Tuesday’s Stock Watch

  • May 23, 2003
  • Chris Tyler

 

Since we last
left off two weeks ago, the ETFs
have traded higher in our ‘confirmed rally’,
but this week’s pullback has all but erased those recent highs.
The percentage change from these freshly
minted levels leaves the ETFs utterly flat, and that’s the good news my friends.
The retreat on lighter volume, while maintaining our uptrend, is exactly the
type of price action that makes up constructive behavior for more enduring
market action to the upside. 

While the index proxies, the SPYs,
DIAs, and QQQs spent the past ten days forming higher highs, and a
fresh higher low off of technical supports, many sectors have continued to blaze
to fresh 52-Week Highs. Included in this list are the Biotechs
(
BBH |
Quote |
Chart |
News |
PowerRating),
Internet
(
HHH |
Quote |
Chart |
News |
PowerRating), Health Medical
(
$HMO.X |
Quote |
Chart |
News |
PowerRating), and the very well built Housing
sector
(
$HGX.X |
Quote |
Chart |
News |
PowerRating).

 Once again, the
breadth of Mark Boucher’s Top
RS and ER List continues to dominate over a ‘non existent’ Bottom
RS and ER list, but this is not to say that our watch list was without
casualty, and the reason why we always emphasize proper position management,
which includes trailing stops, and initial protective stops. Remember, our goal
is to keep the profits where they belong, in our trading accounts. Expeditors International
(
EXPD |
Quote |
Chart |
News |
PowerRating) broke more than 7% through our pivot of 34.54 on several
sessions of heavy distribution, removing it from our current watch list. Thank
you Mr. Money Management, for keeping us in the game.

It should be mentioned that Artisan Components
(
ARTI |
Quote |
Chart |
News |
PowerRating) did follow through, but on an opening gap higher. If a position
was established a stop loss would have resulted in a loss on the position.
That’s a tough one to call, whether or not it was right to chase the gap, but
money management is one of the tricks of the trade that we never leave open to
question. Interestingly, the stock took the ‘drubbing’ on news of a secondary
offering at 19 dollars a share, a price level that has managed to find support.
On the weekly time frame it appears as though the stock could now be forming a
high level handle, a “shake out” version, with last weeks highs being
the pivot. Gen-Probe
(
GPRO |
Quote |
Chart |
News |
PowerRating) was an easier call for those that play
momentum out of pullbacks. A trigger .10 thru the prior high of 35.78 saw
profits of just over 7% before reversing, and falling almost exactly 7% through
the buy point, to test the 20-Day EMA. The stock has subsequently traded higher
to fresh 52-Week highs as of the close of trade.

 

NYSE NASDAQ
Advancing
Issues		 2173 1839
Declining
Issues		 1090 1298
Total
Volume		 1,200b 1,430b
New
52-week Highs		 104 46
New
52-week Lows		 1 0

 

New Category:

Swing Trade Setups: Potential
position plays that use key technical levels for entry into stocks that do not
necessarily meet all of our stringent Intermediate Term requirements, but are
demonstrating many of the same strong criteria. Due diligence on the individual
traders part is an absolute requirement!!! Proper money management rules are
emphasized in scaling out of profitable positions, as is, the setting of prudent
stop losses, on the establishment of any positions taken. 

Company
Name		 Symbol 12
Month RS		 Price Pivot
+.10		 Technical
Perspective
Artisan
Components
(
ARTI |
Quote |
Chart |
News |
PowerRating)		 87 19.95 20.90 reversal
pivot play using money stop or pivot lows if formed
Citrix
Systems
(
CTXS |
Quote |
Chart |
News |
PowerRating)		 95 20.59 20.90 Ascending
triangle b/o
QLogic
(
QLGC |
Quote |
Chart |
News |
PowerRating)		 68 45.76 45.49 “W”
Bottom w/ handle July 01′ – Dec 02′ (handle pivot) weekly

 


Watch List Action:

As always, the search goes on for top stocks meeting our
fundamental and technical criteria. Stocks forming bases or handles are
monitored, and put on our watchlist, and then moved to our position list of
recent breakouts, on price triggers above resistance pivots.

Boston Scientific
(
BSX |
Quote |
Chart |
News |
PowerRating)
triggered out of our list of
stocks forming a handle, and is the only fresh addition to our Recent
Breakouts list.

Stocks Building A Base

Company
Name		 Symbol 12
Month RS		 Price Price
Change		 Average
Volume		 Pivot
None            

                       

Stocks Forming A Handle

Company
Name		 Symbol 12
Month RS		 Price Price
Change		 Average
Volume		 Pivot
None            

           

 

Recent Breakouts

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. 

    

Company
Name		 Symbol 12
Month RS		 Price Average
Volume-65 Day		 Pivot 52-Week
High
Apollo
Group		 (APOL) 87 52.40 1,940m 46.89 57.90
Career
Education Corp.		 (CECO) 84 57.40 718m 54.40 62
Centex
Corp.		 (CTX) 90 74.79 1,230m 59.80 76.65
Coach
Inc.		 (COH) 91 44.69 1,075m 28.35 47.30
Hovnanian (HOV) 89 49.55 535k 40.90 50.45
Boston
Scientific		 (BSX) 71 50.51 2,796m 47.65 51.25
Garmin
Ltd.		 (GRMN) 94 46.28 643k 23.46 48.44
International
Game Technology		 (IGT) 82 88.25 1,133m 74.84 89.62
New
Century Financial		 (NCEN) 84 45.75 636k 34.90 47.75
UCBH
Holdings		 (UCBH) 82 25.06 252k 22.60 27.67

Breakouts that may
require extra diligence. Those issues that are near pivot entries or 15%
or more, from established highs.

This list accounts for those issues that have performed strongly, but may
require position management due to deteriorating technical condition before
pivot price is reached.

Company
Name		 Symbol 12
Month RS		 Price Average
Volume-65 Day		 Pivot 52-Week
High
Corinthian
Colleges		 (COCO) 88 43.77 1,002M 43.09 48.30
Endo
Pharmaceutical		 (ENDP) 91 15.36 513K 14.98 18

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