5 Stocks You Need To Know For Tuesday
Stocks opened weak, but regained strength during the second hour of the
session. Most of the down movement occurred during the first hour and half. From
there, the markets moved with an upward bias until transitioning into a trading
range during the early afternoon.
The theme harped on by analysts revolved around concerns of how high oil
prices would hurt the economy and thus, the stock market. But ultimately, the
price action told the whole story.
The S&P 500 closed up 3.48 at 1,229.78 and the Nasdaq was up
1014 closing at 2,153.71.
The most notable mover of the day was Apple Computer
(
AAPL |
Quote |
Chart |
News |
PowerRating)
which was up 3% after Piper Jaffray recommended the stock. The chart of Apple
contains an interesting technical setup and that is shown among the charts
below.
Here are five charts from today’s action that may interest
you for Tuesday’s trading. Keep in mind that these are not recommendations. They
are observations from today’s action which you may want to incorporate into your
own research.
Homestore
(
HOMS |
Quote |
Chart |
News |
PowerRating) is exhibiting extreme momentum that
defies what the rest of the market is doing. The stock has had four consecutive
higher closes. Likely most traders will not be inclined to enter until a
pullback occurs. Note that HOMES is a low priced stock whose volatility warrants
caution.
The Oil Service HOLDRS
(
OIH |
Quote |
Chart |
News |
PowerRating) ETF is consolidating within a
four-week uptrend. The pullback toward the 115 level is constructive as it is
now testing support. The continued rise in oil prices may provide some
fundamental impetus for this group. From a technical standpoint, you’ll want to
watch to see if a bounce occurs from this level.
Many traders are focused on Lowes
(
LOW |
Quote |
Chart |
News |
PowerRating) which reported second-quarter
earnings that exceeded analysts’ expectations. But let’s look at what the chart
says. Currently the stock’s price action is contained within a three-week
consolidation. The stock is coming from a strong uptrend that has been in place
for three months. Support is at 64 and resistance is a 67. If the price action
breaks out of this trading range, you might want to look for momentum to
reenter Lowes, possibly to the upside.
Apple Computer
(
AAPL |
Quote |
Chart |
News |
PowerRating) is breaking out above a major resistance level
that has been in place since the beginning of this year. The knee-jerk reaction
of some traders will be to trade the breakout to the upside, but for many swing
traders, Apple is overbought and this could be an opportunity to fade the stock by shorting it.
Microsoft
(
MSFT |
Quote |
Chart |
News |
PowerRating) is coming off it’s lows of the day after
a two-week pullback to short-term support at 27. Volume has dried up during the
drop. This could mean that that the short-term downtrend has not triggered
significant selling and that the stock may be setting up to resume its uptrend.
Good luck in your trading,
Eddie Kwong
Editor-in-Chief
TradingMarkets.com