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Begin part 2 of 3
NASDAQ
Slightly undercut the 18 day MVA and up trendline but on very low volume.
Stats: -30.98 points (-1.57%) to close at 1937.82
Volume: 1.676B (-20.74%). Volume fell off the table as Nasdaq slid lower all session. It broke the 18 day MVA and the up trendline, but marginally, and the low volume indicates it was not much of a horrid event.
Up Volume: 337M (-753M)
Down Volume: 1.315B (+327M)
A/D and Hi/Lo: Decliners led 1.91 to 1. Poor breadth, but not an out and out rout.
Previous Session: Decliners led 1.15 to 1
New Highs: 102 (-50)
New Lows: 10 (+3)
The Chart: http://www.investmenthouse.com/cd/^ixq.html
An early comeback attempt from the gap lower was over early as well. After that stretch higher the techs sold all session. A rally with 1.5 hours let ran out of steam and Nasdaq closed just off its low thanks to a last minute uptick. Absolutely no upside interest given the INTC news. On the other hand, there was no real selling either as volume was the lightest of the week. A lack of bids and just a few sellers sent it lower.
It closed below the 18 day MVA (1945) and the March/August up trendline (now at 1948). Those are key levels, and while closing below them they did so just barely and on very low trade. A low volume, lazy move just below those levels is not a major breakdown. It can still hold here, even hit the 50 day MVA (1913), and still make a higher low. It made a higher high, just barely, on the move higher, not the strong moves up off tests of the uptrend prior in the rally. It is long in the tooth, and about the only thing that keeps it going here is the year end, holiday move.
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: ALTI; GBN; TRPH; CPHD; ZILA
Best Plays:
1) IBIS: Nice test of the breakout.
2) IMOS: Ready to break higher on nice volume.
3) NPSP: Nice cup with handle.
4) AOT: Excelletn breakout test, holding the 18 day MVA.
5) JNPR: Still building a great pattern.
6) NANO: Another very nice breakout test.
7) OBAS: And yet another.
NEW PLAYS:
Upside:
Play Date: 12/06/2003
IBIS (Ibis Technology--$16.12; +0.11; optionable): Semiconductor integrated circuit
http://biz.yahoo.com/p/i/ibis.html
STATUS: Testing the breakout. IBIS is pulling back to test the the break from a nice short 7 week base that formed more or less over the 50 day MVA (13.73). Accumulation in the pattern is solid at 3 to 1 (3 up price weeks on rising volume to 1 down price week on rising volume). Friday it edged back to the 10 day MVA (15.81), held and posted a slight gain. Money flow is already surging up ahead of the price as it pulls back, and relative strength broke out with thes the stock two weeks back. It is holding over the left side of the pattern, a very good sign. Looking for volume to rise again on the move back up to show the test was successful. That is one of our favorite entry points as it shows the base and the breakout were solid.
Volume: 245.448K Avg Volume: 198.272K
BUY POINT: $16.42 Volume=297K Target=$19.75 Stop=$15.27
POSITION: UIB DC - Apr. $15c (66 delta) &/or Stock
http://www.investmenthouse.com/ct/ibis.html
Play Date: 12/06/2003
IMOS (Chipmos Technologies--$8.21; +0.76; no options): Chip equipment
http://biz.yahoo.com/p/i/imos.html
STATUS: Testing the breakout. IMOS broke out of a long 21 month base in October, kicking off the rally to 8. After that initial surge it has moved laterally the past four weeks, building a nice lateral pattern showing 2 to 0 accumulaiton. Investors are using this nice lateral move as another point to build some positions. Friday it was up on strong volume, nearing the next breakout point. Ready to step in as it continuest the move this week.
Volume: 941.974K Avg Volume: 368.272K
BUY POINT: $8.38 Volume=552K Target=$10.28 Stop=$7.52
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/imos.html
Play Date: 12/06/2003
ITXC (ITXC Corp.--$4.11; +0.04; no options): Internet software
http://biz.yahoo.com/p/i/itxc.html
STATUS: Cup. ITXC appears to be working on forming a handle (lateral and slightly lower move to shakeout the remaining sellers) to a 5 month cup base. Outstanding 7 to 2 accumulation in the pattern that formed over the 50 day MVA (3.61), a very good support level as big money tends to go to work there and pick up shares. Volume surged the past two weeks as it started up, just as it should. May take another few sessions to form a handle, but we want to be ready for the stock when it makes the move on strong trade.
Volume: 1.276M Avg Volume: 470.545K
BUY POINT: $4.52 Volume=706K Target=$5.88 Stop=$4.21
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/itxc.html
Play Date: 12/06/2003
NPSP (NPS Pharmaceuticals--$30.75; -0.2; optionable): NPS Pharmaceuticals
http://biz.yahoo.com/p/n/npsp.html
STATUS: Cup w/handle. As the market sold off last week NPSP eased back to the 10 day MVA (30.40) on mostly lower volume. Thursday and Friday it tapped the 10 day MVA on the low and then rebounded slightly. Solid 4 to 2 accumulation in the 12 week base. Strong money flow is working higher even as the stock moves laterally and lower in the handle. Nice, steady pattern.
Volume: 364.056K Avg Volume: 857.909K
BUY POINT: $31.88 Volume=1.3M Target=$38.25 Stop=$30.22
POSITION: QKK BF - Feb. $30c (60 delta) &/or Stock
http://www.investmenthouse.com/ct/npsp.html
Play Date: 12/06/2003
ORBK (Orbotech--$23.34; -1.12; optionable): Business software
http://biz.yahoo.com/p/o/orbk.html
STATUS: Ascending triangle. Thursday ORBK looked ready to breakout of the 8 week base, jumping off the 50 day MVA (22.69) that has held as support during this pattern. Outstanding 5 to 1 accumulation in the short pattern, setting up a very solid foundation for a breakout. Breakouts from these patterns can be very explosive.
Volume: 92.151K Avg Volume: 131.727K
BUY POINT: $24.58 Volume=198K Target=$29.65 Stop=$23.28
POSITION: OKQ DX - Apr. $22.50c (63 delta) &/or Stock
http://www.investmenthouse.com/ct/orbk.html
CONTINUING PLAYS:
Upside:
Play Date: 11/24/2003
AOT (Apogent Tech--$23.01; -0.16; optionable): Medical instruments
http://biz.yahoo.com/p/a/aot.html
STATUS: Testing the breakout. Nice surge off the 50 day MVA to end November and breakout from the 3.5 month flat base. Now AOT is coming back to test that move, easing back to the 18 day MVA (22.84) on lower, below average volume. Friday it showed a doji at that level, indicating that the test is ending. Now we want to see it rally back up on strong, above average volume. Excellent money flow to go along with the accumulation.
Volume: 148.6K Avg Volume: 289.818K
BUY POINT: New: $23.28 Volume=405K Target=$27.95 Stop=$22.32
POSITION: AOT DX - Apr. $22.50c (62 delta) &/or Stock
http://www.investmenthouse.com/ct/aot.html
Play Date: 12/04/2003
CHPC (Chippac--$8.22; +0.21; optionable): Semiconductor memory hcips
http://biz.yahoo.com/p/c/chpc.html
STATUS: Cup w/handle. Friday CHPC surged on strong volume, working toward the breakout from its 21 week base. Excellent 7 to 3 accumuilation in the pattern has set the foudnation for a breakout and run. Now we get ready for a breakout on continued strong trade.
Volume: 5.419M Avg Volume: 2.52M
BUY POINT: $8.58 Volume=3.7M Target=$10.35 Stop=$7.98
POSITION: AKQ DU - Apr. $7.50c (65 delta) &/or Stock
http://www.investmenthouse.com/ct/chpc.html
Play Date: 11/24/2003
CRA (Applera--$14.33; +0.13; optionable): Medical labs
http://biz.yahoo.com/p/c/cra.html
STATUS: Breakout test. CRA blasted out of its 5.5 month base to start the monty, rallying on strong trade. At the end of the week it fell back with the rest of the market. Firday it gapped down to the 18 day MVA (13.78) and then rebounded to post a gain. Excellent 9 to 3 accumulation in the base with strong money flow and excellent relative strength. Ready for more after this test.
Volume: 450.7K Avg Volume: 577.863K
BUY POINT: New: $14.62 (orig. $14.13) Volume=809K Target=$16.95 Stop=$13.72
POSITION: CRA CV - Mar. $12.50c (72 delta) &/or Stock
http://www.investmenthouse.com/ct/cra.html
Play Date: 11/22/2003
JNPR (Juniper Networks--$17.9; -0.24; optionable): PC networking and communication
http://biz.yahoo.com/p/j/jnpr.html
STATUS: Ascending triangle. JNPR continues to tantalize, easing back in the 13 week base, holding over the 50 day MVA (17.59) Friday with a nice, tight doji. The stock has shown a doji just over the 50 day MVA each time it has bounced in the pattern. It is making a higher low again and building the pressure for a breakout. It is a very nice pattern, but for us to take new positions we are going to have to see a breakout on strong volume.
Volume: 3.192M Avg Volume: 9.072M
BUY POINT: New aggressive: $18.23 Breakout: $19.18 Volume=12M Target=$21.85 Stop=$17.99
POSITION: JUX DR - Apr. $17.00c (60 delta) &/or Stock
http://www.investmenthouse.com/ct/jnpr.html
Play Date: 12/03/2003
MTMD (Microteck Medical--$4.40; -0.10; no options): Medical appliances and equipment
http://biz.yahoo.com/p/m/mtmd.html
STATUS: Cup. Volume faded late in the week as the breakout move sputtered but MTMD did not tank. Indeed, it tapped at near support at the 10 day MVA (4.04) on the Thursday and Friday low and rebounded though volume was low. It still looks very strong as it tries the breakout from its 13 week base with outstanding 6 to 0 accumulation, solid money flow, and a relative strength breakout. After holding up well as the market sold to end the week, MTMD is ready to continue the breakout move.
Volume: 90.41K Avg Volume: 211.272K
BUY POINT: $4.52 Volume=312K Target=$5.88 Stop=$4.15
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/mtmd.html
Play Date: 11/26/2003
NANO (Nanometrics--$15.60; -0.33; no options): Scientific & technical instruments
http://biz.yahoo.com/p/n/nano.html
STATUS: Testing the breakout. NANO broke out from its 11 week base to start the month, but the late week selling pushed it back some. Volume was low, however, and NANO held over the 10 day MVA (14.77) on the lows. Solid action forming over the 50 day MVA (12.95). Money flow is still moving up as the stock fades to the 10 day, and relative strength is holding up well. We love breakout tests as they 'prove up' the breakout and are less subject to falling back on you.
Volume: 578.095K Avg Volume: 459.5K
BUY POINT: New: $16.05 (orig. $13.93) Volume=450K Target=New positions: 18.75 (orig. position initial target: $16.75) Stop=$14.65
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/nano.html
Play Date: 12/01/2003
NUAN (Nuance Communications--$8.3; -0.37; no options): Business software
http://biz.yahoo.com/p/n/nuan.html
STATUS: Cup w/handle breakout. Continues the early week breakout, holding the 10 day MVA (8.25) Friday on continued below average volume. A nice breakout from a 7 week base that was the second base off of the the six month base at the stock's bottom, the last being a 4 month flat base from June through September. Accumulation in the current base is a solid 3 to 0, and the base formed holding the 50 day MVA. Ready to bounce from here.
Volume: 251.391K Avg Volume: 299.681K
BUY POINT: $9.18 Volume=450K Target=$11.12 Stop=$8.48
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/nuan.html
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/ct/obas.html
Play Date: 10/27/2003
TEO (Telecom Argentina--$7.96; +0.06; no options): Foreign telecom services
http://biz.yahoo.com/p/t/teo.html
STATUS: Testing the breakout. A wild day Friday, testing the 50 day MVA on the low (7.48) and rebounding to close once again above the 18 day MVA (7.89). Nice, tight test of the breakout from a 4 month cup with handle base. Money flow and relative strength remain strong as the stock moves laterally and slightly lower. Kind of wild, but a good recovery. Just waiting for the next break higher.
Volume: 326.5K Avg Volume: 382.09K
BUY POINT: New: $8.24 (orig. $7.26) Volume=511K Target=$9 Stop=$7.76
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/teo.html
Play Date: 12/03/2003
XING (Qiao Zing Telephone--$10.66; -0.13; optionable): Chinese telecom
http://biz.yahoo.com/p/x/xing.html
STATUS: Flat base. Thursday and Friday XING eased off from the breakout move, holding up very well as the market sold and it eased back on lower volume. China is one of the Chinese stocks that exploded on the scene in the summer; it went from 2 to 12 in less than 2 months. It ran out of gas and fell into the current 5 month base, moving laterally over the 50 day MVA (8.91). Excellent 9 to 4 accumulation in the base. Looking to move in on a resumption of the move back up on a bit higher volume.
Volume: 690.933K Avg Volume: 574.59K
BUY POINT: New: $11.12 (orig. $10.75) Volume=1M Target=$13.75 Stop=$9.94
POSITION: QAE CB - Mar. $10c (68 delta) &/or Stock
http://www.investmenthouse.com/ct/xing.html
End part 2 of 3
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us stock market
top stock pick
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