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us stock market, trade stock
Begin part 2 of 3
MARKET ALERTS
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
THIS WEEK
The market has its work cut out for it again given the inability to hold the gains late Friday. It is still predominantly in a downtrend in the correction though NASDAQ and DJ30 have tapped at support intraday last week, held, bounced, and then paused on lighter trade. With the sentiment indicators we saw ahead of the move (put/call ratio, TRIN, rising volatility, increased talk of the bear continuing) as well as some slight improvement in NASDAQ price/volume action, we anticipate the bounce will continue even if it takes a slight pause and pullback early in the week.
Then there may be some hesitation ahead of the Friday jobs report. Moreover, the quarter ends on Wednesday, and that will add to some volatility to the market as positions are shuffled to take some gains or put some prettier faces in the portfolio for those quarterly reports. There is no lack of events for the market to deal with this week, but just as it used any news as a reason to sell the prior thus far this month, it will use some decent news to continue the rebound.
We are going to keep an eye out primarily for three play types this week. The first as always deals with stocks in good patterns and set up to make the move higher. In addition, after the Friday action there may be some strong stocks that started a rebound, pulled back some, and are still in position to take advantage of a continued move higher. Third, as stocks continue to rebound we will watch for those moving on lower and lower trade that reach resistance and stall. Those will provide opportunity as the market bounce stalls and the second test begins.
Again, if the bounce can continue into Thursday we will probably some hedging ahead of the jobs report. Stocks have moved higher ahead of previous reports in hope of better news only to get burned. Expectations are set lower this time and we feel that is good because we don't believe this will be the breakout month. Grand if it is, but we are not hopeful. It depends upon where the market is at that time, but if it has managed to continue its bounce it will most likely give some of the move up ahead of the report. If the jobs report fails to show a breakout and just meets expectations or, for shame, fails to meet the 100K expected, that will be a downer that most like starts another test. We would prefer the move to last longer as that makes for a better test.
We cannot forget earnings either. YHOO kicks them off in two weeks. First Call is indicating that the warnings are at quite a low pace even with required disclosure; if there is anything bad to say companies will air it and usually as early as possible to provide a window of forgetfulness before the actual results are released. A rally into the jobs report followed by some selling after the results sets up the market for a bounce as earnings start. If this is all wet and the jobs report is very strong stocks then rally further, set up a better test, and then come back a bit further down the road to make the bottom. Either way we look for it to continue the move higher then run out of steam for the next test that will set the bottom.
Support and Resistance
NASDAQ: Closed at 1960.02
Resistance: 1966 (18 day MVA) stalled it Friday. 1990 to 2000, the top of the late 2003 base. The exponential 50 day MVA (1999). The simple 50 day MVA (2035).
Support: Looking to see if the 10 day MVA (1948) and some prices from the recent March consolidation attempt (1943). Mixed tops and bottoms at 1900. The 200 day MVA (1890).
S&P 500: Closed at 1108.06
Resistance: The 10 day MVA (1109). The 18 day MVA (1116). The exponential 50 day MVA (1122) and price resistance at 1125. The simple 50 day MVA (1135). The January high (1155). Next is 1159 (February highs) and 1160 to 1175 the highs in that double top that spanned late 2001, early 2002.
Support: 1106 is a May 2002 top and represents some early 2001 lows. 1096 to 1100 may also try to hold. 1075 to 1070 from the December consolidation.
Dow: Closed at 10,212.97
Resistance: The 18 day MVA (10,267). The exponential 50 day MVA (10,359). The simple 50 day MVA (10,482). September/November up trendline (10,515).
Support: 10,000 to 9900-9850. 9859-9855 is the next real support
Economic Calendar
These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.
3-30-04
Consumer Confidence, March (10:00): 86.0 expected, 87.3 February.
3-31-04
Factory Orders, February (10:00): 1.4% expected, -0.5% January.
Chicago PMI, March (10:00): 61.0 expected, 63.6 February.
4-01-04
Initial jobless claims (8:30): 340K expected, 339K prior.
Construction spending, February (10:00): -0.1% expected, -0.3% January.
ISM (manufacturing sentiment), March (10:00): 59.8 expected, 61.4 February.
4-02-04
Non-farm payrolls, March (8:30): 100K expected, 21K February.
Unemployment rate, March (8:30): 5.6% expected, 5.6% February.
Average hourly earnings, March (8:30): 0.2% expected, 0.2% February.
Aerage workweek, March (8:30): 33.8 expected, 33.8 February.
THE PLAYS
Thursday night play results:
CRIO: Nice volume move continues.
DVA: Excellent volume as it broke out.
VION: Continued the move as volume backed down some.
New plays for Monday:
Upside:
Play Date: 03/27/2004
BGFV (Big 5 Sporting Goods--$25.02; +0.78; no options): Sporting goods stores
http://biz.yahoo.com/p/b/bgfv.html
STATUS: Flat base. A new issued in June 2002, BGFV enjoyed a strong 2003 as did many stocks, and it is now moving through a 10 week base holding mostly over the 50 day MVA (23.86), a sign of solid support for the stock. Accumulation in the pattern is a strong 4 to 1 (4 up price weeks on rising volume to 1 down price week on rising volume), and that tells us that money was moving into the stock, accumulating shares as the stock moved laterally. It is a sign of strength that it has held its gains as the market overall sold. Indeed, relative strength is breaking out ahead of price, a very bullish indication. It does not hurt that money flow is surging up ahead of the price. We are looking for the stock to follow the money higher. Volume was very good Friday, and it looks as if BGFV is ready to make its breakout.
Volume: 176.763K Avg Volume: 86.954K
BUY POINT: $25.72 Volume=150K Target=$30.85 Stop=$24.22
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/bgfv.html
Play Date: 03/27/2004
MTIC (MTI Technology--$3.00; -0.08; no options): Data storage devices
http://biz.yahoo.com/p/m/mtic.html
STATUS: Double bottom. Very nice action as MTIC comes off of the second lower leg of its 9 week bottoming pattern. It is approaching the 'hump' in the middle of the pattern (3.24), also called the middle of the 'W.' Accumulation is strong at 3 to 0 in the base and money flow is running higher ahead of the price. It may move up to 3.25 and then move laterally and form a handle. How it behaves at that point will drive how we approach the play. If it is surging through the buy point on strong volume we will go ahead and open a position. If volume is so-so up to that level, it will most likely form a handle. All we need to do is be patient and watch what it is showing us as it hits the buy point.
Volume: 81.345K Avg Volume: 167.5K
BUY POINT: $3.28 Volume=251K Target=$4.12 Stop=$3.05
POSITION: - Stock (option chain)
http://www.investmenthouse.com/cd/mtic.html
Play Date: 03/27/2004
RMKR (Rainmaker Systems--$2.29; -0.06; no options): Rainmaking services
http://biz.yahoo.com/p/r/rmkr.html
STATUS: Breakout test. After a huge surge two weeks back, RMKR has tested that move, coming back to the 18 day MVA (2.21) on lower and lower trade, holding over that level the last three sessions of the week on lower trade. This move follows the breakout from three consecutive bases. It is a bit winded, but this pattern has been yielding nice gains in the market as the stock tests back after a very strong move higher. We are looking for a strong rebound here up to the prior highs to book a nice gain. From there we watch if it can continue the move or if it then stalls and starts to work on a base. Strong money flow and nice breakouts from good bases offer a strong foundation for this move.
Volume: 129.611K Avg Volume: 111.227K
BUY POINT: $2.42 Volume=167K Target=$3 Stop=$2.25
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/rmkr.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 perform well. If you have any suggestions for additions or deletions, email us. We don't cover them all each report, just when something interesting is developing.
AVID, COH, DIS, EBAY; GTRC, HD; KKD, LPNT, OCR, TGT, TJX; UTSI, XMSR
KKD: This one continues its long downtrend. A great short now as it continues to fail and is resuming its move below the 10 day MVA after that rally attempt up to the 200 day MVA.
OCR: Really in trouble, falling on rising trade. A short play at this point to 38.50 or so.
TJX: Retail does not appear dead, and TJX is ready for the next breakout to a new high.
XMSR: Volume edged higher Friday as the stock approaches the breakout from the cup with handle. A move over 28 on strong, above average volume is what you need to see.
SUBSCRIBER WATCHLIST
We continually receive ideas for potential plays from subscribers. Many times they are already on our watchlists, other times not. We always take a look and sometimes find a gem or two, or more. We don't necessarily endorse these, but want to provide a forum for subscribers with ideas that may appeal to other subscribers. We may just put on the ticker or we might describe our thoughts as to why or why not we think it is a buy or sell. This is a way we can all learn a bit more and maybe find a few more candidates to make us some good money.
Upside:
APPA: Testing the nice gap breakout from a week back as it moved out of a 5.5 month cup w/handle base.
TLCV: Broke out from a quick double bottom in early March and has moved laterally over the 18 day MVA since. Looks solid. Tried the breakout Friday on rising volume but could not hold the move. Still a solid flying plateau pattern.
Downside:
MSPD: A steady downtrend after breaking the 50 day MVA to start the month. MSPD has spent the last week rebounding toward the 18 day MVA at 7. Volume has improved, but it looks as if it could roll over at that point for more selling.
SYKE: Has bounced up to the 10 day MVA and looks to be ready to rollover and continue the downtrend.
End part 2 of 3
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