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yahoo stock, us stock market
Begin Part 2 of 2
TOMORROW
April retail sales are out before the open, and these are one of the 'meat' economic reports as they give insight as to the one area that has held the economy up, the consumer. Sales have been flagging recently after a good start to the year. A bit of a downside surprise may put some brakes on the Monday hope rally even ahead of the AMAT numbers. If retail is a letdown, we do not anticipate this weak bounce to last much longer. If it is inline, then we get a rise up toward the AMAT numbers.
The big point will be AMAT's actual numbers and how positive it is about the future. It has to be positive and not just another 'this looks like the bottom' pronouncement that has hampered semiconductors and the rest of tech for the last three quarters. There are signs such as INTC keeping its investment decent and AMD increasing its equipment expenditures, but these did not get the market excited in the past couple of months. After CSCO's questionable news, however, it is a market in search of a catalyst. The indexes are all trying to put in some higher lows to attempt to change character. If they can put together a higher volume rally and take out near resistance, we will have to close out some downside positions, but we are not going to run out of them just yet.
What we anticipate is a move up to next resistance ahead of AMAT if the retail numbers don't get in the way of the move. Then the indexes are primed to fall if there is no volume and no major headlines from AMAT. Two up sessions then more selling; that is about the norm for a downtrend, but the indexes are putting in those higher lows. They are going to try and rally, and how they react to next resistance is the key.
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:
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.
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 the weekend report:
TSN: Cup with handle. Made the move, hitting the buy point on rising volume (needs to pump up, though).
HNT: 18 day MVA bounce. Went the other way, falling to a short term up trendline and bouncing back up. Still closed below the resistance, however.
USTR: Put (double top). Lower volume and a bounce with the market, but closed below resistance (50 day MVA).
ACN: Put (continuing downtrend). Another lower volume move higher. Closed above the 10 day MVA but continues to look weak.
Stop Advisories: HTRN (13.25), HUM (15.25)
Continued Plays:
ADBE: Another nice bounce from ADBE; not as good as last week's but showing the right price/volume action. Still a suspect market bounce, and as the market goes, so do 75% of stocks.
AMI: Bounced up from the 10 day MVA support in the cup with handle breakout test. Volume was strong but AMI pulled well off the intraday high of 4.65. Still looks pretty good if it continues to hold this range.
AXP: Recovered back over the 18 day MVA and bounced as the financials enjoyed the day. Volume higher.
CAO: Showing a tight doji in the pullback to the 18 day MVA on low volume. Broke the 10 day on Friday but looks much better today, having completed the test.
CLF: Test breakout. Back over the 18 day MVA, support in the test. Volume still below average.
FRED: Just didn't perform as expected, falling to the 50 day MVA on today's low. Showed a doji so can head back up, but will encounter resistance at 38.
GSB: Cup with handle. Moving from the 18 day MVA but needs stronger volume to continue climbing.
KEY: Tested back to the 18 day MVA after the late April bounce from that support. Strong volume spike Monday on the hold there.
NUE: Still holding under the 50 day MVA and looks ripe for the fall (put).
RPM: Tight in the handle to the cup base, as it has been for several days now on low volume.
SRZ: Back over resistance, the 200 and 18 day MVAs, and on good volume too. Has not hit buy point for put play, and may not after this positive move.
TENT: Bounced from the 10 day MVA Monday on rising volume.
TYL: Good bounce from the 50 day MVA; would like to see stronger volume.
VWKS: Tested its recent late April breakout in a tightening pattern above the 18 day MVA.
WM: Still looks good in the cup with handle.
Best Plays:
1) USAP: At support and ready to bounce.
2) HMC: Ready for a move up in the handle.
3) LDG: Ditto.
4) NOC: Bouncing.
New plays:
USAP (Universal Stain & Alloy--$14.90; +0.05; no options): Steel & Iron
http://biz.yahoo.com/p/u/usap.html
STATUS: 18 day MVA bounce. USAP gave a recent strong bounce from the 18 day MVA and has pulled back to test the move on decreasing volume (down Monday to a very low 10,100; avg. 106,272). That is a very low volume shakeout, and we are looking for another bounce; the last run tucked away over $4. This will be USAP's second run off this support level since it broke out of a cup base in March and tested back to the 18 day for the first time mid-April. Money flow is high and ahead of price, which is a bullish signal, and relative strength is high as well.
BUY POINT: Aggressive: 15.20 on volume of 100K or higher. Target=19. Stop=14.14 (7% below buy point).
POSITION: Stock.
http://www.investmenthouse.com/cd/usap.html
HMC (Honda Motor Co--$22.90; +0.20; optionable): Auto Manufacturers
http://biz.yahoo.com/p/h/hmc.html
STATUS: Cup with handle. This 9-month base is showing good accumulation, 12 up weeks on rising volume versus 6 down weeks on rising volume, and money flow and relative strength are just ahead of price. Currently HMC is pulled back to the 18 day MVA in a handle (that support is at 22.51). Volume was higher Monday at 204,600, well above the average of 142K, giving the stock a boost on the small move from the moving average. HMC reached the handle high at 23.65 on a run off the 50 day MVA and after such, the 18 day MVA is a natural support level for a pullback. Looking for a breakout!
BUY POINT: 23.76 on volume of 213K or higher. Target=29. Stop=22.20
POSITION: Stock and/or October 20c to buy (HMC JD).
http://www.investmenthouse.com/cd/hmc.html
LDG (Longs Drugs--$30.45; +0.52; optionable): Drug Stores
http://biz.yahoo.com/p/l/ldg.html
STATUS: Cup with handle. Another stock ready to make another bounce, LDG has pulled back to its 18 day MVA in the handle to a 14-month base, prior highs at 32. The stock moved up from support at the 30 range on rising volume Monday (251,300; avg. 216K), and with the high money flow and relative strength, plus good accumulation in the base (16 up weeks versus 8 down weeks, all on rising volume), we are looking for a breakout. Retail sales for April are out tomorrow; LDG reported its numbers last week and they were up. The stock put in a great run over the last three months.
BUY POINT: 31.52 on volume of 324K or higher. Target=37.80. Stop=29.60
POSITION: Stock and/or August 25c to buy (LDG HE; delta= 0.81).
http://www.investmenthouse.com/cd/ldg.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, and JNC.
RMCI (27.77; +0.31): Popped higher in the ascending wedge-type pattern, still fighting resistance at the 28 range. Volume keeps shrinking, however, as this pattern tightens up. Can pull back again to the 10 day MVA, tested on the low at 27.05.
JNC (59.76; +1.16): Popped up, moving off its 10 day MVA (58.50) but volume was low. However, if that picks up this move over the last closing high resistance (at 59.70) could continue higher.
DGX (92.00; -1.93): We noted on the weekend report that DGX may be tiring, and the stock tested just under its 18 day MVA in today's action. Volume was higher and it recovered back over, but remains below the 10 day MVA. Has had trouble the last several days with resistance at 96.
UP & COMERS PORTFOLIOS: BBBY, SRCL
BBBY (34.80; +0.27): Held the 50 day MVA after moving just under it Friday. Volume was lower so we'll look for a hold; still in an iffy position here.
SRCL (72.42; +1.91): Held its ground at the 18 day MVA, bouncing from there Monday on a little rise in volume (still below average). Looks like it is going to try to hold here for the test of the recent run off of the same support back in late April.
MEMBER PORTFOLIO: CSCO, SEBL, EMLX, BRCM, HDI, BRCD, BUD, AMGN, WMT, ORCL, HB, NOC
NOC (Northrop Grumman--$124.51; +3.77; optionable): Aerospace/Defense
http://biz.yahoo.com/p/n/noc.html
STATUS: 18 day MVA bounce. NOC popped up Monday on rising volume (1.5m; avg. 1.48m), closing just under the earlier May closing high at 124.68. Still, it was solid move on the higher volume, and after the April test of the 50 day MVA, the stock is ready for a bounce from the 18 day. News was out that the company will head a team funded by the U.S. post office to evaluate the use of DNA-based technology for possible protection against biological hazards. Relative strength is high; look for continued rising volume on the move for new or additional positions.
BUY POINT: 125 on continued strong volume (2m or higher). Target=135. Stop=119
POSITION: Stock and/or August 115c to buy ( (NOC HC; delta=0.75).
http://www.investmenthouse.com/cd/noc.html
CSCO (15.70; +0.28): With the exceptions of EMLX, BRCD and BRCM, the techs in the portfolio were up on lower volume, and all are below resistance levels. CSCO moved back over its 50 day MVA (15.53) but has its 200 day ahead at 17. Volume too was lower, but at average (strong). Might bounce up to the resistance, but that could just set it up for a fall.
WMT (55.04; +1.38): Announces quarterly sales Tuesday; the stock bounced up toward its 200 day MVA (just over 55) Monday but volume was lower, indicating a set-up for a move back down. The stock was trading slightly higher after hours trading; if numbers are good we'd like to see a move over this major resistance.
BUD (50.64; -0.48): Not giving us the quick move back over the 50 day MVA which the stock broke below on Friday. It was down again (just under a half-point) Monday but volume was higher and above average. Lower support can emerge at the 50 range, but BUD closed right at an up trendline that connects the October and January closing lows. A bounce back and move over the moving average (at 51.44) would be preferable, but the higher volume is not encouraging.
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.
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