These Stocks Are A Primary Focus
What Thursday’s Action Tells
You
The market action continues to tread water as
the
SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed at 1123.50, +0.3%, on a daily range of just 5.7
points. The
(
QQQ |
Quote |
Chart |
News |
PowerRating) closed at 35.32, +0.2%, as it remains in the 35.68 –
35.12
range. 35.12 is Wednesday’s low, and 35.68 is the .50 retracement to 39 of
the
32.35 low where this current rally started. It was up to 35.57 on the 10:35
a.m.
ET bar, then the contra move took price down to the 480 EMA and intraday low
of
35.12 on the 3:15 p.m. bar, then bounced to a 35.32 close. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating)
went out at 10,249, +0.1%, with the Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) +0.4% to 1904.
NYSE volume was the lowest this week at 1.11
billion. The volume ratio was positive at 66 and breadth +1604, both acting
better than the major index prices.
Most all of the primary sectors were green,
except the
(
SMH |
Quote |
Chart |
News |
PowerRating) which reversed a +1.5% gain to 30.60 on the 10:15 a.m.
bar,
then trading down to the intraday low of 30.03 and closing at 30.08. The
20-day
EMA is 30. The
(
TLT |
Quote |
Chart |
News |
PowerRating) gained +1.1% on an economic report
reflex.
Three of our focus stocks led the XLB basic
industry SPDR.
(
APD |
Quote |
Chart |
News |
PowerRating) was +2.1% on a change-in-direction bar after a
seven-day retracement to the 50-day EMA.
(
PX |
Quote |
Chart |
News |
PowerRating) was +1.3% after the
seven-bar
retracement to its 20-day EMA.
(
ROH |
Quote |
Chart |
News |
PowerRating) was +1.2% on a five-bar retracement
to
the 20-day EMA. All three stocks are “Above the Line” stocks, and
that is why
they have continued to remain on my focus list. You just wait until they
come to
you on a retracement, but you don’t chase new highs unless it is from a
contracted volatility pattern.
For Active
Traders
The SPX jumped up early to the resistance
zone,
hitting 1126.06 on the 10:35 a.m. bar. This was right in the 1125.75 .618
retracement zone to the 1129.46 Tuesday high (see chart), and also, the
1124 –
1125 sequence that you have been aware of from previous commentary. On the
chart, some of you will recognize the RST in both price and on the momentum
oscillator. That is not a significant move for a strong RST pattern, but
because
it was also a retracement zone into resistance, the trade was taken. The RST
was
confluence in this case. The SPX only traded down to 1122.81 before a rally
back
to the .618 line and fading again, trading down to the 480 EMA at 1122.12
before
a new move up to the 1123.50 close. This is the kind of trading that tries
your
patience after a good setup. Not much you can do when the Generals are not
involved in a bigger way. That also means the hedge funds are light because
they
have no one to run ahead of when it quiets down like this.
Today’s
Action
It is option expiration, so it might be a
mixed
bag today with the major indices. Press your scrolling on individual focus
stocks,
(
PCAR |
Quote |
Chart |
News |
PowerRating) and
(
SYMC |
Quote |
Chart |
News |
PowerRating) are two contracting volatility
“Above the
Line” stocks, so watch for a gain there. Some of the semis, like
(
KLAC |
Quote |
Chart |
News |
PowerRating) and
(
NVLS |
Quote |
Chart |
News |
PowerRating) are churning at their 50-day EMAs for the past four days. KLAC
closed at 39.34 vs. the 50-day EMA at 39.64. NVLS went out at 25.74, just
under
the 26.09 50-day EMA. The SMH closed at 30.08, just above the 20-day EMA at
30.
(
MRVL |
Quote |
Chart |
News |
PowerRating) is an “Above the Line” semi and has excellent
volatility and closed
on a three-day pullback from rally highs at 27.46.
(
TER |
Quote |
Chart |
News |
PowerRating) is in a 1,2,3
higher bottom setup, having pulled back three bars from its current rally
high
of 14.95 and closing at 13.49. MRVL and TER are hedge fund favorites because
they can be easily muscled in front of institutional buyers. Net net, if the
semis go green, you can get involved. You certainly know where the SMH
continuation short level is.
In the energy stocks,
(
SLB |
Quote |
Chart |
News |
PowerRating) has
contracted in
a tight range above all of its EMAs, so be ready should energy go green.
Another
energy focus stock,
(
DO |
Quote |
Chart |
News |
PowerRating), that we grabbed crossing 25, is up +21% in 12
days,
so nothing to be done there until a retracement to about 27.
(
CAM |
Quote |
Chart |
News |
PowerRating)
closed at
51.82 after a five-day pullback from rally highs and is also above all of
the
lines.
(
WFT |
Quote |
Chart |
News |
PowerRating) and
(
SII |
Quote |
Chart |
News |
PowerRating) are in narrow-range
patterns near their rally highs. These stocks are sitting ducks for hedge
funds
to break out in front of any real buyers, so they should also be a primary
focus.
I am doing this Thursday night for Friday.
Monday
will be the last commentary until 09/29 or 09/30.
Have a good trading day,
Kevin Haggerty
