It’s All About Setups And Breakouts
I wanted to thank everyone for
their positive feedback from the past couple of
reports. I am going to continue to be more specific and pointed in my
commentaries, while pointing out how to
exploit the market. I hope you took the
time to go through each and every stock I put out last Monday. You should
be able to tell by now that all the stocks
mentioned looked about the same and
the technical picture only had ominous overtones.
Not much has changed since my last report, but there are
things I wanted to point out. As
you know, I have been quite negative on the Nasdaq…specifically
TECHNOLOGY and BIOTECH.
This thesis has been borne out quite
nicely. I want you to keep your eyes on the same things that I am watching.
First, there are absolutely zero setups in
TECHLAND. The lack of setups tells me
that every rally will fail at this juncture. It’s all about setups
and breakouts when it comes to measuring the markets. The more names
I can list, the better. But just the opposite
is happening.
On a daily basis,
the amount of names breaking down or setting up to break down gets larger and
larger. That does not spell good things going forward. Certainly, there
will be days like Thursday…where the BIOTECHS smoke up 8%. No, I
don’t do what the Joe Kernans or Tom Costellos
of the world do. They just throw
it up in the air, cheerlead away about how it could be the start of a
BIOTECH rally…all because of one day.
I do something different. I go to the
charts. I could have shown you about 250 names, but I figured these names
would speak for themselves. I included 10
charts and listed another 20 names. They
are all in the same category: “the south end of a northbound mule.”
Yes, these stocks can rally
more. We all know that anything can happen. But to put in
a real bottom, it is my contention that these stocks, in fact, the
whole group, will have to spend a lot of time
at or around these levels
repairing all the damage that has been done. The best comparison I can
give you for stocks that have been beaten up
so bad is to think of it as an injury.
The worse the injury, the longer it takes to heal. So take a gander.
Amgen
(
AMGN |
Quote |
Chart |
News |
PowerRating) —
Where is this going? And by the way, this is one of the better charts.
Has the Wall of China at the $54-55 area to
get through.
MedImmune
(
MEDI |
Quote |
Chart |
News |
PowerRating)
— higher volume on the drop Friday than on the rally Thursday.
Genzyme
(
GENZ |
Quote |
Chart |
News |
PowerRating) —
YIKES!
Chiron
(
CHIR |
Quote |
Chart |
News |
PowerRating) —
a wall at $40.
IDEC Pharmaceuticals
(
IDPH |
Quote |
Chart |
News |
PowerRating) — Have you ever been on one of the slides at a water park?
Invitrogen
(
IVGN |
Quote |
Chart |
News |
PowerRating)
— RS of 7…only down 50% since December.
Icos
(
ICOS |
Quote |
Chart |
News |
PowerRating) —
Looks like my golf game.
Protein Design Labs
(
PDLI |
Quote |
Chart |
News |
PowerRating) — Rumor has it that it is merging with Enron. (That’s a joke. No
attorney’s calls please.)
Human Genome Sciences
(
HGSI |
Quote |
Chart |
News |
PowerRating) — Yes, I do remember the genomics project. Investors forgot that if
my kids sold one glass of
lemonade on the corner, they would have more revenues than
HGSI.
Sepracor
(
SEPR |
Quote |
Chart |
News |
PowerRating)
— I think the placebo is working better than the drug.( Just another
joke.)
And when you have a chance, take a gander at these names.
( VRTX | Quote | Chart | News | PowerRating) |
( REGN | Quote | Chart | News | PowerRating) |
( TLRK | Quote | Chart | News | PowerRating) |
( CRA | Quote | Chart | News | PowerRating) |
( CELG | Quote | Chart | News | PowerRating) |
( NPSP | Quote | Chart | News | PowerRating) |
( ISIS | Quote | Chart | News | PowerRating) |
( MYGN | Quote | Chart | News | PowerRating) |
( ENZN | Quote | Chart | News | PowerRating) |
( MEDX | Quote | Chart | News | PowerRating) |
( CBST | Quote | Chart | News | PowerRating) |
( INCY | Quote | Chart | News | PowerRating) |
( ABGX | Quote | Chart | News | PowerRating) |
( GNTA | Quote | Chart | News | PowerRating) |
( DNA | Quote | Chart | News | PowerRating) |
( CRGN | Quote | Chart | News | PowerRating) |
( ITMN | Quote | Chart | News | PowerRating) |
( CVTX | Quote | Chart | News | PowerRating) |
( MLNM | Quote | Chart | News | PowerRating) |
( GLGC | Quote | Chart | News | PowerRating) |
The only name that has a semblance of a chart is Gilead
Sciences
(
GILD |
Quote |
Chart |
News |
PowerRating). I just don’t think it wise to go after until
the group is in a defined uptrend…but if nothing changes
and the group does get going, I would concentrate here. Strength begets
strength…but one day does not make an uptrend.
Oh yeah, Biogen
(
BGEN |
Quote |
Chart |
News |
PowerRating) was the big mover…please look at five-year weekly. Has a two-year
base of resistance just ahead to get through.
And just remember, when a stock drops from $100 to
$20…and then rallies 8%…it’s
up a whopping $1.60. Because of the unprecedented drops in the worst
areas of the past two-plus years, expect more 8% rallies. Just remember
what’s happened to every one of those rallies.
If things change, I will let you
know.