Devastating To Say The Least
With
the devastating earning season, stocks continue to lose ground and the
markets seem to be taking
a one step forward-two steps back approach.
The beauty of being a pure intermediate term trader is you will not be
trading full steam ahead in this type of environment. What I have
observed Monday
on the overall market action was the selling occurred on lower volume,
as did Tuesday’s
actions.
Breadth for the day was
negative;
the NYSE today was negative with advancing issues lagging decliners
972 to 2143 as was the the Nasdaq Composite,
1074 advancers to 2112 decliners.
Monitor the Nasdaq Composite
closely as we closed at 1959;
a
close below 1935 is considered bearish by a number of Wall Street
technicians.
Not many stocks came up on
radar today, so I am just going to show you some stocks that have been
holding up.
Healthsource (HRC)
is pulling back to form a handle for its multi-week base. Notice how
volume is drying up on the pullback.
Manor Health Care (HCR)
is consolidating.
Cheescake Factory (CAKE)
pulled back from its high of it 38+ week base. The company is showing
some nice earnings growth (42%, 27%, 31% and 31%) and analyst’s are
projecting a 24% increase for 2002.
Copart (CPRT)
which was mentioned in this column previously,
still looks poised to breakout of a high level symmetrical triangle.
Looking at the Exchange
Traded funds, the WEBS-Malaysia (EWM)
edged higher 1.5%.
The Internet Infrastructure
Holdrs (IIH)
traded up 1.4%.
Also trading higher were the
Webs-Singapore (EWS)
which closed up 1.0%.
In the red were the D.J.
Internet Trust (IYV)
which closed lower 5.2%, close behind was the Telecom Brasileiras (TBH)
which shed 5.0%.
TBH looks poised to break
the support as the fund closed weak.
Moving lower also was the
Broadband Holdrs (BDH)
slid 4.9%. Notice how the A/D line broke down to a new low.
This
leads me to believe we could see the fund going lower.
Remember that all securities
are risky. In any trade, you should always reduce your risk by
adjusting position size and placing open protective stops where
you will sell your long or cover your short in case the market turns
against you. For an introduction to combining price stops with
position sizing, see Loren’s lesson, Risky
Business.
Greg