Monday’s Stock Watch
The major indexes ended the
week with slight losses, as volume accounted for one day of
accumulation on the NYSE, and two days of accumulation on the Nasdaq. The Dow is
now resting at its 200-day simple moving average, while the S&P 500 and Nasdaq
trade above this heavily watched level.
As we move through earnings season, market
conditions continue to favor the bulls, and as representative of this report,
growth stocks. Current leadership is coming from Internet issues. Friday’s
action may serve as an indication of some weakness, as the bellwether
semiconductors and broker/dealers experienced distribution.
Market breadth has been supportive of the upside,
with New 52-week Highs holding a clear edge over the New 52-week Lows, and Mark
Boucher’s
Top
RS and ER List giving us a bullish bias over a nearly nonexistent
Bottom RS and ER List.
Stocks on our watch lists continue to give us
positive signs. We saw a string of breakouts for the week. The success of these
breakouts is important to watch for the health of the overall market. As always,
the search goes on for top stocks meeting our strict fundamental and technical
criteria.
From Friday’s action:
Market breadth was negative, with NYSE declining issues over advancing
issues by a ratio of 1.62, and down volume over up volume by a 3.29 ratio. Nasdaq declining issues over advancing issues came in at 1.42, and down volume
beat up volume by a 3.35 ratio.
Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating)
closed -1.58%
at 8,306.35. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed
-1.38%
at 898.81.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed
-1.55%
at 1,434.54.
1,170
1,296
Declining Issues
1,899
1,813
318,389,000
342,600,000
Declining Volume
980,841,000
1,156,231,000
Total
Volume
1,312,096,000
1,509,593,000
Highs
8
10
9
3
Strongest Sectors:
Internet (content), Medical (generic), Telecom (fiber optics), Media
{cable/satellite), Computer (data storage), Internet (service providers).
Watch List Action:
We had a breakout Thursday with Endo Pharmaceuticals
(
ENDP |
Quote |
Chart |
News |
PowerRating) as it
shot through its pivot buy of 14.98 on over five times average volume. The stock
followed up its breakout with a bearish inside day on twice average volume. Keep
in mind we generally want to avoid stocks that trade under $15 as their chances
of succeeding are reduced.
Also breaking out this week, Centex Corp.
(
CTX |
Quote |
Chart |
News |
PowerRating) has been pulling back
for the past couple of days after making a new 52-week high. Firiday, the stock
traded in a narrow range on above average volume as it showed some indecision.
For the past month the stock has made eight accumulation days vs. one
distribution day.
Recent Breakouts
size=2>We monitor the action of Recent Breakouts as an indicator of
the market health for IT traders. When breakouts are acting well, this is a good
sign for the likelihood of further sustainable breakouts. When breakouts are
failing, IT traders should be even more cautious.
| color=#ffffff size=2>Company Name | color=#ffffff size=2>Symbol | color=#ffffff size=2>12 Month RS | color=#ffffff size=2>Price | color=#ffffff size=2>Price Change | color=#ffffff size=2>Average Volume | Pivot | 52-Week High |
Apollo Group | ( APOL | Quote | Chart | News | PowerRating) | 89 | 52.41 | -1.33 | 1,940,400 | 46.89 | 56.06 |
Career Education Corp. | ( CECO | Quote | Chart | News | PowerRating) | 91 | 56.09 | -1.81 | 717,900 | 54.40 | 58.73 |
Centex Corp. | ( CTX | Quote | Chart | News | PowerRating) | 81 | 63.48 | -0.06 | 1,291,000 | 59.80 | 64.28 |
Coach Inc. | ( COH | Quote | Chart | News | PowerRating) | 93 | 41.17 | -1.03 | 1,154,900 | 28.35 | 43.17 |
Chicos FAS | ( CHS | Quote | Chart | News | PowerRating) | 91 | 56.09 | -1.81 | 1,393,700 | 23.05 | 23.73 |
Endo Pharmaceuticals | ( ENDP | Quote | Chart | News | PowerRating) | 97 | 15.80 | -1.05 | 413,700 | 14.98 | 17.20 |
Expeditors International of Washington | ( EXPD | Quote | Chart | News | PowerRating) | 84 | 35.28 | -0.64 | 1,034,900 | 34.54 | 38.00 |
Garmin Ltd. | ( GRMN | Quote | Chart | News | PowerRating) | 97 | 39.00 | -0.91 | 619,600 | 23.46 | 40.10 |
International Game Technology | ( IGT | Quote | Chart | News | PowerRating) | 86 | 83.83 | -1.34 | 1,220,000 | 74.84 | 87.20 |
New Century Financial | ( NCEN | Quote | Chart | News | PowerRating) | 93 | 36.80 | +0.56 | 486,100 | 34.90 | 37.04 |
UCBH Holdings | ( UCBH | Quote | Chart | News | PowerRating) | 83 | 24.70 | -0.05 | 377,900 | 22.60 | 24.85 |
Also new to the “breakout” list are CHS, CECO,
CTX, ENDP, and NCEN.
Stocks Forming a Handle
| color=#ffffff size=2>Company Name | color=#ffffff size=2>Symbol | color=#ffffff size=2>12 Month RS | color=#ffffff size=2>Price | color=#ffffff size=2>Price Change | color=#ffffff size=2>Average Volume | Pivot |
Boston Scientific | ( BSX | Quote | Chart | News | PowerRating) | 87 | 42.91 | -0.75 | 2,469,600 | 47.65 |
Corinthian Colleges | ( COCO | Quote | Chart | News | PowerRating) | 86 | 40.97 | +0.14 | 1,023,500 | 43.09 |
Hovnanian | ( HOV | Quote | Chart | News | PowerRating) | 86 | 38.71 | -1.30 | 487,800 | 40.90 |
COCO hit its previous pivot point though did not
produce enough volume for a “buy”.
HOV’s pivot point has been reset.
Stocks Building A Base
color=#ffffff size=2>Company Name | color=#ffffff size=2>Symbol | color=#ffffff size=2>12 Month RS | color=#ffffff size=2>Price | color=#ffffff size=2>Price Change | color=#ffffff size=2>Average Volume | Pivot |
None |
If you are new to the “IT” strategy, be sure to
take a look at our
intermediate-term online trading course.
Intermediate-Term Traders
Report is posted on
Tuesdays and Fridays. For other intermediate-term commentary, be sure to read
Mark Boucher (Fridays),
Tim Truebenbach (Tuesdays and Thursdays), and
Gary Kaltbaum (Mondays and Thursdays).