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us stock market, stock watch
Begin Part 2 of 3
Support and Resistance
Nasdaq: Closed at 1725.56
Resistance: The second March down trendline has not been completely broken (1705). The simple 50 day MVA at 1771.17. The January/March 2002 down trendline at 1790 and the 200 day MVA at 1823.91.
Support: 1700 is some support (recent lows and highs) and where we want it to hold. 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 1091.07
Resistance: Still at the second March down trendline at 1090. After that is 1100 from price consolidations. 1125 is the serious resistance as that represents strong price points and the 200 day MVA (1121.99).
Support: February lows at 1074. 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 10,243.68
Resistance: The January/September 2000 down trendline at 10,290. 10,300 is the next level that 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: 10,100. Then the 200 day MVA (9907.34). After that two lows at 9811. 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): 1.2% actual versus 0.7% expected (revised from 0.5%)
Retail Sales ex-auto, April (8:30): 1.0% actual versus 0.4% expected
5-15-02
CPI, April (8:30): 0.5% actual versus 0.4% expected and 0.3% prior
Core CPI, April (8:30): 0.3% actual versus 0.2% expected and 0.1% prior
Business Inventories, March (8:30): -0.3% actual versus -0.1% expected and -0.1% prior
Industrial Production, April (9:15): 0.4% actual versus 0.4% expected and 0.4% prior (revised from 0.7%)
Capacity Utilization, April (9:15): 75.5% actual versus 75.7% expected and 75.3% prior (revised from 75.4%).
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
PCLE: We had our eye on PCLE for quite some time. It was forming a nice cup pattern all year and tried to breakout in late April. It was not ready and collapsed back down with the market. It formed up again right away, however, and worked through a nice, lateral low volume handle in early May. Tuesday it started to move higher, gapping up with the market and showing above average volume. That had us looking for the move today, and today it made the breakout move. Our buy point was at 10.27 to clear the intraday high in the handle; that is the buy point on these patterns. It did not take long into the session before it hit the buy point. It was up almost 65 cents before it hit our buy point; that does not concern us when looking at breakouts. The key is hitting the buy point and on strong volume for the session. At just after 9:30 when it hit the buy point, volume was running over 80% of average. That indicated it was easily going to hit the target volume for the session, so we had no hesitation in taking positions. The spread was all over the map from a penny to 14 cents with the trading on the stock as there were many buyers. We issued the alert and then went about putting in a limit order given the wide ranging bids and asks. We put in the limit at 10.29 and after several sell side trades a fill was at 10.27. The continued its strong move up for the next half hour, but then topped out near 10.60 for the rest of the session, somewhat perplexing, but very good in that it did not give back its gains. A strong move, and we can even add more positions from here.
THE PLAYS:
Good movers: EXPE has been on the move! PCLE gave a nice breakout!
Best Plays:
1) TEVA: Broke resistance on stronger volume.
2) ROOM: Looks weak.
3) CDI: Holding above support on low volume.
4) CTX: Ditto.
5) PCLE: Still a buy on the breakout!
6) IRM: Heading up again!
7) GMP: A test of support on low volume.
NEW PLAYS:
TEVA (Teva Pharm--$61.85; +1.85; optionable): Drug manufacturer
http://biz.yahoo.com/p/t/teva.html
STATUS: Break of resistance. TEVA moved through its 200 day MVA Wednesday (at 61.11) on a rise in volume to 852,100 (avg. 925K), after the stock tested a nice run from 54. That run moved TEVA through the lower 50 day MVA, then the stock tested back to the 10 day MVA ahead of today's move. TEVA beat the previous May high (62) on the intraday high of 62.04, pulling back from it slightly to close. We can look at entering with potential positions on a move over today's high with volume moving above average, or look for a test of the 200 day MVA first, depending upon (perhaps) what the Nasdaq does. TEVA is off the lows around 52 in its large base, and we're interested in making money as it moves up the right side (prior highs at 73). The stock is showing uptrending money flow, and relative strength is ahead of price.
BUY POINT: 62.10 on volume in the range of 1 million or higher. Target=67 (initial). Stop=60.50
POSITION: Stock and/or September 55c to buy (TVQ IK; delta=0.79).
http://www.investmenthouse.com/ct/teva.html
New Put:
ROOM (Hotel Reservation--$53.97; -0.73; optionable): Lodging
http://biz.yahoo.com/p/r/room.html
STATUS: Put. Fell below the 50 day MVA over a week ago on the hotel price wars news. ROOM hasn't recovered, moving up to the 10 day MVA in Tuesday's rally but unable to move higher; the 50 day MVA is at 58. Volume is low, but higher Wednesday at 748K (avg. 779K) on the move back down after another tap at the 10 day. For an aggressive play, we are looking for a move down from here for a drop to 45, at the 200 day MVA. Money flow has fallen to the floor.
BUY POINT: Aggressive: 53 on volume in the range of 800K or higher. Target=45. Stop=56.50
POSITION: October 65p to buy (URD VM; delta= -0.71).
http://www.investmenthouse.com/ct/room.html
From Tuesday's update report:
GNSS (Genesis Microchip--$27.76; +0.14; optionable): Semiconductor.
http://biz.yahoo.com/p/g/gnss.html
STATUS: Break of resistance. GNSS is working on its big base, and is another stock we are looking at for making gains as it moves back up to its previous highs (73 range). It broke above its 50 day MVA Tuesday in the rally, and while it didn't post another big gain Wednesday, it did hold the support. Volume was higher at 6.3m (avg. 4m) as the buyers and sellers battled it out, but the hold at the 50 day is encouraging. Doesn't have much room to test back (the 50 day MVA is at 27.24) to support, but it certainly can.
BUY POINT: A hold for buys at 28.10, looking for strong volume on a move up from here or the 50 day MVA. Target=34 Stop=26.90
POSITION: Stock and/or September $25 calls to buy (QFE IE; delta= 0.69).
http://www.investmenthouse.com/ct/gnss.html
GMRK (Gulfmark Offshore--$43.25; -1.10; no options): Oil and gas
http://biz.yahoo.com/p/g/gmrk.html
STATUS: MVA bounce. After moving back over the 18 day MVA on Tuesday, GMRK slid back below that support today, volume sharply lower at 29,900 (avg. 58K). The stock had been in a test of a cup with handle breakout, and Monday tested down close to its 50 day MVA (now at 40). Potential support is at the 42.50 range, level from which the stock bounced back up yesterday. We will see if it catches there again for another try; the low volume suggests that it can. Would not like to see another test back to the Monday low (41).
BUY POINT: Aggressive: 44.60 on rising volume (150K or better). Target=55. Stop=42
POSITION: Stock.
http://www.investmenthouse.com/ct/gmrk.html
SKS (Saks Holdings--$15.48; +0.01; optionable): Department stores
http://biz.yahoo.com/p/s/sks.html
STATUS: Test of breakout. Broke out of a cup with handle base in late April and tested the move on a pullback to the 18 day MVA, level from which Tuesday SKS broke out on strong volume. However, as volume slacked back to 515,800 today (avg. 370K), the stock held with a tight doji and the little gain. It can certainly head up from here with another infusion of volume; if not, look for a test of 15 (10 day MVA). This is SKS' second bounce from the 18 day. Money flow and relative strength breaking out; the base from which the stock broke out shows good accumulation.
BUY POINT: 15.60 on continued strong volume. Target=21. Stop=14.50
POSITION: Stock and/or August 12.50c to buy (SKS HV; delta=0.76). We will be focusing on using options to leverage the move.
http://www.investmenthouse.com/ct/sks.html
Monday:
ITN (Intertan--$13.00; +0.10; optionable): Electronics Stores
http://biz.yahoo.com/p/i/itn.html
STATUS: Double bottom with handle. Closed at the buy point for a breakout from the pattern, but with volume screaming to 860K (avg. 95K), ITN could not get over that resistance. Indeed, the stock on the high of 13.13 tapped just above the down trendline that marks the Sept 2000/May 2001 closing highs. This extended handle (a flat base) will likely see a pullback, which can form a handle to what can become a saucer base. It shows good accumulation, and money flow with relative strength is breaking out ahead of the stock.
BUY POINT: A hold for buys at 13. 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--$58.20; -0.77; optionable): Electronic Equipment
http://biz.yahoo.com/p/h/har.html
STATUS: 18 day MVA bounce. Made the bounce Monday but hasn't moved much as volume fell back right away (lower Wednesday at 224K, avg. 193K). The stock continues to hold the 18 day MVA, tapped on the low at 57.35, so we'll continue to watch for the bounce. Looking for a $5-$6 move when that occurs.
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 (from weekend report):
ABF (Airborne Freight--$23.05; +0.15; optionable): Air & Freight
http://biz.yahoo.com/p/a/abf.html
STATUS: Breakout. Broke out Monday from an 8-week cup with handle and has held above its buy point (22.23) as volume falls back below average (was down Wednesday to 439,200; avg. 633K). The stock has inched higher but with the low volume just hasn't got what it needs to extend the breakout. Can't keep this up, so can move back to a test of the 22 range if it doesn't pull in the volume from here. 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 (reached 23.34 on the intraday high). 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--$49.46; -0.47; optionable): Small tools
http://biz.yahoo.com/p/b/bdk.html
STATUS: Cup with handle. Remains in the handle and holding above support, the 10 day MVA (49.36). Volume spiked up again today (Friday as well) to 874K (avg. 775K) on the pullback, and while we like the hold above the 18 day, a move down on rising volume is not good price/volume action. We will continue to look for the upside move; the 18 day MVA is lower at 48.95. Money flow remains high.
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--$81.03; +1.33; optionable): Internet software
http://biz.yahoo.com/p/e/expe.html
STATUS: 50 day MVA bounce. Liked the move over the 18 day MVA Tuesday, and EXPE continued the move today as volume gave a surge to 2.1m (avg. 1.3m). The stock has run for four days, but for the last 2 has tested the 18 day MVA on the lows (77.49), so we think it still has some steam to continue this bounce. The May high is at 84.03 so that can pose some resistance and thus is the initial target, but ultimately we are looking for EXPE to run well above that.
BUY POINT: A hold for buys at 74 and 77. 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--$29.10; -0.61; 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, and until today was using the 10 day MVA for support (for about a week). Volume slide down to 43,400 (avg. 49K) but one thing remained consistent: the stock tested down to just above its 18 day MVA (the low was 28.88), just as it has done the last 4 consecutive days. It can test down to the 18 day before making the upside breakout from the flag. After testing the 50 day MVA in early April, the stock is ready for its second bounce. High money flow.
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--$35.15; +0.86; optionable): Industrial equipment
http://biz.yahoo.com/p/s/sgr.html
STATUS: Ascending wedge. Hit the buy point (34.32) Tuesday on a volume surge, then Wednesday put in another gain on the breakout though volume fell back a little to 786,100 (avg. 617K). Remains a buy on the breakout to 36.03, if it can pull in higher volume on the move (needs 833K to meet minimum required volume for the breakout). The ascending wedge is part of a large base, and was formed on a strong breakout over the 200 day MVA mid-April. SGR never did pull back to the 10 day MVA before this breakout, as we thought it might.
BUY POINT: A hold for positions, if taken, at 34.32. Still a buy but needs higher volume as noted above. 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
End Part 2 of 3
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us stock market
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