us stock market, stock trading information

Begin Part 2 of 4

Support and Resistance

Nasdaq: Closed at 1731.49.
Resistance: 1775 remains resistance from the October closing high. The March 2000 down trendline is at 1780. The January 2002 downtrend is now at 1774. The bottom of November consolidation at 1875. The 50 day MVA follows at 1859.46.
Support: The November gap up point at 1745 is trying to hold as some support. 1700 has held loosely. After that, there is not much until 1626, the early October gap up point and the April 2000 intraday low at 1619.58.

S&P 500: Closed at 1106.73.
Resistance: The 50 day MVA (1116.83) is still holding the index back as it did in late January and mid February. Price consolidations at 1125 where the index stopped stalled earlier in the month (the middle of the potential double bottom) and the hump of the potential double bottom. The simple 50 day MVA is also right there at 1126.58.
Support: 1100 can act as support and did again on Wednesday and Thursday. Then 1075 to 1080 continues to hold tough, right at the March 2001 intraday low. There is a jumble of prices in a range from 1075 to 1050. 1050 was tested twice in October, holding both times. 50% retracement (1060).

Dow: Closed at 10,106.13.
Resistance: December highs from 10,170 to 10,184. Then resistance comes in again at 10,250 up to the January high at 10,300 (June, July and August 2001 trading range). After that, 10,500 is the top of that range.
Support: The 200 day MVA (10,036.26) and 10,000. Then 9730 is the first January low and has provided some support. There is some support at 9691, the bottom of the November, December and January range.

Weekly Economic Calendar (All times Eastern). The figures are the consensus expectations, not ours.

2-28-02
Initial Claims, 2/23 (8:30): 378K actual versus 385K expected and 361K prior (revised from 383K).
GDP, preliminary Q4 (8:30): 1.4% actual versus 0.9% expected and 0.2% prior.
Chain Deflator, Q4 (8:30): -0.3% actual versus -0.3% expected and -0.3% prior.
Chicago PMI, February (10:00): 53.1 actual versus 47.0 expected and 45.1 prior.
Help-Wanted Index, January (10:00): 47 actual versus 46 expected and 46 prior.

3-01-02
Truck Sales, February: 7.1M versus 7.1M prior.
Auto Sales, February: 5.3M versus 5.3M prior.
Personal Spending, January (8:30): 0.4% versus -0.2% prior.
Personal Income, January (8:30): 0.1% versus 0.4% prior.
Mich Sentiment-Rev., February (9:45): 91.0 versus 90.9 prior.
ISM Index, February (10:00): 51.0 versus 49.9 prior.
Construction Spending, January (10:00): 0.1% versus 0.2% prior.

SUBSCRIBER QUESTIONS

Q: Where do you get your information on the Put/Call Ratio (CBOE)?

A: The CBOE website contains a summary of daily activity. It can be found at www.cboe.com under the 'Market Data' heading.

Q: [There has been an increased] noise level very recently about US troops moving into Iraq and Turkey. I would really like to hear your take on market reactions if/when there is an escalation on the part of US. It seems imminent that this is the situation. I'd like to be better prepared to know how to prepare and respond for such an event!

A: The rumors have been flying, and have struck two times when the indexes were having decent rallies. Short sellers have good timing. Anyway, if we do send troops into Iraq there will be uncertainty. Uncertainty about a new campaign while another is still ongoing, uncertainty about reprisal attempts, uncertainty about the outcome. The stock market hates uncertainty and they would most likely suffer selling as investors take money off the table and reallocate into some gold and cash. Gold stocks may perform a bit better at first and defense stocks as well. In the 1990 invasion of Kuwait gold spiked higher but then pulled back rather quickly. How fast a recovery comes depends upon the campaign's success. As we saw in 1991 and in 2001, if the success is apparent, the stock market starts to price that in.

TEAM TRADES

BRCM: One of the many techs that rolled over Wednesday and continued today. We were looking at a buy point at 31.90. After testing 33.25 twice early in the session on the early rally it started to roll over with the index. Now an earlier put play hit the target at 32. The stock then hit our next buy point at 31.90, running down fast to 31.50. It bounced after the big drop as most stocks and indexes do, back up to 32 (32 was a point of some support, and that is why the other put play had that as a target). It failed to move over that level and we entered downside positions at 31.98. The May 40 puts were trading 10 by 10.20. We slid a limit order in at 10.20 and that was good enough. The stock then started its descent, hitting 31 and bouncing back up, then heading to the next level, down to 30. Another bounce and then it sold again. It did not make it down to 30 again, holding at 30.50. The options ended the session at 10.80 by 11.

THE PLAYS: Nice breakout by MGAM! HTLD got hit by a valuation downgrade, and its breakout was ruined.

BONUS PLAY: APD gapped up and reversed, so could be coming back to test the move. BAX slowed but held the short-term MVA's.

APA (Apache Corp--$52.75; +0.45; optionable): Energy.
http://biz.yahoo.com/p/a/apa.html
STATUS: APA formed a big reverse head and shoulders pattern over June-December, but failed to break out on its December attempt, falling back to form a cup. APA broke from a small handle last week, making a nice move up before resting the last few sessions. Today the stock showed a loose doji after reaching up to 53.45 at its high (former breakout high had been 53.24). Looking good, and we will see if it continues to consolidate and tests the 10 day MVA (51.63). From there we will look for a bounce and then breakout. Target: 62.
BUY POINT: Test: After a tap back to the 10 day, a move over 52.50 on volume of 2 million (average 1.6 million; today 1.58 million). Stop: 48.92 (7%). Breakout: 53.55 on volume of 2.4 million. Stop: 49.80 (7%)
POSITION: Stock and/or July $50 calls to buy (APA GJ)

CLS (Celestica--$32.90; -2.81; optionable): Computer peripherals.
http://biz.yahoo.com/p/c/cls.html
STATUS: On a steady downtrend that is turning more and more sour. CLS took a strong drop last week, finding support around 32 (low 31.76), and making a bounce this week on reduced volume. Reduced until Wednesday, that is, when CLS pulled way back from its high over the 10 day MVA (35.18), and after that topping sign the stock tanked back toward the recent low today. Volume continued to be strong at 4.24 million (average 2.39 million), and we are looking for CLS to take out the recent low and move down to a target of 25.
BUY POINT: Through 32 on continued strong volume.
POSITION: April $40 puts to buy (CLS PH)

Quick updates prior bonus plays.
IR - Could take a rest here after the impressive run.
UPS - Doji under one of its long-term trendlines; we will see if it pulls back or takes it out.
NCOG - Still neat-o, holding up in its consolidation after the weak breakout attempt.
WTSLA - Doji could signal a pullback after the run.
ROST - Holding in the pattern.
IDTI - Hard move down on the put!
RMCI - Holding up nicely after a strong move.
DRIV - Put play driving down toward its 200 day MVA (the target, at 10.25).
ANSI - Big move through the 50 day, but weak volume. We will see.
ATK - Candlestick today indicates a pullback.

MARKET FAVORITES: BRCM, ALTR, PWAV, NEWP all dropped hard on put plays!
1) CDWC - Ready to tank
2) ISSX - Fell through support

CDWC (Cdw Computer--$52.80; +0.46; optionable): Computers wholesale.
http://biz.yahoo.com/p/c/cdwc.html
STATUS: After giving up the 50 day MVA (52.96) and tapping near the 200 day 45.62) on a recent drop, CDWC has come back up to test the 50 day. Volume has been lighter on the move up, a sign of weakness, and CDWC has inched up the last few sessions, showing a doji Thursday just under resistance. Volume was up at 1.2 million (average 996,100), and the stock looks poised for a fall. Targeting the 200 day on a put.
BUY POINT: In a weak Nasdaq, a drop through 51.50 on increased volume.
POSITION: April $55 or $60 puts to buy (DWQ PK or DWQ PL - only 1 open contract for the $60's).

ISSX (Internet Security--$23.71; -2.26; optionable): Telecommunications.
http://biz.yahoo.com/p/i/issx.html
STATUS: Has been in a severe downtrend for all of February, dropping from the 40 level. It found support last week at 25, tapping that level at its intraday lows several times, but after failed attempts at its 10 day MVA (28) yesterday, ISSX dropped very hard through the support at 25, with volume way up at 15.5 million (average 2.55 million). It pulled up from a low of 22.21, so could set up for a test of 25, but we look for that to fail and for ISSX to drop to a target of 18.
BUY POINT: From here or after a bit of a test higher, a drop through 23 on continued strong volume.
POSITION: April $30 puts to buy (ISU PF).

Quick updates of prior Market Favorites:

CHKP - Continued down toward the target of 25, watching recent lows at 27.
SRNA - Nice drop on the put play!
YHOO - Still holding over 14, but looking for that support to give way.

PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: No announcement from INVN, which is hanging in its consolidation.

NEW PRE-ANNOUNCEMENT PLAY:

KRI (Knight-Ridder--$67.40; +0.50; optionable): Newspapers. Forecast to announce a split on 4-24-0 before the open. There is also the shareholder meeting the next day at 9:30 PT.
http://biz.yahoo.com/p/k/kri.html
BACKGROUND: Last announced a 2:1 split in July 1996 at a stock price of approximately $70. The company has sufficient shares for a 2 for 1 split.
STATUS: KRI made a very nice breakout to a new high last week, running out of a handle-type consolidation formed after the stock had fought back from a test near its 200 day MVA (60). Since the breakout, KRI has tested back to its 10 day MVA (66.53), using that level as support as forms a nice pennant pattern. After tapping back to support Wednesday, KRI moved up slightly today, but volume was down at 273,100 (average 406,000). Looking for the breakout, and set up well. Solid money flow. Target: 80.
BUY POINT: 68.10 on volume of 540,000. Stop: 63.75. New high: 68.83 on volume of 540,000. Stop: 64 (7%).
POSITION: Stock and/or July $60 calls to buy (KRI GM - under 50 open interest).

PRE-ANNOUNCEMENT BEST PLAYS: Also looking at BER, EXPD and GTK.
1) CYN - Still strong in the pattern
2) PDCO - Looking for another bounce
3) DRYR - In a handle to the small pattern
4) MUR - Looking to pull back and reload
5) ESI - Hit the buy point but needs volume
6) DHI - Holding up after the initial breakout move
7) SLM - Setting up

Many of these have either made their first move and need a pullback or are setting up their next move.

CYN (City National--$50.822; +0.52; optionable): Regional bank. Researching a split date for this stock.
http://biz.yahoo.com/p/c/cyn.html
BACKGROUND: Based upon our research it appears that CYN split its stock in 1990 in the $40 range. The company has sufficient shares for a 3 for 2 split.
STATUS: Got some volume today as CYN moved up in its ascending wedge from the pattern support at the 18 day MVA (50.15). CYN has been looking good, breaking from a cup in January that it had formed since August. On that move it hit a high of 51.65 before testing its 50 day (then 47, now 48.68). The wedge pattern formed after a move on the high, followed by a retreat that held higher support at the 18 day. Looking for a breakout. Excellent relative strength, money flow and buying. Target: 60.
BUY POINT: 51.75 on minimum volume of 260,000 (average 203,000; today up to 301,700). Stop: 48.13 (7%).
POSITION: Stock and/or May $45 or $50 calls to buy (CYN EI and CYN EJ - under 100 open interest for the $45's).

PDCO (Patterson Dent--$40.57; +0.08; optionable): Medical equipment wholesale. Researching a date.
http://biz.yahoo.com/p/p/pdco.html
BACKGROUND: Announced a 2:1 split on 6-14-00 at a price of $53, and announced a 3:2 split on 1-12-98 at $45.
STATUS: Made a strong bounce from the 50 day MVA (40.01) last Friday, but pulled right back, showing some erratic behavior. It continues to hold the 50 day, however, as it has done twice since early January. However, it has encountered some resistance at the 41-41.50 level, hitting there in late January and early this month, and also on the most recent bounce. Today PDCO closed with a third consecutive loose doji right at its short-term MVA's (40.55), and volume spiked way up to 457,500 (average 256,000). Looking for another bounce that it can hold, and take out its high at 42.05 (late December). Targeting 48 on a move to a new high.
BUY POINT: Over 41.50 on continued strong volume. Stop: 38.69. New high: 42.15 on continued strong volume. Stop: 39.20.
POSITION: Stock and/or July $40 calls to buy (DOU GH - low open interest).

DRYR (Dreyers Grand Ice Cream--$43.71; -0.49; no options): Forecast to announce a split with earnings on 4-24-02 before the open.
http://biz.yahoo.com/p/d/dryr.html
BACKGROUND: Last announced a 2:1 split on 10-27-97 at a price of $42. Before that it announced in October 1990 at about the same price range. The annual shareholder meeting was on 5-9-01 at which time no additional shares were authorized. The company has sufficient shares for a 3 for 2 split.
STATUS: Trying to break to a new high, but might need a rest. DRYR broke from a large cup with handle pattern in December, and hit a high of 44.88 before testing back to its 50 day MVA (currently 40.08). A couple of bounces from that level formed a 'flying w' pattern, and it started to form a handle as it challenged its high this week. Wednesday DRYR hit a new high with good volume, but pulled back with the market to close, and today managed to hold up well, dropping back a bit on much lower volume (382,400; average 246,600). We still could get more of a pullback and rest here, and a low volume dip back could allow it to form a better handle from which to spring on its next move. We will look for the stock to hold up over the 10 day MVA (42.30) as it pulls back on low volume. Target: 50.
BUY POINT: After holding 42-43, the breakout is 44.98 on volume of 370,000. Stop: 41.83. Aggressive: After holding support at 42-43, a move back over 44 with volume of 300,000 or better. 41.50.
POSITION: Stock only.

MUR (Murphy Oil--$85.46; +1.16; optionable): Working on a new date.
http://biz.yahoo.com/p/m/mur.html
BACKGROUND: Based upon our research it does not appear that MUR has ever split its stock. Authorized shares were increased at the last shareholder meeting.
STATUS: MUR has shot up in recent sessions, but the move has tapered off considerably, showing smaller gains that culminated in a doji today, as volume fell off (211,200; average 252,000). MUR tapped at 87 today, near the high of 87.85, but that resistance looks like it will push MUR back down to set up for the next run. We will look for it to hold the former highs in the 85 range, and from there make a move to take out its high.
BUY POINT: After it settles back and holds the 85 level or better, new positions on a move to a new high over 87.85. Stop: 81.79 (7%).
POSITION: Stock and/or July $85 calls to buy (MUR GQ).

ESI (ITT Educational Services--$44.05; +0.48; optionable): Education & Training. Working on a date.
http://biz.yahoo.com/p/e/esi.html
BACKGROUND: Based upon our research it does not appear that ESI has ever split its stock.
STATUS: Tried to move out of the pattern today, but no volume. ESI recently broke over the October-November highs at the end of January (which made the left side of a saucer), and now is battling the July high (46.25), which is the left side high of something of a cup pattern (with the deep September dive preceding the saucer). ESI formed a handle consolidation that held the 18 day MVA (42.45), but after testing that level today it could not sustain a move up, suffering from weakness of volume (125,600; average 138,500). Still watching for volume to kick in a provide punch for a move at the target of 52.
BUY POINT: From here or after a low volume test of the 18 day, 44.50 on volume of 200,000. Stop: 42.
POSITION: Stock and/or July $40 calls to buy (ESI GH - no open interest as yet).

DHI (D.R. Horton--$39.90; +0.39; optionable): Residential construction. Forecast to announce a split with a board meeting on 2-26-02.
http://biz.yahoo.com/p/d/dhi.html
BACKGROUND: Last split 7:5 in September 1995 at $15.
STATUS: Broke out nicely Tuesday, but DHI has not been able to continue the move. After testing all the way back to the 10 day MVA (38) Wednesday but pulling back up for a 'hanging man' doji, DHI was giving indications of a quick pullback. However, it is hanging in there, today showing another loose doji as volume dipped back to 1.62 million (average 1.07 million). We are targeting 45 and the upper channel trendline is just over 42, so we will see if it can continue the move or if it needs to test the breakout.
BUY POINT: Riding current positions toward the target. If we get a test back on lower volume that holds 38, we can look for another strong move back over 39 with volume in the 1.5 million range.
POSITION: On the test and bounce: Stock and/or May $35 calls to buy (DHI EG).

SLM (USA Education--$92.75; 0.00; optionable): Researching a new date, and looking at a board meeting that our research shows will be in early April.
http://biz.yahoo.com/p/s/slm.html
BACKGROUND: Last announced a 7:2 split on 11-21-97 at a price of $132. The annual shareholder meeting 5-10-01 at which time additional shares were authorized.
STATUS: Still holding up after its solid January and early February move, looking to form an ascending wedge. Tuesday SLM tried a move, hitting a new high at 94.35 before pulling back to close with a 'tombstone' doji. It has only grudgingly given up ground, however, showing consecutive dojis over the 10 day MVA (92.11) as volume falls (down to 455,600 today; average 760,900). Looking for SLM to hold the 10 day and make a higher low, setting up for a strong move out of the pattern. The stock is battling an upper channel line at 94, but on a breakout of this pattern SLM will take out that line and make a run up to our target, which stays at 105.
BUY POINT: 94.45 on volume of 1 million. Stop: 90.
POSITION: Stock and/or July $90 calls to buy (SLM GR).

End Part 2 of 4

us stock market
stock trading information