What Is Signaling A New Leg Up

August 16, 2002
Daniel Beighley

For the fourth week in a row, the Dow Jones
Industrial Average and the S&P 500 etched out a positive gain. For the second
week in a row, the Nasdaq Composite closed positive. On this options expiration
Friday, the major indices were mixed. Blue-chips were hesitant in advancing, as
a result of a slew of economic reports released early in the session.

A preliminary consumer sentiment report released from the University of Michigan
showed a decline to 87.9 from 88.1 in July.
Wall Street had been anticipating a decline. Separately, the CPI
came in lower than expected at +0.1% with the consensus at + 0.2%.

After being down nearly 100 points, the Dow Jones
Industrial Average
(
$INDU |
Quote |
Chart |
News |
PowerRating) was attempting to break up to hit
its 50-day moving average on the daily chart, but couldn’t quite make it. The
Dow Jones Industrial Average closed down 40.15 at 8777.99. Next week, the
Dow will try to break out above the key 8865 50-day moving average. Support on
the Dow is at the very important 20-day moving average (8441). Market
Breadth on the NYSE: Adv: 1763 vs Dec: 1442 = Net: +321.
UpVol: 54079255 vs DnVol: 63699360 = Net: -9620105.

On the daily chart, the S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
has butted its head on the 50-day moving average (934) on the daily chart. The
S&P 500 Index closed down 1.50 to 928.75. The S&P 500 has support at around the
925/926 level. If the S&P 500 can break through the 50-day moving average, the
next resistance barrier will be at 952.

On the daily chart, the
Nasdaq Composite
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) did not get as close to its 50-day
moving average as did the Dow or S&P, but it is heading in that direction and closed positive for the day. The Nasdaq Composite closed up 15.80 to 1360.81
Overhead resistance is at the 50-day moving average at 1378. Support is at
1325/1322. Nasdaq Market Breadth: Adv: 1852 vs Dec: 1447 = Net:
+405. UpVol: 856539105 vs DnVol: 422586000 = Net:
+433953105.

Other positive sectors on the week were Movies
& Entertainment + 12.4%, Broadcasting & Cable + 11.0%, Computers &
Electronics + 9.9%, Network Equipment + 9.7% and Specialty Stores
+ 8.8%. The weaker sectors on the week were: Paper Products
-9.5%, Aerospace & Defense -5.4%, Aluminum -4.9%, Tires &
Rubber -4.3% and Steel -3.1%.

Some stocks that are potential movers to the upside:

CR Bard
(
BCR |
Quote |
Chart |
News |
PowerRating) is pulling back from its recent high.
BCR carries a

3 -month
relative strength rank of 89 from TradingMarkets.com.

Advanced Auto Parts
(
AAP |
Quote |
Chart |
News |
PowerRating) is
rallying from a 1,2,3 bottom on stronger volume for this time of the day. It has
now broken above its 50-day moving average, which also happens to be right
around the 50% Retracement line. (The Retracement is from the Low in March to
the High in May). Support is at 48.00.

Coinstar
(
CSTR |
Quote |
Chart |
News |
PowerRating) is breaking
out above the 32.00 resistance level with increasing volume. CSTR is approaching
the 52-week high at 35.00. Initial resistance is at 34.00. CSTR has an up
trending

ADX of 28.

Pixar
(
PIXR |
Quote |
Chart |
News |
PowerRating) is breaking out of an
ascending triangle with very strong volume. PIXR has a

TradingMarkets.com RS3 rating of 81.

Guidant [GDT|GDT] is forming a cup
and handle pattern on the daily chart. GDT has a

TradingMarkets.com RS3 rating of 96 and an up trending

ADX of 32. A strong break above 36.70 level with strong volume, could be
the trigger point for a new leg up.

Best Buy
(
BBY |
Quote |
Chart |
News |
PowerRating) is moving in a counter trend rally on the daily
chart. BBY is holding a

3 -month
relative strength rank of 14 from TradingMarkets.com.

Have A Great Weekend!

What Is Signaling A New Leg Up

BUY THE FEAR, SELL THE GREED

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