Setups for the Week of 4/18

MELI rocketed from 64 to 87 in two weeks, and the stock is now digesting those gains. Those lucky enough to have a large gain on the stock are taking profits, and shares are exchanging hands from anxious sellers to stronger hands. MELI is making higher lows and lower highs, and it looks like it wants to break out sooner rather than later. A move above 86.90 would ignite the next leg up.

EL has seen three consecutive weeks of tight price action, with 97 acting as a ceiling and 94 as support. Sellers aren't desperate to dump shares even though the stock is at all-time highs, evidenced by tame volume on shallow pullbacks. The 20-day moving average proved good support last week, as it nudges the stock back up to the pivotal 97 area. A break above 97 should lead to a solid continuation of EL's uptrend.

FOSL is similar to EL in that it's consolidating nicely at all-time highs. Price action has also been tight, indicating a lack of big sellers. Breaking 95 should easily lead to triple-digit land as a preliminary target.

RL has traded between 116 and 130 since early February, after the stock gapped up on big volume on 2/9. Aside from a high-volume sell-off in mid-March, volume has been relatively quiet during the consolidation, which is a good sign. The 50-day moving average has provided support twice, and RL is now making higher lows as it prepares another assault on 130. If the sellers lift, RL should see some nice gains ahead.

RNOW originally broke out above 28 in early March, and it's setting up again. The stock has formed an ascending triangle, with progressively higher lows and resistance at 33.50. The 20-day moving average has been defended by the bulls, and RNOW looks ready to break higher.

SOHU broke above 90 in early April and has since consolidated in a tight flag between 99 and 92. Previous resistance has now turned to support, and the moving averages are catching up to price as the stock takes a well-deserved rest. Volume in the flag points to accumulation, as up days have been on higher volume than down days. Given the strength in other Chinese names, it seems like only a matter of time before SOHU breaks out once again.