Our weekend stock scans produced a few quality buy patterns, and First Trust ISE Cloud Computing Index Fund ($SKYY) was one of them.

On the weekly chart below, we see that $SKYY rallied above the upper channel of its long-term trendline just under two months ago.

The 10-week MA is now also above that top trendline, and is providing support to the current six-week consolidation at the highs:



Drilling down to the daily chart interval, we see that $SKYY recently pulled back to and reversed off the 50-day MA, which led to a sharp rally and false breakout two weeks ago. The current pullback found support at the 20-day EMA the past few days:



This is the second consolidation in $SKYY since the big base breakout in mid-July. The price action should hold the 50-day MA and push higher over the next few weeks, as there is minimal overhead resistance (due to the current base being well above the upper channel trendline).

Since $SKYY is listed as a new ETF trade setup in today's Wagner Daily, paid subscribers should note our exact entry, stop, and target in the "watchlist" section of today's report.

The Claymore/AlphaShares China Small Cap ETF ($HAO) has had a rough two weeks of trading, but we remain long because the price action is still in trend mode.

Looking at the daily chart below, we see the price action is still holding the 20-day EMA, but support from the uptrend line and 50-day MA is now above the breakout pivot at $25.00:



Whenever the 50-day MA climbs above the entry point of a position we are holding, it's usually a great sign because the 50-day MA is a big time support level in an uptrend.

Deron Wagner is the Founder and Head Trader of both Morpheus Capital LP, a U.S. hedge fund, and MorpheusTrading.com, a trader education firm.