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Support and Resistance

Nasdaq: Closed at 1713.70
Resistance: 1743 to 1750 may act as some resistance (10 day MVA is at 1754.22), then 1775 (the 18 day MVA is at 1771.33). 1850 is next (200 day MVA at 1849.91), followed by 1875, the bottom of the November consolidation. The top of the November consolidation at 1934 to 1941. After that is 1980 (the December gap up point) and some minor resistance at 2000. Then the January top at 2098.88.
Support: 1700 (February low at 1696.55). Then 1613 to 1626.

S&P 500: Closed at 1091.49
Resistance: 1100 is the immediate test. The 10 day MVA (1108.62) and the 18 day MVA (1116.11) may act as resistance in the continuing downtrend. After that is 1125 and the 200 day MVA (1130.80) is sitting right above that level. There is some resistance at 1150 as well; any bounce on low volume might find that level trouble. After that the December high (1173.62) and the January high (1176.97) are the real key to any longer term move higher. Those points also mark roughly the lows of summer 2001 consolidation that runs up to 1240. Before that point there is some resistance at 1183 from March 2000.
Support: 1075, the February low that completes the head and shoulders. After that 1050 represents the October lows.

Dow: Closed at 10,035.06
Resistance: 10,100 could present some problems on the way back up as it held for so many tests before breaking. The March down trendline at 10,150, a key point. The 18 day MVA is at 10,196.05 and the 50 day MVA at 10,206.61. 10,300 blocked the move the last time it made to that level, and the up trendline from September is right there at 10,350. After that is 10,400, the barrier to the upper half of the March trading range. The top of the June, July, and August 2001 trading range at 10,600 (10,679 intraday high) marks the top half of the March trading range. 10,800 represents some resistance. That is followed by resistance at 11,000 on its way to the May 2001 high at 11,345.72.
Support: The 200 day MVA (9935.92) was undercut on the low, but was able to help bounce the index back up. After that it could drop to 9500 as it has entered into that shelf of support from 9500 to 10,100.

Weekly Economic Calendar (All times Eastern). The figures are the consensus expectations, not ours.

4-24-02
Durable Orders, March (8:30): -0.6% actual versus 0.5% expected and +2.7% prior (revised from 1.8%)
New Home Sales, March (10:00): -3.1% (878K) actual versus 890K expected and 906K prior (revised from 875K)
Fed's Beige Book (14:00): More of the same; economic recovery stable if uninspiring and still subject to risk.

4-25-02
Initial Claims, 4/20 (8:30): 421K actual versus 425K expected and 452K prior (revised from 445K).
Employment Cost Index, Q1 (8:30): +0.8% actual versus 0.9% expected and 0.9% prior
Existing Home Sales, March (10:00): 5.4M (-8.3%) actual versus 5.50M expected and 5.88M prior

4-26-02
GDP-Adv., Q1 (8:30): 5.0% verus 1.7%
Chain Deflator-Adv., Q1 (8:30): 1.5% versus -0.1% prior
Mich. Sentiment-Rev., April (9:45): 94.5 expected (lowered from 95) versus 94.4 prior

TEAM TRADES

STSA: A savings & loan in a tight ascending wedge pattern on top of the breakout from a cup with handle pattern in March. We loves these ascending wedges on top of cup with handle breakouts. We have been watching STSA on the Daily for a week or so, and Thursday it gave a signal, moving up in the pattern on a volume spike (a 'get ready' spike). Today it was a bit long in coming, but we wanted to make sure it cleared resistance on good volume. We were watching the volume rally all session and were anticipating the breakout. With about 15 minutes left in the session it made that move, breaking over 22.80. The alert was issued and we immediately put a limit order in at the ask which had jumped to 22.94. That was good enough, but then the stock slid lower; could have had a better entry point, but the volume was good and the stock moved up to close at 22.98. We got in near the session high. Oh well, we like the move and love the volume.

THE PLAYS:

NEW PLAYS:

AMGP (Amerigroup--$33.50; -0.30; no options, new issue): Health care plans
http://biz.yahoo.com/p/a/amgp.html
STATUS: Testing breakout. A new issue in November 2001, AMGP formed its fist base from January to March, broke out, and is now in a nice, low volume pullback to the 10 day MVA. Today it tapped that level (33.30) and held on continued declining, below average volume (101K; avg. is 150K). Good buying and good money flow. Price/volume action is very good as volume surged on the rally and has pulled back handily on this test. Great sector and looks ready for more.
BUY POINT: 34.25 on volume of 200K or better. Target=41.10 (initial). Stop=31.85.
POSITION: Stock (no option chain yet).

http://www.investmenthouse.com/cd/amgp.html

QFAB (Quaker Fabric--$13.80; +0.36; no options): Textile maker
http://biz.yahoo.com/p/q/qfab.html
STATUS: Breakout test. Not sexy, but it is something investors understand, and it has a solid business. That goes a long way in this market. Moreover, it solid buying, money flow, and price/volume action. QFAB broke out of a 10-month cup with handle in February and is now testing a strong move up two weeks ago, holding above the 10 day MVA (13.21) as it does so. Today it bounced up off of the 10 day MVA on continued above average volume (181K; avg. is 115K). It looks ready to make the break over the near term high (14.21) that will carry it to the next level.
BUY POINT: 14.31 on volume of 200,000 or more. Target=17.50. Stop=13.25
POSITION: Stock (no option chain)

http://www.investmenthouse.com/cd/qfab.html

CMH (Clayton Homes--$17.21; +0.39; optionable): Manufactured housing (mobile homes)
http://biz.yahoo.com/p/c/cmh.html
STATUS: Reverse head and shoulders. CMH is moving toward a new 52-week high as it works through a 4-month base that tested just below the 200 day MVA on the low (that formed the head). It is now working on moving past the neckline in the pattern that is represented by the December high at 17.62. That is the point to beat. Today it made a good stride toward that rising on above average though a bit lower volume (550K; avg. is 510K). Price/volume action is excellent with a 2 to 1 advantage for accumulation weeks over distribution weeks. Relative strength has already broken out on this move. We really like the fact that mortgage applications rose this week on the lower interest rates.
BUY POINT: 17.72 on volume of 750K or more. Target=21.25. Stop=16.40.
POSITION: Stock and/or August 15c to buy (CMH HC; low OI, delta 81).

http://www.investmenthouse.com/cd/cmh.html

Continued plays:

AMMD (American Medical--$24.25; -0.16; optionable): Medical appliances
http://biz.yahoo.com/p/a/ammd.html
STATUS: Double bottom with handle. Testing the breakout now on below average volume (191K; avg. is 360K). Very nice action with a tight doji today. Good test and looks ready to move again.
BUY POINT: New positions: 25.30 on volume of 540,000 (original buy point 23.98). Target=28.75. Stop=21.90.
POSITION: Stock and/or September 20c to buy (TQI ID).

http://www.investmenthouse.com/cd/ammd.html

DVA (Davita $25.91; +0.11; optionable): Specialized health services
http://biz.yahoo.com/p/d/dva.html
STATUS: Flying plateau. Tested the 10 day MVA again on the low (25.60) and reversed to close fractionally higher on rising volume (537K; avg. is 650K). Looks ready to make the break to the new high.
BUY POINT: 26.05 on volume of 800K. Target=31.25 (initial). Stop=24.25.
POSITION: Stock and/or October 22.50c to buy (DVA JX).

http://www.investmenthouse.com/cd/dva.html

Puts: Many put plays bounced today, but we are not going to rush out of them as most are still in the black for us and any bounce we see will most likely be relatively short-lived for these stocks as they were already weak (that is why we picked them for the downside). Thus, we are hanging onto the positions tomorrow unless there is a major break of resistance.

Watchlist stocks: Still looking strong but removed to make way for new plays as well.

PHTN: Started the move Wednesday and continued it today. Yes it is a semiconductor but it is bouncing off the 50 day MVA on stronger volume, hitting our buy point over 50. Still a buy on a Nasdaq bounce for a run to 60.
SMSC: Holding the 18 day MVA still, showing a tight doji today as it tested the moving averae on the low. Volume rose a bit on the move. Could be ready to make a bounce higher. Looking for a move over 25.55 to take positions.

Good Investing!
Jon L. Johnson and your Technical Traders Report Team

All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Online Investment Services, LP. or its paid consultants and are not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on our related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolio of Partners in Online Investment Services, LP. or its paid consultants may, in some instances, include securities mentioned herein and on our web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors.

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