How The Close May Point The Way
The technology sector is driving the markets
higher today. Investors flocked to tech issues after upbeat comments from
chip-sector leaders Texas Instruments
(
TXN |
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PowerRating) and Novellus
(
NVLS |
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PowerRating).
This positive news helped fuel the optimism about the recovery in corporate
profits. The PHLX Semiconductor sector index
(
$SOX.X |
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PowerRating) is one of
the strongest performing sectors so far today. For a good read on the SOX and
some strategies on how to play this sector read
Kevin Haggerty’s Views From The Trading Desk.
A number of Dow industrial companies also came out with promising results, and
new economic data indicated a strong upturn in the long-suffering manufacturing
sector, while inflation remained benign.
In midday trading, the Dow Jones Industrial Average
(
$INDU |
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177, or 1.8%, to 10271, after falling 97.15 on Monday. The Nasdaq Composite
Index
(
COMPX |
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in the previous session.
Other major indexes were also higher. The S&P 500
(
$SPX |
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PowerRating) gained 20.80 to 1123.40. This has been the strongest day in
about a month on the S&P 500. The June S&P 500 futures have traded as high as
1126.80, a break above their R2 Pivot Point.
Bonds are lower on the day and the dollar is
weaker.
June gold
(
GCM2 |
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PowerRating) is trading slightly
lower today and is the weakest sector today. Gold looks to be forming a cup-and-handle pattern and
has resistance at $305.00 an ounce. June Gold affects
the movement of the PHLX Gold & Silver Index
(
$XAU.X |
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PowerRating) and some of
the gold mining stocks, such as Anglogold
(
AU |
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PowerRating), Barrick Gold
(
ABX |
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PowerRating), Newmont
Mining
(
NEM |
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(
PDG |
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PowerRating),
all of which are trading negative.
May crude oil
(
CLK2 |
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positive today. The Amex Oil Index
(
$XOI.X |
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PowerRating) and the
PHLX Oil Service Index
(
$OSX.X |
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trading at $24.87 a barrel.
The PHLX Semiconductor Sector
(
$SOX.X |
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is off and running. Every stock in the SOX index is positive. Some of the strong movers out of the gate and pushing the SOX
are KLA-Tencor
(
KLAC |
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PowerRating), Novellus Systems
(
NVLS |
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News |
PowerRating), Applied Materials
(
AMAT |
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News |
PowerRating), Broadcom
(
BRCM |
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News |
PowerRating), Texas Instruments
(
TXN |
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PowerRating) and Micron
Technology
(
MU |
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News |
PowerRating). The SOX is trading at 596.34, up 24.72.
The AMEX Oil Index
(
$XOI.X |
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PowerRating) is
trading positive today, due to the positive move by crude oil. Some of the
stocks helping push the XOI higher are Amerada Hess
(
AHC |
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PowerRating), BP Amoco
(
BP |
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Chevron Texaco
(
CVX |
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PowerRating), Exxon Mobil
(
XOM |
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PowerRating) and Total Fina
(
TOT |
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PowerRating).
The XOI is trading at 546.97, up 5.71.
Scios
(
SCIO |
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PowerRating) is breaking above its
resistance to hit a 52-week high. Volume has been increasing. ITRI has a
TradingMarkets.com
RS3 rating of 89
and an uptrending
ADX of 44.
Americredit
(
ACF |
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News |
PowerRating)
is breaking out
of an ascending triangle with strong volume. ACF has a
TradingMarkets.com
RS3 rating of 98
and an uptrending
ADX of 41.
PolyMedica (PLMD)
is breaking up out of a flag pattern. PLMD has a
TradingMarkets.com RS3 rating of 99
and an uptrending
ADX of 32.
The Dow is now trading above its major support at
10,200. It has resistance at 10,302 and secondary resistance at 10,404. The NYSE
Adv/Dec is at 2106/948. A close near the high of the day with stronger volume could
signal a rally for tomorrow.
A strong move by the tech sector has lifted the
Nasdaq to its resistance point at 1794 the 20-day MA. A secondary resistance
level is at 1800 to 1809. Initial support is at 1790/1787. Nasdaq Adv/Dec
2292/1033.