|
|
us stock market, stock watch
Begin Part 2 of 2
TOMORROW
The Dow and S&P are in fact testing their 50 day MVA as anticipated in the weekend report. We have had some great put plays in the reports and we will most likely get some more downside tomorrow morning as the downward momentum continues from the close. That may be all this downside move gives us, however, as we have seen many key stocks holding their own in the selling. An intraday test lower will most likely be the point to go ahead and close some put positions and covered call positions in anticipation of at least an interim bounce.
Retail sales are out in the morning. They are expected to be better, but not stellar overall. If better than expected, the morning downturn may not be as severe, but we will send out a pre-market alert to give that last minute perspective heading for the open.
The first step of the action for the week has transpired, i.e., the test of the 50 day MVA. Now we see if WMT, IBM, NVDA, the Dow, the S&P 500 can turn it back upside on strong volume at this point. The mood has shifted to a more negative bias, but we see the volume not racing higher on the selling and we see the put/call ratio jump back up on today's action. The rising anxiety has triggered more upside action during this rally. We also have earnings starting in earnest tomorrow. The stage is set for a rally if investors are willing to take the ball and run with it. We think there is a good enough prospect for the bounce that we will be closing out some downside puts and covered calls on early selling.
Support and Resistance
Nasdaq: Closed at 1990.74.
Resistance: Potentially 2000. The December intraday high remains unconquered (2065.69), and it now also has the January intraday high at 2098.88. The up trendline is at 2150. Then 2250 to 2300.
Support: The March 2000 down trendline held on the low today at 1980, now at 1970. Then there is the 50 day MVA at 1940.25, right at the support range of the tops of the prior consoidation at 1934 to 1941 (the tops of the November consolidation).
S&P 500: Closed at 1138.41.
Resistance: 1150 is some resistance in conjunction with the 18 day MVA (1151.23). Above that is the 200 day MVA at 1167.10. Then the December high at 1173.62 followed by the hump in the March double bottom at 1183.35.
Support: The 50 day MVA is roughly holding right now (1139.78). Below that is 1125, good support, and the March 2000 down trendline is 1127.
Dow: Closed at 9891.42.
Resistance: 10,000 could act as some psychological resistance, but the 200 day MVA is still the level to cross (10,104.73). Then the early January highs at 10,300 are tough. The entire 10,200 to 10,500 is the trading range from June to August 2001 and represents resistance. The down trendline from January 2000, the all-time high, is moving right at 10,500.
Support: The 50 day MVA at 9906.77 is trying to hold on. Below that 9.750 is some support. 9500 has proved solid on this entire rally.
Weekly Economic Calendar (All times Eastern). The figures are the consensus expectations, not ours.
1-15-02
Retail Sales, December (8:30): -1.1% versus -3.7% prior.
Retail Sales ex-auto, December (8:30): 0.0% versus -0.5% prior.
1-16-02
CPI, December (8:30): 0.1% versus 0.0% prior.
Core CPI, December (8:30): 0.2% versus 0.4% prior.
Business Inventories, November (8:30): -0.5% versus -1.6% prior.
Industrial Production, December (9:15): 0.0% versus -0.3% prior.
Capacity Utilization, December (9:15): 74.6% versus 74.7% prior
Fed's Beige Book (2:00)
1-17-02
Initial Claims, (8:30): 395K versus 395K prior.
Housing Starts, December (8:30): 1.610M versus 1.645M prior.
Building Permits, December (8:30): 1.570M versus 1.595M prior.
Philadelphia Fed, January (12:00): 0.0 versus -12.6 prior.
1-18-02
Trade Balance, November (8:30): -$28.5B versus -$29.4B prior.
Michigan Sentiment-Preliminary, January (9:45): 89.6 versus 88.8 prior.
SUBSCRIBER QUESTSIONS and TEAM TRADES
Due to some data loss as we were preparing to send out the reports, we do not have tonight's questions and trades. We apologize and will have more tomorrow. If we can recover the data we tonight we will send them later.
PLAYS TO LOOK AT: Great breakout by MOGN, and ACF, ERTS, NDN and THQI made solid downside moves for our put plays! Pre-split SYMC looks good!
BONUS PLAYS: CLKB and QMDC are still in good position.
NITE (Knight Trading Group--$11.87; -0.45; optionable): Investment brokerage.
http://biz.yahoo.com/p/n/nite.html
STATUS: NITE has come back to test its 50 day MVA (11.72), today taking out its 200 day (12.18) as it continued to drop on light volume (714,900; average 1.3 million). NITE has made some impressive bounces from the 50 day, and we like the price/volume action, showing very big volume on the recent bounce up. This evening we got some good earnings news and outlook from E-Trade, and NITE was up after hours. Looks good for a jump, and on a move over the 200 day on above average volume we can look at playing the move. The recent high was 13.97, and we are targeting that level initially.
BUY POINT: Over the 200 day on above average volume. Stop: 11.44 (7%).
POSITION: April $10 calls to buy (QTN DB).
OSIS (Osi Systems--$19.84; +2.94; optionable): Semiconductor equipment.
http://biz.yahoo.com/p/o/osis.html
STATUS: Announced good earnings and a solid outlook, and OSIS made a solid bounce up from its 50 day MVA (16.62) Monday. OSIS made a good move from September lows near 4 up to a high of 23.46 in December (closing high 21.90), and has formed a pennant since November. A very nice move today, with volume very strong at 1.83 million (average 644,000), and we can look at taking positions on a continued move, targeting 26.
BUY POINT: A move over 20.25 on continued strong volume. Stop: 18.83 (7%).
POSITION: Stock and/or April $17.50 calls to buy (UOJ DW - under 100 open interest).
MARKET FAVORITES:
ORCL (Oracle--$16.39; +0.12; optionable): Application Software.
http://biz.yahoo.com/p/o/orcl.html
STATUS: Trying to work its way up in a deep base, ORCL broke out of its October-December range (13-16) last week. The move was very strong, a gap up on big volume that hit up to 17.25 before pulling back. ORCL eased back a couple of sessions, today gapping back to former pattern highs at 16 but pushing back up from that level. Volume was lower at 36.5 million (average 41.4 million), and the stock pulled back from 16.68 to close. However, this has been a nice test, and we will look for more volume to push the stock over the recent high in some market strength. Initial target: 20
BUY POINT: Over 17 on above average volume. Stop: 15.92 (7%; 200 day at 15.54).
POSITION: March $15 calls to buy (ORQ CC).
AMD (Advanced Micro Devices--$19.61; +0.46; optionable): Semiconductor.
http://biz.yahoo.com/p/a/amd.html
STATUS: AMD has formed a cup deep in its base, and broke out of a handle in early December, taking out its 200 day MVA (19.21) on that move. It tested the breakout and moved back below the 200 day, but today made it back over that resistance as volume moved back over the average (8.45 million; average 6.5 million). This test forms another nice handle, and we are looking for a breakout. The handle high of 20.60 is a the level of AMD's long-term down trendline (connecting June 2000 and May-July 2001 closing highs). Target: 25.
BUY POINT: 20.72 on volume of 9.75 million. Stop: 19.27 (7%).
POSITION: April $17.50 calls to buy (AMD DW).
PRE-ANNOUNCEMENTS: Some forecast for this week, but as discussed below, we need to watch them closely.
DHR ($63.06; -0.63): Forecast to announce a split on 1-24-02 before the open with earnings; however, the company has declared a quarterly dividend which could make a split announcement less likely. Pulled back after Friday's attempted move, coming back again on lower volume (838,900; average 1.24 million). A tough session to breakout, but it certainly did not tank back. We are still looking for a breakout, with the buy point at 64.37 on volume of 1.7 million, with stock and/or March $60 calls to buy (DHR CL).
DRI ($37.16; -0.35): We are working on a date. We liked the volume on the breakout last week, and DRI has tested the move and shown several dojis in its lateral pattern, holding its 10 day MVA (36.91). With the good price/volume action (down to 263,200 today; average 670,000), we are looking for a move over the recent high, with a buy point of 38.51 on volume of 700,000, with stock and/or April $35 calls to buy (DRI DG).
NDN ($34.30; -1.50): Got the move down, with NDN falling through its up trendline (36) and its initial buy point (35) with rising, strong volume of 539,000 (average 361,000). With the increased selling volume, this is still a good opportunity for new or additional positions for a play down to the 200 day MVA (31.77). From here or after a bit of a test back up, a drop through 34 on continued strong volume, with February $40 puts to buy (NDN NH).
GNSS ($67.14; -4.97): Forecast to announce a split with earnings, on January 17 after the close. Did not hold up, getting hit hard today on increased volume (2.7 million; average 2.53 million) and closing back below the support of its 18 day MVA (67.55). Not the move we like to see, although GNSS has made quite a run going toward the split. We are not hanging around to watch a further drop toward earnings (50 day MVA at 67.13).
DIAN ($55.46; +2.06): Forecast to announce a split in 1-17-02 with earnings. At this time the company cannot confirm this date. Hit the aggressive buy point on a 50 day MVA (52.48) bounce, taking out its 18 day MVA (54.87). Going into earnings Thursday we will carefully ride positions, protecting profits. We are not wanting to chase the bounce much higher, but we can still look at aggressive positions on a move over 56 with increased volume of 300,000, and stock and/or February $50 calls to buy (UID BJ - very low open interest).
ETH ($40.35; -0.76): Forecast to announce a split on 1-17-02 before the market opens with earnings. Did not get the bounce from the 18 day (54.87), as instead ETH fell through that support. Volume was weak, however (102,700; average 226,400), so we will see if it can hold its November-December highs at 40. However, this was a troubling move, and we will need to see a lot of strength to get involved. Over 42 on volume of 300,000, with stock and/or February $40 calls to buy (ETH BH).
PRE-SPLITS:
SYMC ($70.38; -0.37): Splits 2:1 effective February 1. Has pulled back off of last week's strong breakout move, but is holding the prior high and 10 day MVA (69.87). Today it tapped down to the 18 day MVA (68.78) but recovered for a doji, and volume took off to 3.83 million (average 2.5 million). With the high volume doji over support, SYMC looks good for a solid bounce. On a move over 71.50, stock and/or February $70 calls to buy (SYQ BN).
HOTT ($33.71; +0.23): Splits 3:2 effective February 6. Tried a move up toward the handle highs today, but it pulled back to close with another loose doji. Volume did not push it, coming in down at 438,600 (average 878,000). Still looking for the breakout, and on a move over 34.69 on volume of 1.3 million, stock and/or February $30 calls to buy (UHO BF).
XRAY ($50.53; -0.16): Splits 3:2 effective February 1. Pulled back slightly, holding its lateral (although it drifted up a bit last week) consolidation over the 10 day MVA (50.23). The stock is trying to make a move on the recent high (52.03), but has been unable to hold the intraday highs. Still looking for a sustained move but now watching existing positions carefully for a possible breach of support. On a move over 52 on increased, above average volume stock and/or January $45 calls to buy (XAQ AI). Stop: 48.
CONTINUING CANDIDATES: THC broke out with big volume, so we are riding toward the target but protecting profits carefully with trailing stops. EDS hit the buy point but did not have the volume; however, it is still weak and we are looking for it to continue down.
APPB ($33.25; -1.67): APPB could not hold its 18 day MVA, and stopped us out of remaining positions with a drop Monday that came on considerably higher volume (525,800; average 420,000). It took out its 50 day MVA (33.74), and closed near support from its former cup with handle highs and December closing lows. At this point we can 'flip' the play to the downside; if we had not been stopped out on this move, we could see a test of the 50 day which could provide a better exit point, and then look to the downside on the failure of that move. On a drop through 33 on increased volume, February $40 puts to buy (AQB BH).
POST-SPLITS: FMBI tanked going toward earnings, and CACI dipped back through support toward the lows in its recent wedge.
Good Investing!
Jon L. Johnson and the Stock Split Report 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.
|
us stock market
stock watch
|
