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us stock market, trade stock
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8/18/03 Investment House Daily
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Investment House Daily Subscribers:
MARKET ALERTS:
Target hit alerts issued Monday: None issued
Buy alerts issued: FARO; CY; NSM; INTC (kept an eye on it and issued the alert)
Trailing stop alerts: None issued
Stop alerts: None issued
The market alert service is a premium level service where we issue intraday alerts relating to the general market conditions, when stocks hit action points (buy, stop, target, etc.), and when we see other information impacting the market or our stocks. To subscribe to the Daily alert service you can sign up at the following link:
http://www.investmenthouse.com/alertdly.htm
SUMMARY:
- Market does not wait any longer, breaks higher on solid retail numbers and relief the power is back on and no major shutdowns.
- Market volume was modest but SOX, individual stocks break higher on strong trade.
DJ30 breaks higher from its range as sectors rally across the board.
Stocks wasted no time making the most of the power being turned back on. They were up out of the gates. Nasdaq rallied all session right up to the close. DJ30 broke out from its range, but after running higher to lunch, it stalled and moved laterally for the remainder of the day. SOX was impressive, turning the 50 day MVA breach 7 sessions back into a breakout of its range.
It is hard to pinpoint a catalyst though WMT's upbeat August sales report and LOW's earnings had the retail sector snapping to. An upgrade of some chip stocks helped that area, particularly when a long term bear turned positive on chip maker AMD. There was enough good news along with relief that the power interruption was, while serious, not nearly the event many news channels made it out to be. Certainly other areas of the country have been without power for longer and in more severe conditions. It was very interesting to see WMT talk of meeting the high end of its plan for August even with 200 stores closed for the blackout. The market had been consolidating, shook out quite a few sellers two weeks back, and then got some catalysts to merge and send it higher.
THE MARKET
In the weekend report we said we remained overall bullish, but we were skeptical if it could make the breakout. DJ30 did not wait a few more days but was up early, breaking out. SOX broke out. The SP600 and Russell 2000 broke out as well. The only big indexes not breaking out if their ranges were Nasdaq and SP500, and they had very nice sessions themselves.
Volume was up but was still low overall. Nasdaq volume was the best in over a week while SP500 was lower than even the pre-Friday sessions. You want to see overall volume racing higher to confirm that the buyers are getting back in deep and won't be gone tomorrow. As one floor trader put it, however, low volume does not mean the move is wrong, just that not everyone is in on it. There were many good individual volume moves, however, as some 'old' leaders shot higher (e.g., TSCO, chips) and some new blood started to stir as well. As we have noted over the past two weeks, leaders start to lead ahead of the rest of the market. We saw them stirring last week and many were moving on strong volume Monday while the rest of the market was still getting started. It is a very good sign when the leaders start making the breakouts on volume as the market likes to play follow the leader.
If this rally continues that puts the market in an interesting situation heading into September as stocks will have rallied into a month that is historically the worst for the market. Stocks did not move lower from the top of their recent ranges but made the move higher. As leaders were making breaks higher on volume we started moving into positions; it would have been nice for Nasdaq et al to move laterally to the end of the month and into September and then break higher, but if leadership quality stocks start making their moves we have to put aside our individual beliefs as to the exact timing and act. What we got Monday was a nice volume break higher by many leadership stocks on the report, and that was a cue to continue to take positions as we have been doing.
Market Sentiment
VIX: 19.28; -0.92. Back below 20 once again, a move below the 'normal' range of 20 to 30. This is something to keep an eye on but VIX is usually a better indicator at higher levels or extremes to the upside in volatility. Many times in the past it has traded into the teens even as the market rallied higher and higher. Then volatility started to rise as the market continues its rise. Volatility then hit high levels when the upside move was over (e.g., the October 1999 to March 2000 run). With good stocks breaking higher Monday on volume we are not getting bent out of shape over the VIX' drop below 20.
VXN: 26.62; -2.59
Put/Call Ratio (CBOE): 0.72; +0.19. Rising on an upside session as shorts form last week sold their put positions.
NASDAQ
Trying to break up that toppish pattern, rallying back to the late July highs on stronger volume.
Stats: +37.48 points (+2.2%) to close at 1739.49
Volume: 1.487B (+110.97%). Volume was up, and though still well below average, it was higher than the prior week, indicating that more buyers were moving into the action. Not a tidal wave of buyers, but more.
Up Volume: 1.287B (+1.001B)
Down Volume: 181M (-216M)
A/D and Hi/Lo: Advancers led 2.07 to 1. Nice finish put the A/D line at a solid 2:1.
Previous Session: Advancers led 1 to 1
New Highs: 249 (+103). New highs surging on the session even as last week saw very few new lows on the selling.
New Lows: 6 (0)
The Chart: http://www.investmenthouse.com/cd/$compq.html
Nasdaq has not cured all of its ailments, but it did give itself a big boost with a strong move over 1700. In one session it put itself right at the doorstep of some resistance at 1740 where it stumbled around in late July. It is making the rebound that we talked about in the weekend report and now has 1740 and 1775 to deal with as resistance. How it deals with the breakout attempt at these levels is key to how the index perform into September. We anticipated a move higher that runs into some trouble and then spreads out laterally into September. With SOX making a strong breakout, Nasdaq will make a run at resistance as well. Just about that point DJ30, SOX, etc. may be ready for a test and thus take Nasdaq on into September still working on a breakout. That is not bad action at all. We also note, however, that Nasdaq ahs spent the past 5 weeks forming a handle to a cup base that started way back in January of 2002. The breakout point is the July highs referenced above. That focuses in on the overall positive pattern. Even if it does not breakout here, it is still working on the pattern for a breakout after the September dips.
S&P 500/NYSE
Large caps were on the move Monday, approaching next resistance as the moved toward the top of the range with stocks such as GE showing new life.
Stats: +9.07 points (+0.92%) to close at 999.74
NYSE Volume: 1.112B (+97.72%). Big jump in volume, but the trade was still lower than the prior week's action. That was the weakest aspect of the moves Monday.
Up Volume: 843M (+544M)
Down Volume: 268M (+16M)
A/D and Hi/Lo: Advancers led 2.04 to 1. Good breadth that improved late in the session as many stocks rallied to close near their session highs.
Previous Session: Advancers led 1.23 to 1
New Highs: 246 (+104). Nice surge in new highs.
New Lows: 33 (+10)
The Chart: http://www.investmenthouse.com/cd/$spx.html
That narrowing range last week gave way to a nice upside break that takes SP500 right to next resistance at 1003, followed by its mid-June and mid-July intraday highs at 1015. The move was not a breakout and SP500 is still very much within its range. It is a good consolidation, however, and ready to make a run at that resistance. As with Nasdaq, that is where the rubber meets the road as to whether it joins DJ30 et al with a breakout or heads back down for a test on into September.
DJ30:
Stats: +90.76 points (+0.97%) to close at 9412.45
Volume: 1.112B (+97.72%)
We thought it would take a few more days to make the breakout, but obviously it did not. The blue chips, aided by a solid August update from WMT, broke out of their 8 week range on a nice volume surge. It was not an average or above average volume session, but trade topped levels of the past week as DJ30 made the move over 9361, the July intraday high. Not a breakout to shudder the pillars of Wall Street but with GE, CAT, INTC, WMT, HPQ, AA and other moving sharply higher on very solid trade, it was worth putting more money into. 9500 is the next resistance.
TUESDAY
The market will have a chance to show the Monday action was not just a relief move from the uncertainty heading into the weekend with respect to the power grid. Certainly there was some short covering as stocks rallied higher after it was clear things were going just fine other than the finger pointing as to who to blame.
Now the market gets back to pricing in the future with housing starts, permits and the delayed Michigan sentiment report for August Tuesday. The market needs to put together another solid session and not immediately turn back the DJ30 breakout. DJ30 seems to be in little trouble of doing that with all of the very nice moves breaking higher. Again, the key will be what Nasdaq and SP500 do when they get to the top of the range.
As stocks recovered from the 50 day MVA test two weeks back we have been moving into positions as stocks made the moves we were looking for. That put us into positions that are moving well, and we were adding to them Monday. It is a situation where you look at the possibilities of what can happen and what is most likely to happen, and then prepare for the possibilities that arise within that anticipated trend. Overall we see the market moving higher the rest of the year with a dip at some point in September. Still, we could get a very nice late summer move here that puts money in the pocket before that happens. When the market starts moving, we move with it.
Support and Resistance
Nasdaq: Closed at 1739.49
Resistance: Right at 1740 where it found resistance in late July. 1760 (May 2002). 1800.
Support: 1700 (Feb 2002 low). The 18 day MVA (1696). The exponential 50 day MVA (1666). The lower end of the June closing highs (1677 to 1645) held on the last test. 1600 to 1595 (June 2002 closing high). The mid-May high (1554).
S&P 500: Closed at 999.74
Resistance: 1003, the early June closing high. June closing high at 1011. The June intraday high at 1015. Then 1050.
Support: The 18 day MVA (986). The exponential 50 day MVA (979) and 975 (December 1997 peak). 965 (August 2002 peak). 951 (late May high) to the mid-May high (948). 935 (November and January peaks).
Dow: Closed at 9412.45
Resistance: 9500 (June 2002 lows).
Support: 9361 the July intraday high to 9353, the June intraday high. 9250 to 9236, the early June intraday high. The 18 day MVA (9230). The exponential 50 day MVA (9102). 9000 is some psychological and price support that has held previously. January high (8870). The mid-May high at 8743
Economic Calendar
8-19-03
Housing starts, July (8:30): 1.790 expected, 1.803M June.
Building permits, July (8:30): 1.800M expected, 1.817M
Michigan sentiment preliminary, August (9:45): 91.5 expected, 90.9 July
8-21-03
Initial jobless claims (8:30): 395K expected, 398K prior.
Leading economic indicators, July (8:30): 0.4% expected, 0.1% June
Philly Fed, August (12:00): 10.0 expected, 8.3 July.
THE PLAYS
CONTINUING/WATCHLIST: Tonight we put the continuing plays on part 1.
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
ABRX 08/14 A Wedge 23.35 -1.16 24.87 29.88 511K 600K 23.13
Buy Not Issued. Moved down to test the 10 day MVA on higher volume. Touched the 18 day MVA intraday.
AMZN 05/03 BO 43.02 +2.92 30.3 35.45 11M 12M 39.05
Current. Excellent bounce off the 10 day MVA on strong volume.
ANSR 08/11 Cup hdl 3.2 -0.12 3.43 4.22 151K 350K 3.19
Current. Moved down to close on the 10 day MVA on higher volume. Touched the 18 day MVA intraday. Still in good shape.
AOS 07/24 Rv H&S 34.24 +0.08 33.05 40 68K 175K 30.94
Buy Not Issued. Moved up on higher volume, but still well below average. Volume was not there so we did not enter the play.
ARTG 08/12 Test 50 2.1 +0.06 2.26 2.72 325K 1M 1.98
Buy Not Issued. Doji up on higher volume. Touched the 10 day MVA intraday. Volume is still not there.
ASPT 08/09 Test BO 7.99 +0.46 8.06 10.12 1.4M 791K 7.38
Current. Opened on the 18 day MVA and had a good move up on strong volume. Broke through the 18 day MVA intraday. Still in good shape
ASTSF 07/12 Cup hdl 7.55 +0.3 6.5 8.25 222K 500K 6.98
Current. Moved up on higher volume. Continue to let the stock work for us.
AVID 08/09 Test 18 47.62 +2.51 0 0 405K 0 0
AVNX 08/14 Flat 4.76 +0.05 4.68 5.92 1.4M 2M 4.26
Current. Moved up on lower volume. Letting the stock work for us.
BDY 07/16 Test BO 24.48 +0.29 19.58 23.25 224K 376K 22.02
Current. Moved up on higher volume.
BEAS 08/04 Cup hdl 12.95 +0.37 13.88 16.65 6.5M 16M 12.91
Buy Not Hit.
BEAS 07/31 Cup hdl 12.95 +0.37 13.37 16.22 6.5M 16M 12.69
Current. Moved up on higher volume.
BEV 07/26 Test BO 5.89 +0.24 5.54 6.94 1.1M 1.4M 5.38
Current. Nice bounce off the 10 day MVA on higher volume.
BLI 08/14 Cup hdl 16.94 +0.04 17.18 20.38 630K 750K 15.84
Current. Closed below the opening price but up on higher volume.
BMRN 08/07 Put 8.14 -0.11 8.98 6.95 1.3M 1.3M 9.75
Buy Not Hit. Moved down on higher volume. Stock needs to rally before we enter the play.
CHRD 07/28 Test BO 3.01 -0.16 3.22 4.05 851K 822K 2.99
Current. Moved down on higher volume to test the 10 day MVA. Still in good shape.
COLT 07/24 BO 6.14 +0.09 5.3 6.68 96K 200K 5.52
Current. Moved up on higher volume.
CRAY 07/22 Test BO 12.35 +0.1 9.73 11.75 1M 1.4M 11.04
Current. Moved up on higher volume. Let the stock work for us.
CY 08/16 A Wedge 15.92 +1.62 15.68 18.78 4.7M 3M 14.22
Current. Nice volume breakout from the ascending triangle.
DIS 08/09 Test 18 22.4 -0.05 0 0 7.2M 0 0
DKS 03/18 DB hdl 41.43 +2.94 23.81 28.42 1.1M 225K 35.94
Current. Great move up on strong volume.
DKS 02/19 DB hdl 41.43 +2.94 22.75 27.35 1.1M 225K 35.94
Current.
EBAY 12/12 Test 18 108.26 +5.19 69.45 92 7.4M 12M 105.55
Current. Excellent breakout through the simple 50 day MVA on strong volume.
EBAY 10/15 Test 50 108.26 +5.19 62.45 92 7.4M 12M 105.55
Current.
EGO 06/25 Cup hdl 2.27 -0.01 1.88 2.45 356K 210K 2.12
Current. Gapped down at the open but closed higher although still slightly down from the previous day. Volume was strong. Still in good shape
ESA 08/05 Cup hdl 14.92 +0.22 15.34 18.45 298K 405K 14.44
Buy Not Hit. Bounced off the 18 day MVA on higher volume. Watching for the move up on higher volume to enter the play.
FARO 08/16 Test 50 10.36 +0.89 9.58 11.52 254K 220K 8.94
Buy Not Hit. Continued the nice volume move off the 50 day MVA.
FLSH 05/22 Test BO 16.2 +0.11 10.55 12.75 195K 195K 14.92
Current. Moved up on higher volume. Touched the 10 day MVA intraday.
FLSH 05/12 Rv H&S 16.2 +0.11 9.2 10.96 195K 195K 14.92
Current.
GENZ 08/07 Put 46.39 +1.04 44.05 40 2M 4M 46
Buy Not Issued. Moved up on higher volume, but still well below average. Needs to tank below the exponential 50 day MVA on higher volume to be a viable play.
GMR 07/30 Cup hdl 12.1 +0.05 12.14 14.45 111K 218K 11.75
Current. Bounced off the 10 day MVA on higher volume.
GPT 08/13 H&S 51.5 +0.07 50.02 47.48 472K 600K 51.66
Buy Not Hit. Gapped higher then closed on the simple 50 day MVA on higher volume.
GTRC 08/09 BO 32.43 +0.4 34.12 41 511K 725K 31.73
Buy Not Hit. Moved up on higher volume. Needs to break through the 10 day MVA on higher volume.
HL 08/04 Cup hdl 6.07 -0.18 6.07 7.28 1.3M 1.7M 5.92
Current. Gapped down to test the 10 day MVA on higher volume. Still in good shape.
INTC 08/18 FlyPlt 26.19 +1.14 25.88 30.95 5.9M 75M 24.55
Current. Kept an eye on it and issued alert when it hit buy point.
KKD 08/09 Cup hdl 49.37 +0.47 45.08 54.25 1.2M 1M 44.48
Current. Continued to move higher on strong volume.
LPNT 08/09 Rv H&S 27.73 +0.29 29.06 35 690K 1.3M 27.03
Buy Not Hit. Moved up on higher volume, but still volume below average.
MERX 07/15 Cup hdl 12.03 +0.63 10.52 12.75 123K 248K 10.52
Current. Good move up on higher volume. Letting the stock continue to work for us.
MKSI 07/21 Cup hdl 23.85 +1.37 22.25 27.95 255K 488K 21.68
Current. Great move on higher volume.
MKSI 07/14 Cup hdl 23.85 +1.37 22.8 27.95 255K 488K 21.67
Current.
MLHR 08/09 Test BO 22.6 +0.62 21.72 26.12 305K 325K 21.04
Buy Not Issued. May live to regret this one as it moved up on average
volume.
MPS 08/16 Cup hdl 8.98 +0.02 9.75 11.68 1.1M 677K 9.07
Buy Not Hit. Moved slightly up on strong volume. Could be the bounce we are looking for off of the 10 day MVA.
NSM 08/13 Cup hdl 25.12 +1.01 24.94 29.94 3M 5.3M 23.19
Current. Excellent move up on strong volume.
OCR 08/09 Test 50 33.7 -0.25 0 0 852K 0 0
ONNN 06/21 Test BO 3.75 +0.05 3 3.75 252K 900K 3.18
Current. Continued to move up on slightly higher volume. Letting the stock work for us.
PCOR 08/13 Cup hdl 2.2 0 2.46 3.12 112K 225K 2.18
Buy Not Hit. Doji on the 18 day MVA. Still holding the 18 day MVA. Still in good pattern. Waiting for the break out move.
PMTI 08/06 BO 6.35 -0.25 6.59 7.91 170K 200K 5.96
Buy Not Issued. Broke through the 10 day MVA on higher volume. Broke through the 18 day MVA intraday.
PWER 08/12 Test BO 11.65 +0.78 11 13.45 734K 675K 10.02
Current. Good move up on strong volume.
PWN 07/31 FlyPlat 16.3 0 17.75 21.35 58K 240K 16.51
Buy Not Hit. Doji just below the 18 day MVA on higher volume. Still nice handle formation.
SBUX 07/30 Cup 27.23 +0.34 27.55 33 1.7M 6M 25.94
Buy Not Issued. Gapped higher up on higher volume, but still below average volume.
SBUX 07/01 Cup 27.23 +0.34 26.3 30.94 1.7M 6M 26.45
Current.
TGT 08/09 Flat 38.72 +0.9 40.12 48 3.4M 5.7M 37.31
Buy Not Hit. Gapped up on higher volume. Needs to break throught the 10 day MVA on higher volume to be a viable play.
TIWI 08/07 A Wedge 3.59 -0.09 4.06 5.65 84K 689K 3.75
Buy Not Hit. Moved down on higher volume. Continue to watch the stock.
TSCO 07/29 Test BO 61.95 +3.7 56.12 62.88 526K 494K 54.94
Current. Great move up on strong volume.
TSCO 06/03 Rv H&S 61.95 +3.7 46.85 55.25 526K 603K 54.94
Current.
TSCO 04/24 Cup hdl 61.95 +3.7 43.75 52 526K 603K 54.94
Current.
TSCO 04/03 Rv H&S 61.95 +3.7 38.6 44.38 526K 577K 54.94
Current.
TZIX 07/21 Rv H&S 7.15 +0.12 7.7 9.45 101K 200K 6.96
Current. Moved up on higher volume. Pushed through the 10 day MVA intraday.
UNTD 07/12 Test BO 35.11 +0.82 28.8 34.12 1.6M 2.1M 31.62
Current. Continue to move up on higher volume. Enjoying the run.
UNTD 05/29 Flat 35.11 +0.82 23.45 28 1.6M 2M 31.62
Current.
UTSI 08/09 Test 50 43.79 +1.97 41.72 50 2.4M 4.5M 39.95
Current. Good move on higher volume.
VRTS 08/19 CCall 32.2 +0.85 19.76 20 5.5M 8.5M 29.06
Current. Great move on higher volume.
VVTV 07/19 Cup hdl 17 +0.08 16.95 20.45 188K 250K 16.39
Current. Bounced off the 10 day MVA with higher volume.
WTW 08/09 Put 43.55 +0.2 42.24 39.68 406K 800K 43.28
Buy Not Issued. Moved up on higher volume. Needs to tank below the 10 day MVA on higher volume to be a viable play.
End part 1 of 2
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