Connors’ Mid-Week Battle Plan

• June 5, 2003
• Larry Connors

Our
primary trading encompasses the philosophy that markets move sectors, and
sectors move stocks. Here are our thoughts for the day:

Markets

The market continues to exhibit
typical early bull market stage behavior. Early morning weakness is eventually
shrugged off, led by gains in the better momentum markets. The bias signals
for tomorrow are for a higher day, in spite of the fact that the market is
making new intermediate-term highs. The leaders are still leading and this is very
positive longer term.

Sectors and
Stocks

Positive: GOLD
(
$XAU.X |
Quote |
Chart |
News |
PowerRating). The Metals and Mining sector gaps up
today, to close up roughly 3% on the day. Technically, this subsector shows
unusual strength…especially when you consider the strength in the overall
market. GOLD normally rises when we have inflation fears, or when traders are
looking for a relative “safe place.” Regardless of the reason behind the
strength, we must appreciate the price action. Here a couple of stocks to watch
in this sector.

(
NEM |
Quote |
Chart |
News |
PowerRating): Gap today, with no overhead resistance on
its daily chart. The weekly chart is also trading above its 200-period
moving average, which confirms the long side. Keep an eye on the 33 level, as
it is a important inflection point. If we break through 33, many stops might
go off, which can launch NEM further.

Negative: Biotech. Yes, the
(
$BTK.X |
Quote |
Chart |
News |
PowerRating) has been the lead dog in
this mini bull run, HOWEVER, we are quickly coming to important resistance. It
is common for stocks/indices to pause after amazing runs when they hit
resistance. Yes, the BTK blew through its all -mportant 200 period weekly
moving average, but if you are not already long, and taking profits….it
might be a dicey time to enter new positions.

(
CRL |
Quote |
Chart |
News |
PowerRating): Has had a decent run, but lags behind the
other biotechs that have recently exploded.  Significant resistance lies
ahead, and you might want to look to short if the sector as a whole cools off.
Watch 33.50 as a point of resistance.