Monday’s Stock Watch

The broader markets
fell on disappointing unemployment data
, though after a strong week of
gains a breather was anticipated. Lighter than average volume on the session saw
its highest concentration of selling in the tech sector, with Nasdaq down volume
beating up volume by 2:1. Most sectors closed in the red, though computer
hardware and finance stocks showed some resilience. Breakouts were toned down to
about half of what the two previous days gave us. The stocks on our watch list
were down for the most part.


The Dow Jones Industrial Average
(
$INDU |
Quote |
Chart |
News |
PowerRating)
closed down

0.49% to
10,049.46. The S&P 500
(
$SPX |
Quote |
Chart |
News |
PowerRating)
closed down

0.78% to
1,157.96.
The Nasdaq [COMPQ | COMPQ] closed down

1.60% to
2,020.98.

NYSE NASDAQ
Advancing Issues
1,404

1,750
Declining Issues
1,683

1,884
Advancing Volume
493,094,000

512,975,000
Declining Volume

717,682,000

1,368,731,000
Total Volume
1,228,459,000

1,906,456,000
New 52-week Highs 51 45
New 52-week Lows 8 1
New 52-week Highs 304 263
New 52-week Lows 31 5

Weekly Perspective:

This last week provided a nice ride
for the bulls, with all three major indexes tacking on gains. The Dow closed the
week up 197.79 for a 2% gain, the S&P 500 added 18.86 for a 1.6% gain, and the
Nasdaq fired up 90.68 points for a 4.6% gain. The buying was broad-based, with
strong indications of breadth coming in with new 52-week highs, and Boucher’s
Top
RS and EPS New Highs List
. Wednesday’s and Thursday’s high
volume action marked the signs of buying power we’ve been waiting for, and with
the NASDAQ reaching over 100 for breakouts on Thursday, we have reason to cheer.
Without getting too optimistic, comments from Kaltbaum, Truebenbach, and Boucher
remind us that we still need to be patient and look for further signs of
strength via true leadership and high volume buying to send us above the 200-day
moving averages on the indexes. Let’s not forget that the ’69 and ’74 bear
markets each had a 15-week rally.

Strength across the sectors was
shown with computers and high technology. The strongest concentrations of
breakouts were seen in medical companies, semiconductors, and business services.
Now adding to high concentrations of breakouts we have REITs, restaurants,
electronics, and auto-part stocks.

Top sectors:

CBOE Internet Index
(
$INX.X |
Quote |
Chart |
News |
PowerRating)
up 3.11% to
144.27.

Securities Broker/Dealer Index
(
$INSR.X |
Quote |
Chart |
News |
PowerRating)

up 2.30% to 515.92.

Networking Index
(
$NWX.X |
Quote |
Chart |
News |
PowerRating)
up 7.72 to
369.62.

Losing sectors:

Oil Service Sector Index
(
$OSX.X |
Quote |
Chart |
News |
PowerRating)
down
3.48% to 81.12.

Oil Index
(AMEX)
(
$XOI.X |
Quote |
Chart |
News |
PowerRating)
down
2.60% to 497.92.

Sectors With New Highs:

Auto Parts – 3

Business Services – 6

Business Software and Services – 4

General Building Materials – 2

General Contractors – 1

Grocery Stores – 3

Home Furnishings stores – 1

Home Furnishings Fixtures – 2

Internet Information Providers – 1

Internet Software and Services – 2

Medical Appliances and Equipment – 1

Mecical Instruments and Supplies – 3

Medical Laboratories and Equipment – 1

Processed and Packaged Goods – 3

Regional Banks – 4

REITs – 6

Restaurants – 4

Semiconductors Integrated Circuits – 2

Semiconductor Specialized – 3

Watch List Action

PEC
Solutions
(
PECS |
Quote |
Chart |
News |
PowerRating)
fell another 8.22% for a distribution day. This stock has
been leading the pack for the last month, and it appears that things are cooling
off a bit. Here is where we’ll wait and watch to see of it joins the ranks of our
other failed leaders, or turns into a success.

Krispy Kreme Doughnuts
(
KKD |
Quote |
Chart |
News |
PowerRating)
gained 2.83% on average volume for an
accumulation day. This was our biggest gainer on the day and the stock has been
moving above its 50-day moving average for three sessions in a row. This
doughnut retailer is now 8% off its 52-week high, with eight distribution days and
six accumulation days in the past three weeks.

Recent Breakouts

We monitor the action of Recent Breakouts as an indicator
of the market health for IT traders. When breakouts are acting well, this is a
good sign for the likelihood of further sustainable breakouts. When breakouts
are failing, IT traders should be even more cautious.

American Healthways Inc.
(
AMHC |
Quote |
Chart |
News |
PowerRating)
down 3.32% on

average volume.

Copart Inc.
(
CPRT |
Quote |
Chart |
News |
PowerRating)
up 0.02% on below-average volume.

Ebay

(
EBAY |
Quote |
Chart |
News |
PowerRating)
down 3.29% on

below-average volume.

Genesis Microchip
(
GNSS |
Quote |
Chart |
News |
PowerRating)
down 1.15% on
average volume.

MTR Gaming Group
(
MNTG |
Quote |
Chart |
News |
PowerRating)
up 0.62% on
below-average
volume.

Nvidia Corp.
(
NVDA |
Quote |
Chart |
News |
PowerRating)
down 3.05% on below-average volume.

Panera Bread Co.
(
PNRA |
Quote |
Chart |
News |
PowerRating)
down 1.21% on below-average
volume.

THQ Inc.
(
THQI |
Quote |
Chart |
News |
PowerRating)
down 0.92% on average
volume.


Company
Name

Symbol

12 Month RS

Price

Price Change

Average
Volume
American Healthways Inc.
(
AMHC |
Quote |
Chart |
News |
PowerRating)
99 33.40 – 1.15 228,300
Copart Inc.
(
CPRT |
Quote |
Chart |
News |
PowerRating)
94 35.63+ 0.01 – 0.38 296,100
Ebay
(
EBAY |
Quote |
Chart |
News |
PowerRating)
93 67.84 – 2.31 9,042,100
Genesis Microchip
(
GNSS |
Quote |
Chart |
News |
PowerRating)
99 59.72 – 0.70 2,627,300
Krispy Kreme Doughnuts
(
KKD |
Quote |
Chart |
News |
PowerRating)
93 40.00 + 1.10 874,200
MTR Gaming Group
(
MNTG |
Quote |
Chart |
News |
PowerRating)
94 12.85 + 0.08 334,400
Nvidia Corp.
(
NVDA |
Quote |
Chart |
News |
PowerRating)
97 59.95 – 1.89 10,451,700
Panera Bread Co.
(
PNRA |
Quote |
Chart |
News |
PowerRating)
95 49.42 – 0.61 305,900
PEC Solutions
(
PECS |
Quote |
Chart |
News |
PowerRating)
99 34.00 – 3.05 482,400
THQ Inc.
(
THQI |
Quote |
Chart |
News |
PowerRating)
94 57.70 – 0.54 1,594,300

Stocks Forming a Handle



Company
Name

Symbol

12 Month RS

Price

Price Change

Average
Volume
Direct Focus Inc.
(
DFXI |
Quote |
Chart |
News |
PowerRating)
89 30.72 + 0.48 644,300

Stocks Building A Base


Company
Name

Symbol

12 Month RS

Price

Price Change

Average
Volume
None

danielb@tradingmarkets.com