Good Technicals, Despite Difficulties
Technical difficulties at the New York Stock Exchange
prompted exchange officials to halt trading, spurring a chain reaction of
closures at the nation’s largest futures exchanges. The Chicago Board of Trade
and Chicago Mercantile Exchange where futures contracts on the Dow and S&P
500 are traded, also closed as traders were unable to determine the value of
individual stocks that underlie theses major market averages’
Technology stocks had already gotten off to a difficult
start after Juniper Networks
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PowerRating) issued an earnings warning. Networking
stocks across the board are taking a bath. Notably, competitor Cisco
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is 5% lower on fear that not all of the bad news is out on the networking
sector.
The Nasdaq is down 53.73, the Dow is down 148 at 10,942,
and the S&P 500 is down 15.82 at 1261.14.
But not all is breaking down, either technically such as at
the NYSE or on stocks charts. Consider the following biotechs that hold promise
based on good technicals. Genta
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PowerRating), recently broke above $10 and is
triggering out of a 1-2-3 Pullback From Highs setup. The expansion bar on June 6
came on five times its normal volume. Traders snapped up the issue when it came
back to test the mid-point of the expansion bar yesterday, a very constructive
sign. The stock is now tracing a bullish flag out of its cup and handle and is
up .32 at 12.42.
And while it doesn’t have the absolute strongest price performance — its
three-month RS from the Stock
Scanner is 73 — CYTYC Corp.
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PowerRating) has an EPR from the stock scanner
of 89, placing it in the top 11% of all stocks in terms of quarterly
year-on-year earnings growth. This would be commensurate with its 65% quarterly
increase in net sales last quarter. The higher sales come from the company’s
increased sales of its cervical cancer screens (pap tests). The stock has
rallied in each of the past four days on slightly rising volume and is up .70
today at 24.70. This is setting the stock up to test its May 17 high.
And Cubist Pharma
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PowerRating) is trading at a four-month high after breaking
out of a solid base on nearly double average volume yesterday. The biotech is
currently up 2.03 at 33.90.