Keeping An Eye On The Banks

  • July 16, 2001
  • Dave Floyd

I
apologize for the brief column today…nothing like a little car
trouble to start the day. At any rate,
futures are off a bit in the early going, sitting right on the major resistance
levels which were finally broken and held on Friday, those numbers being 1223
and 1757. Look for these numbers to be
pivotal on the opening and throughout the day. The
bulls would love to be able to push to higher levels in order to secure an
up-trend. S&P resistance is seen at 1239.46 and 1230, while support is seen
at 1220 and 1214.57. The Nasdaq also
needs one more close above resistance, 1810, to make the bulls real happy. 

For those of you looking at
some longer-term plays, I came across eight stocks over the weekend that look
interesting on daily charts. All the
stocks are exhibiting strong/weak OBV (on-balance volume) and are either in a
pullback or forming a flag pattern. So,
depending on where you think the market may be heading over the next few days or
weeks, these stocks may offer some opportunity: 

Bullish Formations:

Boise Cascade
(
BCC |
Quote |
Chart |
News |
PowerRating)

Doral Financial
(
DORL |
Quote |
Chart |
News |
PowerRating)

Johnson Controls
(
JCI |
Quote |
Chart |
News |
PowerRating)

National City Corp
(
NCC |
Quote |
Chart |
News |
PowerRating)

Bearish Formations:

ICN Pharmaceuticals
(
ICN |
Quote |
Chart |
News |
PowerRating)

The Dial Corp
(
DL |
Quote |
Chart |
News |
PowerRating)

Great Lakes Chemical
(
GLK |
Quote |
Chart |
News |
PowerRating)

Kimberly Clark
(
KMB |
Quote |
Chart |
News |
PowerRating)

Friday I had mentioned that it
might be worthwhile to keep an eye on the bank stocks in lieu of the Argentina
crisis. While I still believe there may
be some trading opportunities intraday based on news coming out of Argentina or
any IMF comments, be careful, since two of the banks, Citibank
(
C |
Quote |
Chart |
News |
PowerRating) and Bank
of America
(
BAC |
Quote |
Chart |
News |
PowerRating) report earning today. Fundamental
news like earnings or upgrades/downgrades make trading these stocks very
difficult from a technical perspective. The
other two stocks with the most exposure are JP Morgan
(
JPM |
Quote |
Chart |
News |
PowerRating) and Fleet
Financial
(
FBF |
Quote |
Chart |
News |
PowerRating). Argentina’s
government was unable to reach a decision on spending cuts over the weekend.

Thought For The Week:

“In
trading, just as in archery, whenever there is effort, force, straining,
struggling or trying, it’s wrong. You’re
out of sync; you’re out of harmony with the market.
The perfect trade is one that requires no effort.” 
Anonymous

As always, feel free to send me
your comments and questions, davef@tradingmarkets.com.

Dave

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