Weak Market, Strong Setups
August continues to be a boring
month. Historically, it’s known for being a flat month with light
volume.
Later today I’ll take my weekly
look at the Nasdaq.
There will be no
charts in Trading the Techs AM, but they will return on Monday.
Today’s
Watchlist:
(
TEVA |
Quote |
Chart |
News |
PowerRating),
(
SANM |
Quote |
Chart |
News |
PowerRating),
(
EMC |
Quote |
Chart |
News |
PowerRating)
Teva Pharmaceuticals
(
TEVA |
Quote |
Chart |
News |
PowerRating)
broke out to a new high on Thursday. This is the second breakout
that I’ve seen in the stock in the last 30 days. Although it
traded up to 65, it pulled back enough to just edge above its
former highs. What’s key to this breakout is the volume that
backed the move, roughly 2 million shares. Set your alerts near
65 1/4, which was Thursday’s intraday high, and watch for a
continuation move above this level. On the fundamental side,
there has been a recent interest in the generic drug makers.
This may also help the stock.
Sanmina
(
SANM |
Quote |
Chart |
News |
PowerRating), also in the
strong biotech group, has been consolidating near its highs since
gapping over 100 in early August. The last three trading sessions
have shown slightly higher highs, perhaps suggesting something
positive. The all-time high on the stock is 112 3/16, which is
roughly 5 points away. Although it’s trading down on Friday, it
found some support along the 5-day MA. Watch for a continuation in
the consolidation pattern until it breaks out. When it does make
its move outside of the range, watch for it to be backed by
volume. Don’t forget how many false breakouts we’ve seen in the
last few months.
Teligent
(
TGNT |
Quote |
Chart |
News |
PowerRating), on the
Shortlist, continues to trade lower. The stock has been trending
down since it made a lower high in mid-July. On Wednesday it
finally closed below support. It then headed lower for the next
two days. With TGNT now under the 5-day MA, let’s watch for bumps
against the underside of this trendline to provide shorting
opportunities. Because this is a lower-priced stock, we shouldn’t
expect to see as large of a move.
EMC
(
EMC |
Quote |
Chart |
News |
PowerRating) has been moving
lower for the past three days. Intraday on Friday it set a new
low and bounced just over the 20-day MA. What interests me is
that it has come off its lows and is now trading in the top 25%
of its range. If it’s strong enough to turn around and go positive,
watch for a move above the 5-day MA. The more conservative play
would be to wait for it to take out Thursday’s intraday high.