|
|
yahoo stock, us stock market
Begin Part 2 of 2
THIS WEEK
The Fed meets Tuesday, but it is pretty clear that the Fed is going to leave rates unchanged and issued the same statement about the risks between weakness and inflation being equal even though they really are not. The Fed is preoccupied with prosperity equaling inflation. The eighties and nineties proved that as garbage, but old habits don't die easily. Heck the seventies were hardly prosperous with huge inflation, a stagnant economy, and a massive bear market. Unemployment was high then as well. Hardly prosperity but huge inflation (remember interest rates at 18%?). In any event, the Fed is out of the picture as far as a rate increase.
What we are looking for is more selling to get sentiment to extreme levels. It is already happening with the put/call ration above 0.90 for two consecutive sessions and the VIX/VXN starting to awake from their slumber (though still way too low). Bullish advisors have been backing off the past week but they are still too high with bears too low. There is little upside catalyst right now other than the fact that the indexes have sold hard for a long time. Late last week we saw what a relief bounce could do in the face of the selling. Even with all of the prior down sessions, investors are still not at a point where they are ready to buy back into the big indexes. More selling is needed and/or very strong economic reports. That is not likely to happen overnight.
Thus we have to continue the current course of action: playing the trend down in the large indexes and stocks while playing the uptrend the majority of the market is enjoying. Smaller financials, smaller energy, packaging, etc. If we get the downside action we anticipate, i.e., stronger cathartic selling, the moves can be fast. An important factor in playing the downside is not to overstay the welcome. Downside action tends to happen quickly and then rebounds can be strong. The large indexes are in a continuing downtrend, so you don't have to be exact in the entry point. You just don't want to try and take too much if the selling has been strong on the move. With the Nasdaq down so many days without a serious rally it is just a matter of time before it does give more relief. We will make our plays, hit our targets and then take the gain so when the move comes in the next week we won't get caught short so to speak.
Support and Resistance
Nasdaq: Closed at 1613.03
Resistance: 1620 is possible. Then the February lows at 1696 to 1700. The 10 day MVA is at 1682.42 and the 18 day MVA at 1714.38. These are all resistance points in a continuing downtrend. That is followed closely by resistance at 1743 to 1750.
Support: 1550 to 1560. Then 1500. After that is the September low at 1387.06.
S&P 500: Closed at 1073.43
Resistance: The 10 day MVA (1087.12), the March down trendline (1088), and the 18 day MVA (1097.37) are all resistance in a continuing downtrend. 1100 also represents resistance from previous price consolidations. Then 1125 (price consolidations) and the 200 day MVA (1127.22).
Support: 1063 is the recent intraday low. 1050 represents the October lows and the last price consolidation level before the September low. There is possible support at 1000, but it is not much.
Dow: Closed at 10,006.63
Resistance: Down trendline (10,050). 18 day MVA (10,093.37). 10,100 is also resistance from prior price consolidations. 10,300 blocked the move the last time it made to that level. 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.
Support: The 200 day MVA (9925.46) held Friday on the low. Then the recent lows at 9811. The bottom of the channel is at 9760. 9500 to 9600 are next as the index 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.
5-7-02
Productivity-Prel., Q1 (8:30): 7.0% versus 5.2% prior
Wholesale Inventories, March (10:00): -0.4% versus -0.7% prior
FOMC Meeting (2:15)
Consumer Credit, March (Consumer Credit): $6.0B versus $7.1B prior
5-9-02
Initial Claims, 5/4 (8:30): 407K versus 418K prior
Export Prices es-ag., April (8:30): NA versus 0.2% prior
Import Prices ex-oil, April (8:30): NA versus 0.0%
FOMC Minutes, 3/19 (2:00)
5-10-02
PPI, April (8:30): 0.4% versus 1.0% prior
Core PPI, April (8:30): 0.1% versus 0.1% priorAuto Sales, April (00:00): 6.0M versus
TEAM TRADES
NTBK: A play that was downside became upside as it turned back up from its breach of the 50 day MVA and vaulted on higher volume. Friday we were waiting until later in the session to determine if volume was going to be solid and the moves were going to hold. NTBK looked solid with very strong volume once again. We decided to enter positions as it cleared the recent March highs on that strong volume. We saw the stock trade in a range from 17.90 to 18 for several hours after the early morning surge. It sold back in the last hour, but made an immediate rebound to 18. It pulled back again on lighter volume to 17.83 and held. When it started back up we were ready to enter positions. We issued the alert. The stock was trading 17.92 by 17.94. Optionable, but Friday we were picking this one up for longer term. With the narrow spread we dropped in a limit order at the ask. It did not take long to fill. The stock moved back up to 18, but again it ran into a wall of resistance. In the last 10 minutes it turned and sold down on some heavier volume to close at 17.86; late session selling put us a bit underwater, but that is no problem. We look for it to hold above 17 on some rest and then kick off the move higher once again.
THE PLAYS:
Reading the Plays: Please note that when we reference the 10, 18, and 50 day moving averages (MVA), those are exponential moving averages (EMA). The 200 day moving average is always simple (SMA). We will note when we reference a particular MVA differently, e.g., a simple 50 day MVA. Please click on the Yahoo and chart links for company and charting information. A "prior high" refers to the high at the start of a base.
For conserving space on listings of stop losses, the symbol (7%) indicates that the stop is 7% below the buy point.
Stocks from Thursday report:
PHTN: Crashing lower on the put play on continued above average volume.
CLF: Held steady on the breakout test with a doji on below average volume.
OEX: Tanking lower on the put.
NYCB: Started higher, making the buy point on above average but lower volume.
Good moves: ABCW, ASL, COL, SSRI, PKG
Continued Plays:
GIVN: Trying to make the move, but just no volume.
ABCW: Still rising on the breakout.
AMI: A doji after two strong rally days. May take a rest here.
APPB: Another new high but on below average volume.
BRCM: Put. Took some profits early Friday, but now looking for a new play.
CAT: Put. Stalling at the 50 day MVA once again. This one is refusing to give it up. On a move back down to 52 we will look at closing the play.
COA: Cold feet no longer. Making the move Friday on sharply stronger, above average volume.
COL: Stretching the breakout on lower though average volume!
CCRN: After closing off the high Thursday, CCRN showed a tight doji Friday on very low volume. May take a breather here, but the low volume pause is very good. Again, we want it to hold near 31.
CNMD: Holding again at the 18 day MVA as it regroups.
FDC: Put. Continuing the fall on rising volume. More like it.
GMRK: Continuing its incredible surge higher on massive volume.
GPT: Edging higher but not making much progress. Savings and loan, so the tight pattern could give way to a big move.
GSB: A doji at the April high but very low volume. Don't like this action and will protect positions at this point at 33.
GYMB: Turned lower Friday on lower volume, testing 18 on the low. Not a powerful move up so we need to take care it does not close below 17.50.
HARB: Opened lower at the open, closing lower on sharply lower volume. After such a ballistic move, some resting is expected.
HNT: Pulling back to test the move on sharply lower volume. Testing 28.75 as anticipated.
HUM: Still cannot get through 17, falling Friday on below average volume, showing a doji with a low on the 10 day MVA.
KEY: Three strong sessions, but Friday showed a tombstone doji on rising above average volume. Can look at some covered calls at this point.
NUE: Put. Looks ready to fall finally after testing the 50 day MVA on very low volume.
OREX: Touched down on the 50 day MVA and rallying on strong volume. Looks ready to move again and we are looking at positions over 3.35 on continued volume in the 170K range.
PETC: Unable to build on Thursday's action, moving fractionally lower on very low volume.
PKG: Breaking over resistance Friday on rising, average volume (217K). Needs some more volume and it will be rocking.
PMSI: Health services. Struggling after unable to move higher on low volume, Friday it fell on a sharp volume jump.
RKY: Big volume Friday, but could not move higher showing a doji. Hard to break on up over 69.
RPM: Moved over 17, but no volume.
SSRI: Making the breakout move Friday on heavy volume!
STSA: Not giving us any move up after the dramatic fall. Any rise and we are out.
TENT: Not doing a whole lot right now.
UCI: Like it. Right on the 18 day MVA on a low volume pullback, showing rising volume Friday as it trading in a very tight range.
UPL: Like it. Doji on the 10 day MVA on rising volume Friday.
WM: Took a breather Friday after a big move Thursday.
Best Plays:
1) TYL: Strong bounce off of the 50 day MVA.
2) HTRN: Moving strong.
3) AGY: Put on the kiss goodbye.
4) Continuing plays: UCI, UPL, NUE, PKG, and OREX (back from the dead)
New plays:
TYL (Tyler Technologies; $5.63; +0.43; no options): Software, information technology
http://biz.yahoo.com/p/t/tyl.html
STATUS: 50 day MVA bounce. Tried a breakout move in April but did not have the volume. It was tossed back to the 50 day MVA, but held steady as a rock there, gathering volume Thursday and then jumping off the 50 day MVA (5.22) on huge volume Friday (441K; avg. is 145K). It is banging around in a range between 5.12 and 6 on solid money flow and buying. Price/volume action has been very good in this range. We are looking at picking up positions on a further move higher and also on a breakout over 6.
BUY POINT: 5.75 on volume of 250K or more. Breakout: 6.06 on volume of 500K or more. Target=8.62 (Initial). Stop=5.23.
POSITION: Stock.
http://www.investmenthouse.com/cd/tyl.html
HTRN (Healthtronics Surgical--$13.50; +1.09; no options): Medical appliances.
http://biz.yahoo.com/p/h/htrn.html
STATUS: Breakout test (cup w/handle). HTRN hit its highs at 20 back in early 2000 shortly after its IPO and has since sold back to 5. From their it rebuilt to a high of 12 early in the year. Late January was the start of the current cup pattern, taking it down to the 200 day MVA where it held and then rebuilt the right side, breaking out in mid April. It tested the breakout and now is rallying on some impressive volume (Friday 345K; avg. is 80K). Money flow is out ahead of the move under heavy accumulation. Relative strength has already broke out and price/volume action shows 2 to 1 accumulation over distribution.
BUY POINT: 14.28 on volume of 250K or more. Target=19. Stop=13.25
POSITION: Stock
http://www.investmenthouse.com/cd/htrn.html
Put plays:
AGY (Argosy Gaming--$36.88; +0.87; optionable): Resorts and casinos
http://biz.yahoo.com/p/a/agy.html
STATUS: Put, test of 50 day MVA breach. AGY hit a peak in late April on below average volume and then reversed on a tremendous volume surge. It plunged through the 50 day MVA (41.35) on strong volume, moved laterally, and then rallied higher Friday to test the 50 day MVA on the lowest volume in two weeks (323K; avg. is 285K). After a strong run, there has been institutional selling the past few weeks. The high volume break below the 50 day MVA and the up trendline that started in November when AGY smoothed out its strong rise was a character change. The low volume move higher Friday tested the 50 day and the trendline. We do not believe it will be successful in its recovery attempt.
BUY POINT: Aggressive: 36.50. Breakdown: 35.75 on volume of 350K or more. Target=32.45. Stop=37.75.
POSITION: June 45p to buy (AGY RI; delta -9; low OI).
http://www.investmenthouse.com/cd/agy.html
BRCM (Broadcom--$30.00; -2.23; optionable): Semiconductors
http://biz.yahoo.com/p/b/brcm.html
STATUS: Put. Breaking to new 2002 low. We have been playing BRCM as a put, and on Friday we took some profits on our existing position as the stock had given us nice profit and was trying to bounce. The stock closed on the low with rising, average volume (13.2 million). If BRCM breaks 30 on continued high volume it is easily vulnerable to 25.
BUY POINT: 29.75 on volume of 15 million or better. Target=25. Stop=31.50.
POSITION: June 40p to buy (RCQ RH; -89 delta)
http://www.investmenthouse.com/cd/brcm.html
PORTFOLIOS: Each report, we look at these to see which is in a buy position. We don't cover them all each time, just the ones that look ready to pick up a few shares.
THE LEADERS: DGX, FRX, LLL, MIK. New: ICUI; RMCI
ICUI (41.97; +2.68): Okay, we got the move over 40 Friday and volume was good at 95,600. Not the 150K we were looking for, but supporting the move. We can pick up positions up to 42.50 on this move.
RMCI (26.77; +0.37): Also getting a handle on its volatility, holding at the 18 day MVA (25.20) and jumping Friday on rising, average volume (306K). New positions on a move over 28 on 500K or more.
UP & COMERS PORTFOLIOS: BBBY, SRCL
SRCL ($72.10; +0.60): Friday the stock held its ground but volume was lower and it is also just above its upper channel on its uptrend. That can indicate a pullback to near term support around 68, but the stock is moving well on good volume.
MEMBER PORTFOLIO: CSCO, SEBL, EMLX, BRCM, HDI, BRCD, BUD, AMGN, WMT, ORCL, HB, NOC
WMT (55.25; -1.40): It is not getting better for WMT as it closed below the 200 day MVA on rising, average volume. 56 and the 200 day MVA were support, and there is some more at 54. It needs to recover here.
BRCD (22.38; -1.07): Descending wedge with a floor at 21.60. Lower highs and a constant low over the last 2 months. Friday it was selling close to the breakdown point on rising, above average volume. On a break below 21.60 on continued rising volume, we will look at put positions.
Good Investing!
Jon L. Johnson and The Daily Staff
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 of 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.
|
yahoo stock
us stock market
|
