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us stock market, stock prices
Begin part 2 of 3
NASDAQ
Yes the intraday action looked crappy but lower volume and no breakdown in the lateral move since the rally off the 200 day MVA keep things positive. Indeed, we LIKE the fact that so many viewed the action as negative.
Stats: +2.64 points (+0.13%) to close at 2052.88
Volume: 1.707B (-4.83%). Low, below average volume on the gap and dump, indicating no real selling.
Up Volume: 877M (-27M)
Down Volume: 809M (-4M)
A/D and Hi/Lo: Decliners led 1.15 to 1. Modest declines though it did fall from 1.8:1 levels earlier in the session.
Previous Session: Advancers led 1 to 1
New Highs: 190 (+49). New highs still rose despite the reversal. Again, it was not all bad news.
New Lows: 13 (-1)
The Chart: http://www.investmenthouse.com/cd/^ixq.html
As noted, NASDAQ gapped higher but could not take out its rally high (2079) hit just four sessions prior. NASDAQ is in a lateral move after bouncing off the 200 day MVA three weeks back. This is more or less exactly what we wanted to happen after this move. It could still fade back to the exponential 50 day MVA (2010) and fill the gap higher and still be set up for a nice rally. We just want the price/volume action to hold as it does; as noted, it is now positive at 2 up weeks on rising volume to 1 down week on rising volume. The 18 day MVA (2012) has crossed over the exponential 50 day MVA (2010), and that is a harbinger of continuing strength if it can hold. The move is often tested, but that test typically comes after a strong cut through the 50 day. Right now NASDAQ is still testing the move off the 200 day MVA so we will just have to wait and see how the 18 day MVA reacts. Again, the technical action is still good despite the intraday action Thursday. That action was more driven by a long weekend with terror and war worries than by any major disdain for stocks.
S&P 500/NYSE
Dragged lower by the retailers (predominantly 3-letter stocks) but there was no breakdown here. We sure would like a longer base, but this short one is acting pretty good.
Stats: +0.03 points (0%) to close at 1139.32
NYSE Volume: 1.188B (-18.4%). After showing some distribution Wednesday the action calmed down significantly Thursday even with some retailers selling on rising trade.
Up Volume: 485M (-5M)
Down Volume: 688M (-260M)
A/D and Hi/Lo: Decliners led 1.7 to 1. Small caps were selling with large caps so the breadth was decidedly narrow.
Previous Session: Decliners led 1.05 to 1
New Highs: 154 (+31). Managed more new highs even as it pulled back.
New Lows: 22 (+3)
The Chart: http://www.investmenthouse.com/cd/^spx.html
Not bad action on the daily chart even though we would prefer to see a longer base. SP500 tapped the simple 50 day MVA (1133) and rebounded to cut some losses to close. As with NASDAQ but to a more definite extent, the 18 day MVA (1130) has crossed over the exponential 50 day MVA (1126). On a further pullback it should do just as it should: test the crossover and then rebound for the next rally or, in this case, breakout. That is how it works with a breakout: rally up the right side of the base, fade to test the move on the shakeout, then the breakout.
The small cap index is acting similarly, though it just recently hit a new high. It is supposed to underperform the large caps this year, but don't tell them. Its 18 day MVA has soared through the 50 day, and it looks as if the index is going to come back to test the break to a new high, and when that happens the 18 day MVA will make its test and be ready to resume the move. That should coincide with NASDAQ completing its handle along with SOX, and with that the three horsemen from 2003 will be ready to move again, once more outpacing the large caps. Why? Because the economy is still expanding more than experts believe (again, Q1 GDP will be revised higher), and in an expanding economy growth is the key.
DJ30
Volume dropped on DJ30 as well after a Wednesday distribution session. The three new additions didn't help or hurt. The Dow tapped the 50 day MVA (10,385) on the low then managed to cut some losses. It traded in a 110 point range and then finished near the middle. Similar to SP500, DJ30 is easing back after a short double bottom base. The 50 day MVA is where it needs to hold on the test to keep the pattern in tact. Still wanted a longer base, but it will probably play follow the leader again if NASDAQ, SOX and SP600 take off again.
Stats: -38.12 points (-0.36%) to close at 10442.03
Volume: 188 million versus 218 million Wednesday.
The chart: http://www.investmenthouse.com/cd/^dji.html
MONDAY
Lots of action this week. Earnings will dominate but economic data abounds with retail sales, CPI, regional manufacturing, housing, production and capacity. After a holiday week with light volume, this coming week will be very key to the market as it tries to continue its pullback and then make its breakout.
Earnings always raise the risk if not on an overall scale then with respect to individual stocks. If a stock misses, it is toast. If it beats with ease, it is toasted. Stocks ran higher off the bottom of their bases two weeks back in anticipation, and are now edging sideways trying to figure out if they need to rally more or do a groundhog and go back into hibernation for 6 weeks. This point after the shakeout is the moment of truth for the market; will it breakout on continued anticipation of further economic growth (i.e., is guidance overall going to be as good as YHOO, DNA, RIMM and the retailers say?), or will it figure prices are just right for the rate of expansion and slip back down?
The accumulation in NASDAQ and leading stocks, the good technical patterns, and the climate of worry (terror, war, deficits, taxes, gas prices) tell us it is setting up for the former and not the latter. There are some trouble spots such as retail that announced great results Thursday but was punched pretty hard. Moreover, the level of gloom is not as high as it was in early 2003 with the Iraq war looming, and we cannot expect the same kind of run from a breakout that we saw in 2003 when the market really caught stride after ending the long downtrend. With an expanding economy, however, the market is still going to move higher and follow earnings growth.
Support and Resistance
NASDAQ: Closed at 2052.88
Resistance: Breakout from the pattern is 2080. 2089 is the February closing high. 2112 is the early January high. 2154 is the January high.
Support: The simple 50 day MVA (2017) is possible with the 10 day MVA (2028) bolstering that level. The exponential 50 day MVA (2010) along with the 18 day MVA (2012). Then a jumble of support merges near 2000. 2000, the top of the late 2003 base. Some prices from the recent March consolidation attempt (1943). Mixed tops and bottoms at 1900. The 200 day MVA (1909).
S&P 500: Closed at 1139.32
Resistance: 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: The simple 50 day MVA (1133) and the 10 day MVA (1134) have merged. 1125, still a key level. The exponential 50 day MVA (1126). 1106 is a May 2002 top and represents some early 2001 lows. 1096 to 1100. 1075 to 1070 from the December consolidation.
Dow: Closed at 10,442.03
Resistance: September/November up trendline (10,600) along with price consolidation at that same 10,600 level. 10,747 is the February high.
Support: The simple 50 day MVA (10,455) is holding. Then the 10 day MVA (10,420). The exponential 50 day MVA (10,385). The 18 day MVA (10,386). 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.
4-13-04
Business inventories, February (8:30): 0.3% expected, 0.1% January.
Retail sales, March (8:30): 0.7% expected, 0.7% February.
Retail sales ex-auto: 0.6% expected, 0.0% February.
4-14-04
Trade balance, February (8:30): -$72.5B expected, -$58.9B January
CPI, March (8:30): 0.3% expected, 0.3% February.
Core CPI: 0.2% expected, 0.2% February.
4-15-04
Initial jobless claims (8:30): 335K expected, 328K prior.
NY Empire State PMI, April (8:30): 28.5 expected, 25.3 March.
Philly Fed PMI, April (12:00): 26.0 expected, 24.2 March.
4-16-04
Housing starts, March (8:30): 1.9M expected, 1.855M February.
Permits, March (8:30): 1.905M expected, 1.909M February.
Industrial production, March (9:15): 0.4% expected, 0.7% February.
Capacity Utilization, March (9:15): 76.8% expected, 76.6% February
Michigan preliminary sentiment, April (9:45): 97.0 expected, 95.8 March.
THE PLAYS:
Wednesday night play results:
SOX: Still looks ready.
BBOX: Volume was up as it tried the breakout, but not enough.
GNLB: Volume backed off and it could not continue the breakout move.
PHMD: Gapped higher but volume was not there so it backed down. Still looks solid.
New Plays:
Upside:
Play Date: 04/09/2004
ABTL (Autobytel--$14.29; 0.02; optionable): Internet auto services
http://biz.yahoo.com/p/a/abtl.html
STATUS: Double bottom w/handle. Forming a very nice handle to its short 6 week base that formed following the breakout from an earlier 12 week base. These combination bases tend to really weed out the sellers and set the stage for a solid advance. The recent base formed over the 50 day MVA (13.02), a sign of support. It also shows solid 3 to 0 accumulation in the pattern (3 up price weeks on rising volume to 0 down price weeks on rising volume), a sign that money has moved into the stock even as it corrected and formed the base. Solid money flow and relative strength is ready to break out. Volume jumped Thursday as the stock showed a very tight doji that tapped the 10 day MVA on the session low and then rebounded. Solid pattern ready to breakout once more.
Volume: 1.026M Avg Volume: 573.136K
BUY POINT: $14.75 Volume=860K Target=$17.75 Stop=$13.72
POSITION: BCU HC - Aug. $15c (48 delta) &/or Stock
http://www.investmenthouse.com/ci/abtl.html
Play Date: 04/09/2004
ALGN (Align Tech--$20.42; -0.16; optionable): Medical appliances
http://biz.yahoo.com/p/a/algn.html
STATUS: Double bottom w/handle. After a very strong run in 2003, ALGN peaked in late January and started forming the current 10 week base. Accumulation in the base is an excellent at 5 to 0 (5 up price weeks on rising volume to 0 down price weeks on rising volume). That shows money is still moving into the stock even after its long run. It is currently pulling back to form the handle, holding over the 10 day MVA (20.04) as it does The 10 and 18 day MVA (the short term MVA) typically act as support for handles in strong bases.
Volume: 517.974K Avg Volume: 468.818K
BUY POINT: $21.28 Volume=703K Target=$25.62 Stop=$19.88
POSITION: CUA GD - July $20c (59 delta) &/or Stock
http://www.investmenthouse.com/ci/algn.html
Play Date: 04/09/2004
NMSS (Natural Microsystems--$7.60; +0.42; no options): Telecom processing systems
http://biz.yahoo.com/p/n/nmss.html
STATUS: Cup w/handle. NMSS is moving in a 11 week base over the 50 day MVA (6.99), coming up off the lows the past few weeks. It has eased back last week and then was starting back up Thursday on stronger, almost average volume. It is giving the indication that it is ready to make the breakout. Excellent 5 to 0 accumulation in the base showing money moving into the stock as it rests. Money flow is starting to surge higher ahead of the stock price. It looks ready to make the move.
Volume: 315.97K Avg Volume: 394.59K
BUY POINT: $7.84 Volume=592K Target=$9.42 Stop=$7.25
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ci/nmss.html
Play Date: 04/09/2004
RIMM (Research in Motion--$105.49; -2.49; optionable): Communication services. Splits 2:1 on 6-17-04.
http://biz.yahoo.com/p/r/rimm.html
STATUS: Breakout test. A market leader, RIMM is just coming off of another strong run off the 50 day MVA into its earnings report Wednesday night. It had put on a strong move into the number so we were not inclined to play a pre-announcement on it; it ended up selling off, but it managed to recoup over $3 of its intraday loss. Indeed, it tapped the 10 day MVA on the low (102.12) and rallied back on some strong volume. We still think it might make another test of the 10 day, snugging up to that level before making the next bounce. Given the rebound Thursday, however, we will be ready to move in on an upside rebound from here.
Volume: 9.643M Avg Volume: 5.661M
BUY POINT: $106.25 Volume=8.5M Target=$122 Stop=$101.44
POSITION: RUP FA - June $105c (56 delta)
http://www.investmenthouse.com/ci/rimm.html
Play Date: 04/09/2004
TGA (Transglobe Energy--$2.90; -0.02; no options): Oil and gas
http://biz.yahoo.com/p/t/tga.html
STATUS: Double bottom. A new issued in November, TGA rallied to 3 and then started its first base, the current 11 week double bottom that has been forming along the 50 day MVA (2.50). Accumulation in this base is an excellent 5 to 1. Volume has been jumping the past two weeks, particularly Wednesday and Thursday last week. It looks ready to make its first breakout. Another milestone. We are going to be ready for it.
Volume: 548.6K Avg Volume: 391.363K
BUY POINT: $3.06 Volume=585K Target=$3.85 Stop=$2.84
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ci/tga.html
Good movers Thursday: CPTV; DNA; HMP; IMX; INTV; IVIL; NVTL; UBET; XRIT; AZO
End part 2 of 3
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us stock market
stock prices
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