Liam McMahons Stock Newsletter

Sponsored by Wright Time Capital Group

Volume 1 Issue 4 January 22, 2014

WRIGHT TIME CAPITAL GROUP January 22, 2014 Authored by: Liam McMahon

Liam McMahons Stock Newsletter

Sponsored by Wright Time Capital Group

Introduction
Welcome to my stock newsletter. For those of you that dont know me, my name is Liam McMahon and I am a strategist at GlobalFxClub.com, a subsidiary of Wright Time Capital Group. While my work over at GlobalFxClub.com is mostly dedicated to forex, I have been trading stocks since 2008 and though I share a lot of my stock setups on twitter (@Duke0777), Ive decided to formalize the process in an effort to provide more in-depth fundamental and technical analysis. I will be focusing primarily on US equities, though I will also discuss some foreign indexes, especially the major European markets and the Japanese Nikkei. The goal of this newsletter is to provide in-depth analysis and point out both longer and shorter term trading and investing opportunities in the US stock market. I will be rating stocks as buy, hold, or sell and I will provide possible targets for the setups that I see. I will also be providing time frames to consider on all the stocks I analyze. The newsletter will focus on the clearest opportunities out there, not necessarily the most popular stocks. If I dont see a clean setup on Apple, I wont be talking about Apple, regardless of how many people love talking about it. I will be releasing the newsletter twice a week, on the Sunday before the trading week starts and then on Wednesday morning before the US session begins. Thanks for joining me on this exciting new venture; I look forward to communicating with you throughout the coming weeks, months and years. You can contact me on twitter (@Duke0777) or at LMcMahon@wrightinv.com

Liam McMahons Stock Newsletter | 1/22/2014

Disclaimer
Liam McMahon and Wright Time Capital Group LLC are not paid to promote these stocks. Investing in the stock market is a challenging venture and entails a substantial amount of financial risk. Investing in stocks may cause you to lose some or all of your investment and should only be done with risk capital. Always trade on your analysis and within your own risk parameters. Wright Time Capital Group and Liam McMahon are not responsible for any loss you sustain based on any advice distributed through this newsletter or through any of our various social media outlets, email, and any other type of communication, electronic or otherwise. All analysis and recommendations are solely the opinion of Liam McMahon and Wright Time Capital Group team, we can be wrong like anyone else. Please understand and accept the risk involved when investing. These recommendations are intended for educational purposes, to help you understand different types of technical and fundamental analysis. Only trade with money you can afford to lose.

Liam McMahons Stock Newsletter | 1/22/2014

The Indexes
The major indexes continue to chop around key resistance here, and continue to show their resilience by overcoming a somewhat scary start to the day yesterday- S&P 500 futures dropped as low as 1826 before recovering nicely. All eyes are still on the 1846.5 highs as resistance while that 1826 level stands as the first major level of support. The really large support level comes in at about 1818.1, which is the major supporting trend-line and the 200 period EMA on the four hour chart. This sideways consolidation has begun to take the shape of a somewhat stunted ascending triangle, which tend to work as a bullish continuation pattern. A break to new record highs should find some pretty decent follow through and only a move below that 1818 level raises any concerns.

S&P 500 Futures (4 hour chart)

Liam McMahons Stock Newsletter | 1/22/2014

NASDAQ futures continue to trade very strongly, making another record high today at 3626. 3650 targets remain intact, 3600 is the new first support, 3586.53 (the 50 EMA on 4 hour charts) is the second support, and 3570 (100 EMA, major trend-line) is the third significant support level.

NASDAQ Futures (4 hour chart)

Dow Futures have been very choppy lately, putting in a false break above the previously noted pennant pattern, before breaking back down to test the support at the pennant bottom. Ive redrawn the pennant now, and 16.5 is the major resistance level, while 16.15k -16.3k is the major support range. That longer term ascending trend-line is really the line in the sand for bulls and bears, so long as it holds the bulls remain in control. As with S&P500 futures, the current price action appears to be a consolidation before a run to new record highs.

Dow Futures (4 Hour Chart)

Liam McMahons Stock Newsletter | 1/22/2014

Trade Idea Update

SO has finally triggered our long setup as of the close yesterday. Remember there are two different setups on this stock, one for shorter term traders and one for longer term investors. See Issue 1 for more. GE has hit our first short target at 26.10 and looks poised for more downside. Next major support comes in at 25.5, while the 26.75 area stands as support. UPS has continued to consolidate a little after its very volatile end to last week. Our short setup remains active and appears to be in good shape. Resistance extends up to about 102.00 while the next major support zone is around 96.00. I still feel as though this stock has some significant downside remaining. F has recovered about 0.84% today; short trade remains active until the 17.00 level is broken. WFC continues to look extremely bullish. It made a new high yesterday at 48.84, and is threatening to take out that high today. First target remains 47.00, and the second target is open. Hold em if youve got em. XRT, OSTK, M this triple trade idea has been 2/3 successful as OSTK and XRT look good to continue up and down, respectively. M has been a bit weaker than Id like lately, and we may see that particular trade fail. If so, well be looking to reinitiate longs a bit lower. See previous issues for more details on that.

Pharmaceuticals
BMY (Bristol-Myers) has been a steady gainer in big pharma since late 2012, and there arent any really any signs that will change in the near term. Major support lies at about the $54.00 mark, and thats the level to watch going into earnings on Friday before the bell. A dip down to this level pre-earnings could offer a nice long opportunity, assuming youre willing to take the risk of a major gap down should earning disappoint (I try to avoid those types of trades). Alternatively, a small gap down to this level after earnings are released could provide a nice swing long position. Major resistance sits at the recent highs of 56.83; a break of that level will likely mean more strength to come.

Liam McMahons Stock Newsletter | 1/22/2014

BMY CALL: BUY ENTRY: NEAR 54.00 (DEPENDING ON EARNINGS REPORT) TARGET 1: 58.00 TARGET 2: OPEN TIME FRAME: 5 DAYS ? INVALIDATION: DAILY CLOSE BELOW 53.50

Liam McMahons Stock Newsletter | 1/22/2014

MRK (Merck) touched a new high of $53.44 back on the 13th of this month after the news that the company was filing to release their new melanoma drug, MK-3475. MK-3457 is the first of a new type of cancer drug that targets advanced stages of skin cancer (and is currently being tested for efficacy against other types of cancers as well) and if the drug should be approved for use, it should have a dramatic impact on Mercks bottom line. After the rally that marked the news, the stock has fallen back to trade around $51.30 today, offering a nice opportunity to buy the dip for another move higher. Major support comes in at $50.50, and the setup suggests a move back to the previous highs and beyond. It may take a couple days for the stock to find its base, so making several smaller purchases down toward the $50.50 area may be the best strategy.

Liam McMahons Stock Newsletter | 1/22/2014

MRK CALL: BUY ENTRY: MARKET $50.55 (STAGGERED PURCHASES) TARGET 1: 53.44 TARGET 2: 56.00 TIME FRAME: 1-3 MONTHS INVALIDATION: DAILY CLOSE BELOW 50.00

Financials
Morgan Stanley has fallen the past two days (down 0.7% today) after hitting a new high of $33.52 after its earnings report last week. This dip provides a nice opportunity to add to our financials exposure (were long WFC and C) with a nice low risk long setup as the pair prepares to retest its breakout point and its 8 day EMA.

MS CALL: BUY ENTRY: MARKET 32.00 TARGET 1: 34.25 TARGET 2: OPEN TIME FRAME: 1 WEEK TO 3 MONTHS INVALIDATION: DAILY CLOSE BELOW 31.50

Miscellaneous
Another big name to keep an eye on over the next couple weeks is Exxon Mobil (XOM). Since hitting its high of 101.74 the stock has traded lower in a clean flag pattern with below average volume. This classic consolidation pattern could offer nice long opportunities in the coming weeks. Ill be talking about this one more as more time passes and the consolidation continues.

Liam McMahons Stock Newsletter | 1/22/2014

XOM

Conclusion
Liam McMahons Stock Newsletter | 1/22/2014

The major indexes continue to show their resilience here early in the year, but so far bulls and bears have kept their counterparts mostly in check; we havent seen any really dramatic, sustained moves in either direction. We have lots of trades that have begun to work in our favor, so now is the time to start protecting those profits and keeping an eye out for the next round. As we begin to enter the heart of earnings seasons, ideally well see volatility begin to pick up and the markets being to pick a side (up or down) to give us a more stable trend to work with. For now, it makes sense to bet on the continuation of the ongoing uptrend. Tomorrow morning we have US weekly unemployment claims, the first and last really significant US data of the week, so markets will finally have some news to react to. Economists are expecting a slight increase in the number of claims, from 326k up to 331k. I remain bullish on financials and utilities, and mostly bearish on retail (with some exceptions, as noted in last issue). Keep an eye on the indexes, and as long as they continue to look constructive, don t be afraid to

keep buying stocks in good solid up-trends. Only change that strategy once the market signals that something has changed in the underlying psychology.

10

Liam McMahons Stock Newsletter | 1/22/2014