After putting in a low of $127.14 on June 4, the S&P 500 SPDR (ARCA:SPY) ETF has been moving higher, and overall, it is up 2.83% in the last month (from $131.97 to $135.70). During that time, though, some stocks have been on fire, making double-digit returns. Each has its own particular levels to watch both to the upside and downside. If the resistance levels are taken out, look for further upside. If the support levels are taken out, though, the market will lose a few of its leaders and the stocks and market could correct lower.
SEE: Interpreting Support And Resistance Zones
Sprint Nextel (NYSE:S) is up 32.91% over the last month, from $2.37 to $3.15 and has been one of the top performing mid-cap stocks recently. For the first time since October, Sprint has been able to hold above the $3 level. Formerly, the stock was stuck between the October low at $2.10 and $3, but the breakout signifies a further advance could be under way. The target based on the breakout is $3.90. Back in 2010 and early 2011, $3.75 to $4 was a support area that may now pose resistance. While the direction appears to have turned higher in this stock, a drop back below $3 negates some of the bullishness. Moves below $2.75 and $2.44, both support, mean the trend is not higher after all, and the stock is likely to continue to move sideways or head toward primary support at $2.10.
Questcor Pharmaceuticals (Nasdaq:QCOR) struggled to breach 2011 levels, even when the market was trending higher earlier in the 2012, but it too appears to have now broken out. The stock is up 26.55% in the last month from $40.71 to $51.52, and recently put in a fresh 52-week high at $51.88. With the long-term and short-term trend higher, there is no immediate upside resistance, and the breakout target is $58 to $60. There is a support band between $46 and $44; a drop below indicates the stock is moving back into the range between $45 and $32.83.
SEE: Blending Technical And Fundamental Analysis
Edwards Lifesciences (NYSE:EW) has been moving aggressively higher over the last several sessions, as it pierced through the psychological $100 mark. The stock is up 21.85% from $84.10 to $102.48 in the last month. Primary support is at $92 and marks the long-term breakout point. If a pullback toward this point occurs, it presents a buying opportunity. If the stock moves much below this, though, the breakout may be false and the stock could proceed lower. The next support levels are $88 and $81. There is little overhead resistance at the current time, but the steep price action is likely to be unsustainable and some sort of pullback is probable in the short-term.
Seattle Genetics (Nasdaq:SGEN) is in a long-term choppy trend higher, but has recently accelerated to the upside. The stock is up 17.78% from $21.43 to $25.24 in the last month, performing very well on this market bounce. The upper band of a long-term trend channel going back to 2009 is currently crossing right near $26. This indicates that $26 is a likely resistance point. If the stock can't push through it, watch for a correction. $22.50 to $22 is the nearest daily support level, and if breached, it signals a further decline to $20.
Ocwen Financial (NYSE:OCN) is up 21.02% from $14.89 to $18.02 in the last month and has been in a strong trend higher since end of 2010. The trend channel for this stock also indicates it is nearing the upper band, and a potential resistance zone. $18.50 to $19, if the stock reaches that level, could be a short-term topping area. Support is at $16.50, with a drop below that signaling a decline to the long-term trend line support at $15.
SEE: Support And Resistance Reversals
The Bottom Line
The last month has produced some big winners as the stock market has managed to rally off its lows. Some of these stocks are likely to top out soon. Watch the resistance areas when applicable; if the stock can't get through it, it will likely correct lower. On the other hand, there are a couple stocks that still look like they have room to move. Having broken long-term patterns these stocks may continue to lead this market higher. No matter what stock though, a drop below support is a warning signal and indicates the upside may be over - at least for the short-term.
At the time of writing, Cory Mitchell did not own shares in any of the stocks mentioned in this article.
Charts courtesy of Stockcharts.com.