aggressive, but still looks good. WTW - After failing to hold trendline support, then June price support, it appeared WTW was likely heading to test price support close to 19.50. Today's action certainly hasn't changed my thinking here. Small Cap Watch List: MTRX - Losing neckline support on Friday wasn't the best of technical options. That opens up more potential downside action to possibly trigger our Final Entry at 31.00. Our Second Entry was triggered at 33.00 late last week. DELETIONS FROM OUR WATCH LISTS: ARG has been removed due to a closing stop violation. Happy trading! Tom Bowley Chief Equity Strategist EarningsBeats.com