Reasons Thursday’s Rally May Stick…
Once again there is a choppy
sensation in the markets. The three major indices have put in
their intraday lows and are trading in narrow sideways channels at the midpoint of
trading.
The S&P 500
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dropped and tested its support at 870.35, which is the 50% retracement of the
July and Aug rally. The SPX broke above the intraday resistance at the 875 and
882 levels to make an intraday high at 893.40.
The Nasdaq Composite
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intraday resistance at 1270. The Semis continue to drag on the Nasdaq. The Semi Index
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to a new 52-week low. At the midpoint of trading, the SOX was pulling up off of
the worst sessions of the day. Intel
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were two of the stocks getting hit the hardest in the SOX.
Other sectors that are weaker on the day are:
Wireless, Telecom, Networking, Retail, Airline, Biotech, Lodging, Internet
Security.
The strong sectors on the day are oil services
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and gold. Dec. gold
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opened at $316.10.
Right now gold is trading stronger.
The
Phlx Gold & Silver Index
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AU |
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ABX |
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and Placer Dome
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Homebuilders are another strong sector. Yesterday
Hovnanian
Enterprises
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blew away their earnings estimates. Third quarter earnings were $1.20 per fully
diluted share, a record for any in the company’s history. These results are well
ahead of analysts’ estimates and a 69% increase over last year’s third quarter
earnings per share. HOV has a
TradingMarkets.com RS3 rating of 90. HOV had pulled back to test its
20-day moving average at 29.78. Today Hovnanian is continuing its move upward
move and is also sparking a rally in other home builders such as Beazer Homes
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SPF |
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Isle of Capris Casinos Inc.
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ISLE |
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is rallying higher after testing its 20-day moving average (20.85) on the daily
chart. Volume is very strong today and ISLE has a
TradingMarkets.com RS3 rating of 97.
Apache Corp.
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appears to be gathering support at two 50% retracements and the 50-day moving
average. APA carries a
3-month
relative strength rank of 82 from TradingMarkets.com.
Rent-A-Center
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pulling back to test its 20-day moving average. RCII has a
TradingMarkets.com RS3 rating of 87. Volume is very strong today.
Take-Two
Interactive Software
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chart. Resistance is at around 26.00. TTWO has a
TradingMarkets.com RS3 rating of 96 and an uptrending
ADX of 32. A break above 26.00 with strong volume would be a sign of a
new leg up. This morning the company preannounced that EPS for fiscal year 2002
will be 1.75 v. 1.69.
Nasdaq Breadth
Adv: 986 UpVol: 2058876
Dec: 2121 DnVol: 6327718
Net: -1135 Net: -4268842
NYSE Breadth
Adv: 1234 UpVol: 26104819
Dec: 1900 DnVol: 54429080
Net: -666 Net: -28324261