These Factors Are Fueling The Upward Bias
Stocks moved higher this morning as quick and
nimble bargain hunters stepped up to the plate. Traders were encouraged
by some reassuring earnings news from big players like Sears Roebuck & Co.
(
S |
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and Genentech
(
DNA |
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PowerRating).
The
Dow Jones Industrial Average
(
$INDU |
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PowerRating) opened stronger at the
bell and rallied to triple-digit gains by 10:30 a.m. EST. By midday, some
profit-takers stepped in to take advantage of early gains, but the market bias
is still positive. Some of the sectors that have helped push the NYSE higher in the first half-day
of trade are both the bank indexes, which are positive
today, the PHLX Bank Sector
(
$BKX.X |
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PowerRating) and the S&P Banks Index
(
$BIX.X |
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Some of the stocks that are pushing the PHLX Bank Sector are Bank of America
(
BAC |
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News |
PowerRating), Wachovia
(
WB |
Quote |
Chart |
News |
PowerRating), Fifth Third Bancorp
(
FITB |
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Chart |
News |
PowerRating), Washington Mutual
(
WM |
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News |
PowerRating) and State Street
(
STT |
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PowerRating).
The PHLX Utility Sector
(
$UTY.X |
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PowerRating) is
also powering the positive bias. The majority of the stocks in this sector are
trading positive this morning. Some of the stocks that are helping push the UTY
are Exelon
(
EXC |
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PowerRating), American Electric Power
(
AEP |
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News |
PowerRating), Public Service
Enterprise
(
PEG |
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News |
PowerRating), Entergy
(
ETG |
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News |
PowerRating) and PG&E
(
PCG |
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PowerRating).
Support for the Dow is at 10,260 and secondary
support is at 10,200, where it has gravitated toward the last couple of
sessions. A close above 10,320, its resistance level, would be positive for
tomorrow.
The Nasdaq Composite Index
(
COMPQ |
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News |
PowerRating)
moved up 5.30 to 1747.60 after sinking 43.30, or 2.4%, the previous session, but
then began a familiar pattern by selling off by mid-session. However, there has
been a reversal of fortune as this is written, and it’s starting to come back
stronger, breaking above its first resistance level at 1757.
One bright spot for the Nasdaq is the
AMEX Biotechnology
Index
(
$BTK.X |
Quote |
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News |
PowerRating) as it is trading stronger today. The majority of the
stocks in this sector are trading positive in early trade. Some of the stocks
that are helping push the Biotech sector are Amgen
(
AMGN |
Quote |
Chart |
News |
PowerRating)), Biogen
(
BGEN |
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News |
PowerRating),
Chiron
(
CHIR |
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News |
PowerRating), Genzyme
(
GENZ |
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Chart |
News |
PowerRating), Genentech
(
DNA |
Quote |
Chart |
News |
PowerRating) and IDEC
Pharmaceuticals
(
IDPH |
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PowerRating).
Support for the Nasdaq is at 1724.00, which is at the low area
for February of this year. A positive close would be helpful for the Nasdaq,
meaning a
close above 1770. However, as many of the tech-heavy sectors show lackluster
movement, the Nasdaq looks like it could remain in a downtrend.
The Dial Corporation
(
DL |
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PowerRating) is hitting a
52-week high today on very strong volume. After breaking out a couple of
days ago, Dial has put together a nice rally. DL has a
TradingMarkets.com RS3 rating of 92 and an uptrending
ADX
of 27.
Sonic Automotive
(
SAH |
Quote |
Chart |
News |
PowerRating) is moving above a
double top. SAH carries a
3-month relative strength rank of 92 from TradingMarkets.com.
ASM International
(
ASMI |
Quote |
Chart |
News |
PowerRating) is pulling back
to the 20-day moving average. ASMI is currently up 0.62 to 33.30 and is
holding a
3-month relative strength rank of 94 along with an uptrending
ADX of 41 from TradingMarkets.com.
Fortune Brands
(
FO |
Quote |
Chart |
News |
PowerRating) was featured in
TradersWire yesterday as it was hitting
a 52-week high with very strong volume. Today it is continuing its move to the
upside. FO has a
TradingMarkets.com RS3 rating of 91 and an uptrending
ADX of 39.
Part of my daily reading and preparing for battle
in the markets is mandatory. I read
Kevin Haggerty’s Views From the Trading Desk.
I am amazed at his astute
knowledge of the markets. He helps me focus on the hot spots of the market.
Today Kevin brought up a good point about options. I have found that when I have
been uncertain about markets, I have done some option spreads.
Tony Saliba
is the best person who can teach you these strategies.
Good Luck In the Second Half!!