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Begin part 2 of 2
S&P 500/NYSE
Gave back the breakout by a hair, but the low volume makes that like splitting hairs, and it held the 10 day MVA to boot.
Stats: -8.22 points (-0.77%) to close at 1061.5
NYSE Volume: 1.217B (-17.23%). Volume dropped off on NYSE to the lowest of the week as well, indeed lower than most of the November volume that was below average. Thus the slight dip below the breakout over the November high was not that horrendous.
Up Volume: 370M (-368M)
Down Volume: 830M (+111M)
A/D and Hi/Lo: Decliners led 1.24 to 1. Very modest.
Previous Session: Decliners led 1 to 1
New Highs: 212 (-23)
New Lows: 2 (-3)
The Chart: http://www.investmenthouse.com/cd/^spx.html
A rally attempt failed early and the large cap index sold all session. It broke below the November highs (1064-1062) and managed to rebound late to just hold the early November intraday high, using the 10 day MVA (1060) as support. All in all not a bad session, just a session without buyers willing to step in. This is where the rubber meets the road. May test the 18 day MVA (1056) intraday before making the move.
DJ30
Stats: -68.14 points (-0.69%) to close at 9862.68
Volume: 201M versus 217M
After making that new closing high Thursday the blue chips turned right back, gave it all up, failing at the up trendline (9929). It slid back, testing the 10 day MVA (9831) on the low and rebounding slightly to close. It is still holding over the November closing highs (9850), a good position to rally. It certainly had no help from INTC Friday and it still held the near term support. Again, a good position to rally.
THIS WEEK
The Fed meets Tuesday, and retail sales Thursday is the other big economic event. Many are worried that WMT is not selling enough goods to ensure a successful holiday season. It is an important part of retail sales, but this year it is not the end all. Thus the overall retail sales will be closely watched.
The economic data will continue to be watched, but this week's reports mostly likely won't drive the market up or down. The small cap, mid-cap, and semiconductor indices are making typical pullbacks in their uptrends. The smaller cap indexes are at the 18 day MVA, the SOX is just over the 50 day MVA and moving down to test it. SOX and DJ30 are holding their breakouts over the November highs. Nasdaq is at its up trendline, but it is struggling. Not many breakdowns in stocks, and many are set up to rebound. That action with the low volume led us to let those plays holding support ride another day. That all looks good, and we will be looking at several of these for rebound plays if the indexes make that move.
At the same time we will watch how Nasdaq holds at this level in light of that modest high on the last trendline bounce and the increased day to day volatility last week. While not the wild volatility that marked the early 2000 top, there is volatility here after a long run that we cannot ignore. Nasdaq could still sell to the 50 day MVA and make a higher low. We don't want to bail out just as stocks are bottoming, and it looks as if they are trying to do so. We may see a test, intraday or otherwise, toward the 50 day MVA on Nasdaq and SOX. As long as it is on low volume or reverses off of that level on strong volume the market is still set to make a move up in the holiday rally before Christmas.
Support and Resistance
Nasdaq: Closed at 1937.82
Resistance: The 10 and 18 day MVA (1952, 1945). The March/August up trendline (1950). November high (1992). The January 2002 double top (2044 to 2099).
Support: The September high (1913). The 50 day MVA (1913). 1875 to 1880 is the bottom of the week's range.
S&P 500: Closed at 1061.50
Resistance: 1080 from February 2002 lows. The December to June upper channel line at 1084. 1100 represents some early 2001 lows. 1150 to 1175, the early 2002 double top.
Support: November high (1061.40-1064) is still holding. The 10 and 18 day MVA (1060 and 1056). The exponential 50 day MVA (1043). 1030 to 1032 (early September highs).
Dow: Closed at 9862.68
Resistance: The November high (9903). The March/September up trendline (9929). 10,000. 10,259 (January 2002 high).
Support: The October high (9850). The 10 and 18 day MVA (9831 and 9800). The exponential 50 day MVA (9702). 9686 (September high; 9659 intraday). 9588 the early September highs. 9500 (June 2002 lows) is the top of the summer range.
Economic Calendar
12-09-03
Wholesale inventories, October (10:00): 0.1% expected, 0.4% September.
FOMC meeting results (2:15): Expecting no change.
12-11-03
Business inventories, October (8:30): 0.1% expected, 0.3% September.
Retail sales, November (8:30): 0.5% expected, -0.3% October.
Retail sales ex-autos (8:30): 0.3% expected, 0.2% October.
Initial jobless claims (8:30): 355K expected, 365K prior.
FOMC minutes (2:00)
12-12-03
PPI, November (8:30): 0.1% expected, 0.8% October.
Core PPI (8:30): 0.0% expected, 0.5% October.
Trade balance, October (8:30): -$41.2B expected, -$41.3B September.
Preliminary Michigan Sentiment, December (9:45): 96.4 expected, 93.7 November.
SEMINARS ON CD
http://www.stockseminarsonline.com
This is Jon Johnson's own site devoted exclusively to seminars designed to teach you what you need to know about the stock market and stock movement and how to take advantage of those moves without incurring the usual high costs of travel and related expenses usually associated with seminars.
THE PLAYS
Good movers Friday: AIRN; ALTI; NOOF; TRPH; GMR
Thursday night play results:
MND: Still testing the 18 day MVA and on low volume. Setting up for the bounce.
AIRN: No further waiting here as AIRN exploded higher after its successful breakout test.
New Plays:
Play Date: 12/06/2003
CDIC (Cardiodynamics--$6.05; -0.22; no options): Medical appliances
http://biz.yahoo.com/p/c/cdic.html
STATUS: Breakout test. Made us some money earlier in the year, and is setting up to make us money again. After breaking out of an 11 week triangle to end November, CDIC is coming back to test the breakout, holding just over the 18 day MVA (5.93). Volume has moved much lower and below average on the test. Positive 3 to 1 accumulation in the base (3 up weeks on rising volume to 1 down week on rising volume) set the foundation for the breakout and the run to come. Money flow is excellent and relative strength broke out on the move. The low volume is what you want to see on the test. Now it just needs to bounce on some rising, above average trade to make it successful. Looks good.
Volume: 246.911K Avg Volume: 401.09K
BUY POINT: $6.24 Volume=400K Target=$7.82 Stop=$5.92
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/cdic.html
Play Date: 12/06/2003
DPAC (DPAC Technologies--$2.19; -0.01; no options): Semiconductor memory chips
http://biz.yahoo.com/p/d/dpac.html
STATUS: Test breakout. Small but potent, and builidng into a really good move. DPAC broke out of a 9 week base in mid-November, rallied, tested the 10 day MVA, and rallied again. It spent the last week moving laterally and slightly lower in another 10 day MVA (2.06) test. Stocks typically make 4 to 5 runs up the 10 or 18 day MVA after breaking out, so DPAC still has plenty of upside ahead of it. The early breakout tests are also good points to step into the stock. We want to see volume kick back up as DPAC makes its rebound.
Volume: 53.6K Avg Volume: 143.136K
BUY POINT: $2.26 Volume=215K Target=$2.88 Stop=$2.05
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/dpac.html
Play Date: 12/06/2003
HL (Hecla Mining--$8.31; +0.5; optionable): Silver mining
http://biz.yahoo.com/p/h/hl.html
STATUS: Test breakout. HL shot out of a nice 11 week base in late November, rallying to 8.50 on the high. Accumulation in the base is an excellent 5 to 1, setting the base for a solid move higher. Friday HL came back to test the 10 day MVA (7.74) and then rebounded. First test of the breakout is a good place to enter. Strong money flow and a relative strength breakout make this a strong package.
Volume: 1.947M Avg Volume: 1.755M
BUY POINT: $8.48 Volume=2.5M Target=$10.62 Stop=$7.72
POSITION: HL CU - Mar. $7.50c (73 delta) &/or Stock
http://www.investmenthouse.com/cd/hl.html
Look ready for Monday: Lots of stocks making tests of the moves: OBAS; BCON; FDRY; INAP; NOOF; SCON; SWC. Others are just ready: GOLD; RCRC; RIC (nice test); RCRC
Play Date: 12/01/2003
OBAS (Optibase--$8.05; +0.25; no options): Telecom
http://biz.yahoo.com/p/o/obas.html
STATUS: Testing the breakout. After exploding higher Monday in a breakout from its 12 week flat base, OBAS spent the week making a low volume test of theat move. Thursday and Friday it tapped the 10 day MVA (7.67) on the lows and rebounded. It is ready to make the next move up.
Volume: 80.201K Avg Volume: 139.681K
BUY POINT: New: 8.28 (orig. $8.14) Volume=250K Target=$9.94 Stop=$7.49
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/obas.html
SUBSCRIBER PORTFOLIO: These are stocks subscribers suggest by vote that we put in a portfolio to track and move into the stocks if they set up well.
Considering injecting some fresh blood into this section. Please forward any favorites that you feel would be good, solid inserts.
AVID, COH, DIS, GTRC, KKD, LPNT, OCR, TGT, UTSI, XMSR
AVID: Tanking below the 50 day MVA, trying to hols at some support at 47.50.
DIS: Failed in its attempt to retake the 50 day.
UTSI: Nice test of the 18 day MVA still in progress. Setting up to move up to form the right side of the base.
SUBSCRIBER WATCHLIST
We continually receive ideas for potential plays from our subscribers. Many times they are already on our watchlists, other times not. We always take a look at them and sometimes find a few pearls. This weekend we are starting a new feature where we include some subscriber choices that could develop into plays. We are not necessarily endorsing these, but want to provide a forum for subscribers with ideas that may appeal to their portfolio. Typically we will put these on without commentary, but if we see something we really like or dislike we will point it out. That way we can maybe come up with some new plays, find some plays that may fit your style, and have another great educational tool to discuss problems or good aspects about stocks our subscribers are looking at.
CAM: A reverse head in shoulders from mid-October to early December that is making the breakout on above average volume. Has the 200 day MVA overhead at 48 and price resistance at that point as well that will most likely make it take a pause.
CONTINUING:
LEGEND
DATE: date play first appeared on report.
PLAY: Denotes the type of pattern or play.
Upside play types: A Wedge=Ascending triangle/wedge; BO=Breakout; Cup=Cup base; Cup hdl=Cup w/handle; DB hdl=Double bottom w/handle; Dbl btm=Double bottom; Flat=Flat base; FlyPlat=Flying Plateau; Pennant=Pennant; Rv H&S=Reverse head & shoulders; Saucer=Saucer base; Test 18=Testing 18 day MVA; Test 50=Testing 50 day MVA; Test BO=Testing the breakout (could be 10 day MVA test, etc.)
Downside play types: CCall=Covered Call; DWedge=Descending triangle/wedge; Dbl Top=Double top; H&S=Head & shoulders; Put (generic downside);
PIVOT=Buy point
Tgt=Target stock price for the play. Applies to stock and options.
Vol=Volume for the most recent session.
TgtV=Target volume to enter the play.
Stop=Stop advisory point. This is advisory and we may or may not exit a play if it hits this level depending upon market conditions.
Upside Plays
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
^OEX 12/01 A Wedge 523.51 -4.05 526.85 545 0 650K 519.98
Buy Not Issued. Pull back to test the 10 day MVA and rallied on lower volume. Still in the pattern.
^OEX 11/06 A Wedge 523.51 -4.05 523.15 545 0 650K 519.98
Current.
A 11/22 Test BO 26.92 -1.07 28.34 33.94 0 2.5M 27.12
Exited. Stock tanked below the 18 day MVA on average volume.
AIRN 12/04 Test BO 3.21 +0.31 3.22 4.18 1.9M 537K 2.99
Current. Entered the play as the stock tested the 18 day MVA and rallied for an explosive move on excellent volume surge.
ALTI 12/01 Dbl btm 2.31 +0.21 2.05 2.74 4.4M 1.2M 1.89
Current. Tapped 2.53 at the intraday high, but gave most of it back still to have a nice move on above average volume. Stock needs to break through 2.40 to move higher.
ARTX 10/28 Test BO 2.15 -0.28 1.78 2.28 2.8M 1.5M 2.43
Exited.
ASL 11/18 BO 13.87 +0.48 13.16 15.85 409K 785K 12.98
Current. Bounced off the 10 day MVA for a nice move on lower volume. May not be through testing.
AVID 08/09 Test 18 48.46 -1.99 0 0 618K 0 0
BCON 11/15 A Wedge 1.2 -0.02 1.29 1.75 1.5M 7.7M 1.12
Current. Continue to make low volume lateral move on the 10 day MVA.
BEV 11/12 Cup 8.3 -0.15 7.25 8.94 1.4M 1.7M 7.98
Current. Pull back on below average volume. Testing the breakout.
DIS 08/09 Test 50 21.67 -0.53 22.06 26.48 9.5M 9M 22.05
EAR 12/02 Cup hdl 1.8 -0.04 1.88 2.45 137K 254K 1.72
Buy Not Issued. Continue to pull back and test the 10 day MVA and rallied on lower volume. Testing the break out.
EBAY 12/12 Test 18 55.9 -0.01 34.72 46 6M 12M 53.94
Current. More volatile with 56.63 at the high and 55.13 at the low. Continue to make a lateral move on the simple 50 day MVA.
EBAY 10/15 Test 50 55.9 -0.01 31.22 46 6M 12M 53.94
Current.
EONC 12/03 Rv H&S 3.4 -0.05 3.68 4.78 235K 225K 3.38
Buy Not Issued. Tested support at 3.20 intraday and rallied showing a doji on lower, but still strong volume. May be ready to move up from here.
EPIC 11/15 Flat 11.51 -0.45 12 14.56 282K 522K 11.42
Current. Tested the 10 day MVA at the day's high, but could not hold the gain and fell to close below the 18 day MVA on much lower volume. Testing the break out.
FDRY 11/24 Flat 25.99 -0.4 24.72 29.72 2.3M 3.5M 25.06
Current. Tested below the 10 day MVA and rallied on below average volume. Ready to move back up.
FL 10/11 A Wedge 21.42 +0.21 17.38 20.88 1.5M 1.4M 20.65
Current. Tested the 18 day MVA and rallied on lower, but above average volume. May test back further. Still in good shape.
FSII 11/25 Flat 6.88 0 6.54 7.98 218K 400K 6.48
Current. Gapped down at the open and then went down to test support at 6.50 and rallied closing flat on very low volume. In good shape.
GMR 12/04 Test 18 15.79 +0.94 14.77 17.78 508K 207K 14.55
Current. Another explosive move up on excellent volume.
GOLD 11/22 Cup hdl 28.51 +1.29 28.18 33.95 383K 680K 25.82
Buy Not Issued. Gapped down at the open and rallied for a nice move on average volume. Moving up the 10 day MVA. Have not entered the stock because the volume was not there.
IBPI 11/09 A Wedge 15.6 -0.25 16.12 19.38 24K 358K 14.82
Buy Not Issued. Gapped down at the open and rallied someone very low volume. Still in good shape. Testing the break out.
INAP 11/25 Test BO 2.17 -0.08 1.95 2.58 4.1M 5.7M 2.05
Current. Volatile with 2.28 at the day's high and 2.12 at the low (10 day MVA) showinga doji on much lower, but above average volume.
INTC 10/23 Test 18 32.1 -1.44 32.7 39 66M 65M 31.74
Current. Gapped down at the open and continued to drop to hold just above the 50 day MVA on stronger above average volume. Looking for a rebound next week.
LPNT 08/09 Rv H&S 29.65 -0.48 0 0 298K 1.3M 27.88
Buy Not Issued. Low volume pull back to hold at the 10 day MVA on below average volume.
MND 12/04 Test BO 6.55 -0.26 7.06 8.84 489K 1M 6.41
Buy Not Hit. Pull back on low volume. May test back further. In good shape making higher lows.
NOOF 11/01 Cup hdl 9.01 +0.65 5.27 6.32 534K 319K 8.42
Current. Bounced off the 10 day MVA and rallied with nice gain on average volume. Still in uptrend and moving up the 10 day MVA.
NOOF 10/25 Cup hdl 9.01 +0.65 4.78 6.21 534K 280K 8.42
Current.
OBAS 12/01 A Wedge 8.05 +0.25 8.14 9.94 80K 250K 7.49
Current. Tested the 10 day MVA and rallied on low volume. Beginning to move back up after testing the break out.
ONNN 10/28 Test 50 6.2 -0.6 4.65 5.88 3.2M 1.7M 5.88
Current. Gapped down and continued to fall closing below the 10 day MVA on lower, but still strong volume. testing the break out.
QLGC 11/24 Test 50 52.79 -1.71 57.22 68.68 4.4M 5.2M 55.22
Buy Not Issued. Stock tanked below the simple 50 day MVA on stronger volume. The stock has not made the move we were looking for so will drop, but will keep our eye it.
RCRC 12/02 DB hdl 21.7 +0.04 22.32 26.78 126K 169K 20.97
Buy Not Hit. Tested the 10 day MVA and rallied on slightly above average volume. C#ontinues to make a lateral move along the 10 day MVA.
RECN 12/01 Cup hdl 27.02 -0.22 28.12 33.75 33K 163K 26.98
Buy Not Hit. Gapped up at the open, but gave it all back and then some on very low volume. Still in the pattern.
RIC 12/03 Dbl btm 5 +0.1 5.18 6.75 64K 146K 4.84
Buy Not Issued. Bounced off the 10 day MVA and rallied on average volume. Still in good shape.
RWY 11/04 Cup hdl 7.79 +0.29 6.24 7.85 94K 146K 7.34
Current. Moving up after testing the break out. Tested the 10 day MVA and rallied on low volume.
SBUX 07/30 Cup 31.84 -0.17 30.35 36.75 2.6M 6M 31.32
Current.
SBUX 07/01 Cup 31.84 -0.17 26.3 30.94 2.6M 6M 31.32
Current. Tested the 18 day MVA and rallied showing a tight doji on the 10 day MVA on slightly higher, but below average volume.
SCON 11/24 Test BO 6.62 -0.22 6.38 7.78 1.2M 3M 6.42
Current. Tested the 18 day MVA and rallied on low volume. Testing the breakout.
SCON 11/18 Test BO 6.62 -0.22 6.22 7.78 1.2M 3M 6.42
Current.
SMDI 11/22 DB hdl 5.1 -0.42 5.49 6.85 236K 299K 5.11
Current. Gapped down at the open and continued to move down holding above support at 5. Holding support at 5 where it needs to bounce.
SMTL 12/03 Test BO 10.41 -0.34 11.74 14.12 54K 120K 11.98
Buy Not Hit. Stock continues to fall below the 18 day MVA. Entered the play as the stock tested the 18 day MVA and rallied for an explosive move on excellent volume surge.
SPRT 11/19 A Wedge 13.13 -0.07 13.35 15.98 529K 1M 12.82
Current. Gapped down at the open and rallied on average volume. Should be ready to move up from here.
SWC 11/20 Cup 8.51 -0.18 8.19 9.85 613K 600K 8.32
Current. Continue to test down holding the 10 day MVA on above average volume. Tested the break out and now ready to move back up.
TGT 08/09 Flat 39.19 -0.96 41.45 50 3.6M 5.7M 38.74
TMWD 11/19 BO 7.99 -0.17 8.15 9.78 286K 900K 7.77
Current. Tapped 8.20 at the day's high, but gave it all back showing a tight doji on low volume. May be ready for next move up.
TRPH 12/01 Test 50 6 +0.42 5.58 6.94 2.3M 1.7M 5.32
Current. Tested the 10 day MVA and rallied for a great move on strong volume surge.
TSCO 07/29 Test BO 40.29 -1.71 28.06 31.44 694K 494K 39.78
Current. Thudded down to hold just above the 50 day MVA on strong above average volume. May test down further. Has not closed near the 50 day MVA since late September.
TSCO 06/03 Rv H&S 40.29 -1.71 23.42 27.62 694K 603K 39.78
Current.
TSCO 04/24 Cup hdl 40.29 -1.71 21.88 26 694K 603K 39.78
Current.
TSCO 04/03 Rv H&S 40.29 -1.71 19.3 22.19 694K 577K 39.78
Current.
VLGC 11/10 Cup 2.81 -0.06 2.14 2.82 887K 1.3M 2.56
Current. Another pull back on very low volume. Continue to test the break out.
VOD 10/28 Cup hdl 23.64 +0.16 21.45 25.75 2M 2.8M 23.22
Current. Beginning to move back up after testing the break out on slightly higher but still below average volume.
WMS 11/21 Dbl btm 25.79 -0.59 25.83 31.22 156K 650K 25.68
Current. Continue to pull back holding at the 18 day MVA on low volume. Still in good shape.
XLA 11/17 Test BO 2.65 -0.13 3.14 4.12 222K 950K 2.87
Current. Continue the low volume pull back closing below the 18 day MVA. Testing the break out.
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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