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us stock market, stock trading
Begin Part 2 of 3
Support and Resistance
Nasdaq: Closed at 1652.54
Resistance: The 18 day MVA at 1672.74. Then the February lows and recent top at 1696 to 1700. Then the second March down trendline at 1715. 1750 and the 50 day MVA are right behind that level.
Support: Some support from 1600 to 1620 from the October consolidation. 1550 to 1560 are the October lows and could try to hold. Then 1500. After that is the September low at 1387.06.
S&P 500: Closed at 1074.56
Resistance: The February lows at 1075 is where it closed. The down trendline at 1075 is right at that level. Double ice, but it could break it intraday. The 18 day MVA (1082.36) backs that up. Then the next down trendline at 1090, backed up by 1100 from price consolidations. 1125 is the serious resistance as that represents strong price points and the 200 day MVA (1122.86).
Support: The bottom of the downtrend channel held from Friday's close. The October lows at 1050 are the last price consolidation level before the September low. There is possible support at 1000, but it is not much. The September low is 944.75.
Dow: Closed at 10,109.66
Resistance: 10,100 continues to block the passage (50 day MVA at 10,120.70). After that, 10,200 to 10,300 holds the key to reaching toward the March high. 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 (9907.96) held again. Then recent lows at 9811. The bottom of the downtrend channel is at 9625. Then 9500 to 9600 in the shelf of support from 9500 to 10,100.
Weekly Economic Calendar (All times Eastern). The figures are the consensus expectations, not ours.
5-14-02
Retail Sales, April (8:30): 0.5% versus 0.1% prior
Retail Sales ex-auto, April (8:30): 0.4% versus 0.3% prior
5-15-02
CPI, April (8:30): 0.4% versus 0.3% prior
Core CPI, April (8:30): 0.2% verus 0.1% prior
Business Inventories, March (8:30): -0.1% versus -0.1% prior
Industrial Production, April (9:15): 0.4% versus 0.7% prior
Capacity Utilization, April (9:15): 75.7% versus 75.4% prior
5-16-02
Housing Starts, April (8:30): 1.63M versus 1.646M prior
Building Permits, April (8:30): NA versus 1.63M prior
Initial Claims, 5/11 (8:30): NA versus 411k prior
Philadelphia Fed, May (12:00): 11.0 versus 12.3 prior
5-17-02
Trade Balance, March (8:30): -$32.3B versus -$31.5B prior
Mich Sentiment-Prel., May (9:45): 93.0 versus 93.0 prior
TEAM TRADES
EPXE: After a strong run up the 18 day MVA, EXPE needed to test the 50 day MVA, and it did that last week, holding Friday just above the 50 day. Strong stocks in continuing uptrends test the 50 day MVA every so often, and we wanted to play EXPE's next move higher. It reported blowout earnings in April and shot higher on them. The 50 day MVA is a good add to point in a strong uptrend or a good point to get in on the action.
We were looking for the stock to show the move by hitting 74. It walked up to that point two times in the first two hours, but could not make the move over the near resistance. Then at 10:40 there was a good volume push and EXPE hit the buy point at 74. The spread was 2 to 3 cents, but by the time the alert was entered the ask was 74.03. We entered the order with a limit at the ask, and it looked as if the stock had jumped us when the bid hit 74.07, but then it quickly fell back to 74.03 for several trades before moving higher. It was a nice bounce, finishing over 76, and volume was not bad. We would have preferred stronger volume, but above average volume is never a bad thing.
THE PLAYS:
Good movers on the weekend report: ELBO, CLHB
Targets hit: NAV (37.75)
Stop Advisories: GTRC (18.50)
Best Plays:
1) ITN: Moving up in the handle.
2) HAR: Looking for a bounce.
3) CDI: Still holding support on low volume.
4) C: Bounced today, but setting up for another fall.
5) TXN: Ditto.
6) CACI: Stretching thin on the move up on lighter volume.
7) QFAB: Up on rising volume in the test.
8) IRM: Heading up in the ascending wedge.
9) RAH: Moving up from the 18 day MVA on stronger volume.
NEW PLAYS:
ITN (Intertan--$12.30; +0.22; optionable): Electronics Stores
http://biz.yahoo.com/p/i/itn.html
STATUS: Double bottom with handle. ITN moved up Monday in the extended (flat base) handle to the 20-month base that is part of a larger cup base. Overall the base shows good accumulation, 17 up weeks on rising volume against 6 down weeks on rising volume. Money flow is high right along with relative strength. The stock broke over the 200 day MVA in December to that month's high at 12.90, then commenced the current (handle) flat base. Volume Monday hit 104,100 (avg. 90,363).
BUY POINT: 13 on volume of 136K or higher. Target=16.50. Stop=11.75 (18 day MVA is at 12.01, currently).
POSITION: Stock and/or October 10c to buy (ITN JB; delta= 0.74).
http://www.investmenthouse.com/ct/itn.html
HAR (Harman--$58.25; +2.02; optionable): Electronic Equipment
http://biz.yahoo.com/p/h/har.html
STATUS: 18 day MVA bounce. HAR broke out of an ascending wedge in early March, tested back to the 18 day MVA and ran to the May closing high at 60.65, and now has pulled back again to the 18 day, ahead of another bounce from that support. Volume dropped below average Friday on a slip below that support, but Monday the stock was back up on rising volume (316,300; avg. 193K), crossing over the short term MVAs after testing support in the 55 range (intraday low was 55.45). Looking for the bounce; money flow is heading back up and relative strength is high. Typically gives a $5-$6 move since the wedge breakout.
BUY POINT: Aggressive: 58.55 on continued rising volume. Target=64. Stop=55.35
POSITION: Stock and/or October 55c to buy (HAR JK; delta= 71).
http://www.investmenthouse.com/ct/har.html
Upside:
ABF (Airborne Freight--$22.54; +0.37; optionable): Air & Freight
http://biz.yahoo.com/p/a/abf.html
STATUS: Breakout. Formed the 8-week cup with handle after an ascending wedge breakout in late February and bounce above resistance Friday on strong volume, breaking out of the handle. The stock gapped higher Monday but volume dropped back to 935,200 (avg. 633K) and the stock closed below the opening price though it posted the gain on the day. Remains a buy on the breakout up to 23.08 if it can hold near the low (22.33) or Friday's closing price at 22.17. High money flow and relative strength continue. Buy point in the handle was 21.98.
BUY POINT: A hold for buys at 22.23, looking for rising volume on a move back up. A buy to 23.08 on the breakout. Target=25.75. Stop=20.67.
POSITION: Stock and/or August 20c to buy (ABF HD; delta= 0.72).
http://www.investmenthouse.com/ct/abf.html
BDK (Black & Decker--$49.23; -0.48; optionable): Small tools
http://biz.yahoo.com/p/b/bdk.html
STATUS: Cup with handle. Gave a volume spike in the handle on Friday, but volume fell back below average Monday (536,600; avg. 779K) and the stock price pulled back as well, holding above the 18 day MVA (48.77). The base formed after BDK broke out of a double bottom with handle in February, when it ran to the prior highs in the new base that are just under 50. The cup shows good accumulation (3 up weeks on stronger volume to zero down weeks on stronger volume), and money flow remains at high levels and just ahead of price. Continue to look for a breakout.
BUY POINT: 50.60 on volume of 1.16 million or higher. Target=58. Stop=48.50
POSITION: Stock and/or August 45c to buy (BDK HI; delta=0.77).
http://www.investmenthouse.com/ct/bdk.html
EXPE (Expedia--$76.26; +3.76; optionable): Internet software
http://biz.yahoo.com/p/e/expe.html
STATUS: 50 day MVA bounce. Gave the move we were looking for as the techs rallied back today, but as with many of those tech stocks, volume for EXPE was lower, down to 17.9 million (avg. 1.25 million) on the bounce. Closing just under resistance at the 18 day MVA (76.77), the lower volume could prevent EXPE from breaking through right away, but we are looking for that to happen for a run to our initial target at 84. The stock corrected back to the 50 day MVA ending Friday, after a strong run up the 18 day MVA to the recent high at the target.
BUY POINT: A hold for buys at 74. New buy point over 77 on rising, strong volume. Target=84. Stop=72
POSITION: Stock and/or October 65c to buy (UED JM; delta= 72).
http://www.investmenthouse.com/ct/expe.html
CDI (Cdi Corp--$29.60; +0.40; no options): Staffing and outsourcing
http://biz.yahoo.com/p/c/cdi.html
STATUS: Flag. Threw a flag in April and is pulling back in another, volume falling and the stock finding support at the 10 day MVA (29.06), showing its fourth consecutive doji at that support (from where CDI flew up on the last flag breakout). Volume remains below average and just lower than that of Friday (to 41,400; avg. 49K), so continue to look for this support to bounce the stock back up on another breakout. CDI shows a strong uptrend since December of 2000 but after testing the 50 day MVA in early April, is preparing for its second bounce. Is a thinly traded stock, but in a sector that performs well in a recovering economy (temp hiring before full-time hiring starts). High money flow and relative strength.
BUY POINT: Aggressive: 30 on volume of 50K or higher. Target=34.75. Stop=28
POSITION: Stock.
http://www.investmenthouse.com/ct/cdi.html
SGR (Shaw Group--$33.35; +0.10; optionable): Industrial equipment
http://biz.yahoo.com/p/s/sgr.html
STATUS: Ascending wedge. In a large base dating from a year ago, but most recently SGR flew back over its 200 day MVA (in April) to complete a more recent, 7-month cup base. After reaching the April high at the upper right side, 33.79, the stock sold back to the 50 day MVA but bounced back, forming an ascending wedge as a test of the strong breakout over the 200 day. Resistance at the 34 level is holding the stock back, and low volume Monday didn't help (486K; avg. 632K) and SGR showed a tight doji on the slight gain. As noted over the weekend, we'll look for another dip back to the 10 day MVA (32), then a bounce back and breakout from the pattern. Relative strength is high. Focusing on options for the move.
BUY POINT: 34.32 on continued strong volume. Target=40.75. Stop=31.85.
POSITION: Stock and/or October 30c to buy (SGR JF; delta=70).
http://www.investmenthouse.com/ct/sgr.html
Downside:
Puts:
C (Citigroup--$43.30; -1.03; optionable): Banks
http://biz.yahoo.com/p/c/c.html
STATUS: Put, head and shoulders. C peaked in the head of the pattern in March at the 50 level, and Friday headed down from the top of the right shoulder on strong volume (14.3 million; avg. 12.8 million) in what looks like the start of a breakdown. Sold down Friday but Monday bounced back as financials had a good day; however, C closed below the 18 day MVA (44.52) on slightly down volume at 13.7 million; average is 13 million. Still looking for the breakdown after this bounce is over. Neckline is just above 42.
BUY POINT: 42 on continued rising volume (16 million or higher). Target=36 (initial); below that, 34. Stop=44
POSITION: June 47.50p to buy (C RW; delta= -0.71).
http://www.investmenthouse.com/ct/c.html
DHR (Danaher--$69.38; -0.51; optionable): Building materials
http://biz.yahoo.com/p/d/dhr.html
STATUS: Put, double top. The stock almost double topped (the March high, 74.14, is not quite at the level of the April high, 75.33), but DHR has been having trouble staying above its 50 day MVA, and slid below Friday for the second time last week. Monday the stock slid through the buy point at 69.10 then bounced back up to close just above it; volume was higher at 987,600 (avg. 1.13m). Since it remains below the 50 day which is at 70.54 and we anticipate today's market bounce to peter out, we'll continue to look for the breakdown to the initial target at 63. Below that: 200 day MVA at 61.50. DHR might make it back to the 50 day MVA, but it pulled off a high at 69.74, tapping at some resistance just under 70 before closing lower.
BUY POINT: A hold for buys at 69.10. Target=63 (initial); 200 day MVA at 61.50 is lower target. Stop=71.75
POSITION: June 75p to buy (DHR RO; delta -0.76, 38 OI)
http://www.investmenthouse.com/ct/dhr.html
HLT (Hilton Hotels--$14.78; +0.35; optionable): Lodging
http://biz.yahoo.com/p/h/hlt.html
STATUS: Put. HLT broke its 18 day MVA Thursday, then Friday the 50 day MVA, moving through that support on high volume. It bounced back in Monday's trading, though lower volume didn't allow a hold at the high of 15.20 (the 10 day MVA is at 15.34) and closed just above the breached support (volume sank to 1.4m; avg. 2m). Will see if it holds here or falls back through; if so, we will look for it to try and test the 50 day MVA for a kiss good-bye. Initial target on the move is 12; 200 day MVA is at 11.67.
BUY POINT: 14.35 on continued strong volume. Target=12. Stop=15.80
POSITION: July 17.50p to buy (HLT SW; delta= -0.73, 40 OI).
http://www.investmenthouse.com/ct/hlt.html
BGG (Briggs & Stratton--$39.67; -0.13; optionable): Machinery
http://biz.yahoo.com/p/b/bgg.html
STATUS: Head and shoulders (put, kiss good-bye). Peaked in the right shoulder at the 42 range then sold below the 200 day Friday (Monday at 40.44) on strong volume. It fell Monday to a low at 38.75, hitting the buy point, then bounced back up to close with a tight hammer doji. Now BGG is set up to test the 200 day MVA and can still make the fall.
BUY POINT: A hold for buys at 39.40, looking for a move back down when it hits the 40.44 range. We want continued rising volume on the move. Target=35 (initial); below that, 33. Stop=42
POSITION: July 45p to buy (BGG SI; delta= -0.78, 0 OI).
http://www.investmenthouse.com/ct/bgg.html
TXN (Texas Instruments--$30.27; +1.57; optionable): Semiconductor
http://biz.yahoo.com/p/t/txn.html
STATUS: Put. TXN was been struggling to hold a move back over its 200 day MVA since November, and was looking better in March on a strong break over that resistance, marking this year's high at 35.71. It has trended back down since that time, however, first breaking its 50 day MVA and then early this month falling back through the 200 day, volume unsupportive after TXN hit the March high. In today's market bounce the stock was back up to resistance (the 18 day MVA, 30.34), and the lower volume is setting it up for the move down we're looking for. Target is the October low at 22.75; the September lows are at 20. Volume was lower Monday at 7.35m (avg. 9.8m).
BUY POINT: 28.50 on stronger volume. Target=22.75 (initial) Stop=30.
POSITION: July 35p to buy (TXN SG; delta= -0.70).
http://www.investmenthouse.com/ct/txn.html
ELBO (Electronics Boutique--$28.90; -1.79; optionable): Electronics stores
http://biz.yahoo.com/p/e/elbo.html
STATUS: Put. Made the move Monday, volume blasting above average to 692,800 (avg. 385K) and the stock breaking the 18 day MVA support. ELBO has been in a downtrend since late December, and after moving up to test the resistance that's been sending it lower (50 day MVA, now at the 32 range), we were looking for the downward momentum to continue. This is a good start.
BUY POINT: A hold for buys at 30.30. Target=26. Stop=32.50
POSITION: July 40p to buy (LQB SH; delta= -0.77, 0 OI).
http://www.investmenthouse.com/ct/elbo.html
BZH (Beazer Homes--$83.18; -4.82; optionable): Residential construction
http://biz.yahoo.com/p/b/bzh.html
STATUS: Put, kiss good-bye. Homebuilders did not have a good day Monday, but BZH managed to hold together enough for a move back over its 50 day MVA (now at 83.88), volume rising to 512K (avg. 524K). We were looking for the stock to move up to test the 50 day, but now will have to see if it can move higher from here, or fall back through. It made the downside buy point of 82.95 in today's trading and then bounced back through the stop advisory at 84.50, so that is adjusted. Can hold for a test of the 18 day MVA 86.17), or close on a continued move up from here. There is an up trendline at 78; support below that is at the 75 range.
BUY POINT: A potential hold for buys at 82.95 for a test of the 18 day MVA.
Put Target=78 (initial). Stop=86.50
POSITION: June 90p to buy (BZH RR; delta= -0.74, 53 OI).
http://www.investmenthouse.com/ct/bzh.html
VMC (Vulcan Materials--$46.71; +0.28; optionable): Building materials
http://biz.yahoo.com/p/v/vmc.html
STATUS: Put. VMC is in the right shoulder of a head and shoulders pattern that has a neckline at 46; on low volume for the last several days the stock is hanging around its 200 day MVA (46.59), just crossing back over that resistance Monday (at 46.59) even though volume was lower to 106,900 (avg. 185K). The 18 day MVA is at 46.93, the 50 day MVA at 47.22, so there is resistance ahead that is below the peak in the left shoulder (47.70). Will continue to look for the breakdown on a move below the neckline on strong volume. The pattern peaked in April near 50.
BUY POINT: 45.90 on volume in the range of 250K or higher. Target=41.50. Stop=47.50
POSITION: June 55p to buy (VMC RK; delta= -0.91).
http://www.investmenthouse.com/ct/vmc.html
CTX (Centex--$52.93; -2.57; optionable): Residential construction
http://biz.yahoo.com/p/c/ctx.html
STATUS: Put. CTX has experienced strength with its sector since September, breaking from a reverse head & shoulders and rising 35%. However, the sector could be weakening, and CTX fell through its 50 day MVA Friday on stronger volume. Monday the stock opened below the by point of 53.50 (high was 53.25) and headed to a low of 50.70 before bouncing back up. Volume flew up to 2.6m (avg. 1.2m), helping bounce the stock back up toward Friday's closing price at 52.93. CTX can move back up to try a test of the 55 range if it can get back over 53, but from here is a hold for a move down to the initial target at the 200 day MVA (48.47).
BUY POINT: A hold for put buys at 53.50. Target=49 (initial). Stop=56.50
POSITION: July $60 puts to buy (CTX SL).
http://www.investmenthouse.com/ct/ctx.html
ACF (Americredit--$37.83; +1.14; optionable): Credit services
http://biz.yahoo.com/p/a/acf.html
STATUS: Put. Another head and shoulders and Friday ACF broke the 50 day MVA Friday on rising volume but was back over that broken support Monday, just barely (it is at 37.80, just cents below the closing price). Volume was lower at 2m (avg. 2.3m) on the move, and there is resistance ahead at the 10 day MVA (38.96) and the 18 day MVA at 40. ACF tapped near the former on the high of 38.57 before pulling back down to the support. We will continue to look for the breakdown; financials had a good day today so that helped.
BUY POINT: Aggressive: 36 on volume of 3 million or higher. Target= 26. Stop=38
POSITION: June 45p to buy (ACF RI; delta= -1.00, low OI).
http://www.investmenthouse.com/ct/acf.html
End Part 2 of 3
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us stock market
stock trading
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