Monday’s Stock Watch

• April 18, 2003
• TradingMarkets Editors

Buyers took control for the
holiday shortened week, as the major indexes all posted gains with
the Nasdaq taking the lead. Volume-wise, the NYSE posted one accumulation day
and one distribution day, while the Naz put in three accumulation days. Things
are looking pretty good. Semiconductors and broker/dealer stocks are well bid,
which is exactly the kind of leadership we expect to see for a good market.

In the breadth department, New 52-week Highs are
maintaining an edge of over the New 52-week Lows, though are not producing big
numbers. Mark Boucher’s
Top
RS and ER List continues to hold a clear bias over a nearly non-existent

Bottom RS and ER List, though is not producing consistent numbers over 20
that indicate clear bullishness.

The stocks on our watch list are for the most part
behaving very well. Our “breakouts” list continues to see new 52-week highs,
though our “handles” list is showing some indecision. We look to the success of
our “breakouts” as a measure of the overall market, and are pleased to see
stocks like GRMN, APOL, and UCBH advance nicely. If this market is for real, we
expect to be adding more names to the successful breakout category. Until then,
we take them as they come, and use absolute discipline when it comes to taking
new trades. If you’re not familiar with the “IT strategy,” be sure to check out
our

intermediate-term online trading course .

From Thursday’s action:

Market breadth was positive, with NYSE advancing issues over declining
issues by a ratio of 2.81, and up volume over down volume by a 5.57 ratio. Nasdaq advancing issues over declining issues came in at
2.14, and up volume
beat down volume by a 4.20 ratio.

Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating)
closed +0.96%
at 8,337.65. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed
+1.55%
at 893.58.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed
+2.20%
at 1,425.50.

Strongest Sectors:

Internet (content), Medical (generic), Telecom (fiber optics), Media
{cable/satellite), Computer (data storage), Internet (service providers).

Watch List Action:

Cocked and ready to go, Chico’s FAS
(
CHS |
Quote |
Chart |
News |
PowerRating) has been extending its handle, and
for the past two weeks has notched in four accumulation days vs. one
distribution day. Technically the pattern fits the smooth and even quality we
like to see from breakout candidates. For a good read on what we’re looking for,
check out our

lesson on handles. This stock has made this report before as a mildly
successful breakout, let’s see what kind of buying it attracts at these levels.

Showing signs of indecision, Corinthian Colleges
(
COCO |
Quote |
Chart |
News |
PowerRating) hit our pivot buy
point, but like its cousin CECO on our handles list, it has failed to bring in
the volume needed for a “buy” signal. Wednesday’s sell off to its 20-day moving
average is a negative, though would be worse if it occurred on heavier volume.
We’re going to reset the pivot buy to 42.61, though so far this one is behaving
like it’s not going to take.

Recent Breakouts

size=2>

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.

color=#ffffff size=2>Company Name	color=#ffffff size=2>Symbol	color=#ffffff size=2>12 Month RS	color=#ffffff size=2>Price	color=#ffffff size=2>Price Change	color=#ffffff size=2>Average Volume	Pivot	52-Week High
Apollo Group	( APOL | Quote | Chart | News | PowerRating)	89	53.75	+2.31	1,940,400	46.89	54.01
Coach Inc.	( COH | Quote | Chart | News | PowerRating)	93	38.13	+1.05	1,154,900	28.35	39.99
Expeditors International of Washington	( EXPD | Quote | Chart | News | PowerRating)	78	35.80	+0.90	1,034,900	34.54	38.00
Garmin Ltd.	( GRMN | Quote | Chart | News | PowerRating)	95	38.78	-0.11	517,400	23.46	39.46
International Game Technology	( IGT | Quote | Chart | News | PowerRating)	87	79.55	+0.84	1,307,900	74.84	87.20
UCBH Holdings	( UCBH | Quote | Chart | News | PowerRating)	86	24.70	+0.40	155,600	22.60	24.70

Stocks Forming a Handle

color=#ffffff size=2>Company Name	color=#ffffff size=2>Symbol	color=#ffffff size=2>12 Month RS	color=#ffffff size=2>Price	color=#ffffff size=2>Price Change	color=#ffffff size=2>Average Volume	Pivot
Boston Scientific	( BSX | Quote | Chart | News | PowerRating)	90	42.19	-0.57	2,469,600	47.65
Chicos FAS	( CHS | Quote | Chart | News | PowerRating)	86	21.85	+0.56	1,393,700	23.05
Career Education Corp.	( CECO | Quote | Chart | News | PowerRating)	88	52.99	+1.34	816,700	54.40
Corinthian Colleges	( COCO | Quote | Chart | News | PowerRating)	88	40.60	+0.94	1,023,500	42.61
Centex Corp.	( CTX | Quote | Chart | News | PowerRating)	84	59.60	+0.38	1,291,000	59.80
Hovnanian	( HOV | Quote | Chart | News | PowerRating)	83	38.80	+0.45	487,800	40.29
New Century Financial	( NCEN | Quote | Chart | News | PowerRating)	88	34.32	+0.72	486,100	34.90

CECO, COCO, and HOV have all had their pivot buys
reset as they failed to produce enough volume to validate “buys” from previous
pivot points. 

Stocks Building A Base

color=#ffffff size=2>Company Name	color=#ffffff size=2>Symbol	color=#ffffff size=2>12 Month RS	color=#ffffff size=2>Price	color=#ffffff size=2>Price Change	color=#ffffff size=2>Average Volume	Pivot
None	Â	Â	Â	Â	Â	Â

Daniel Beighley

If you are new to the “IT” strategy, be sure to
take a look at our

intermediate-term online trading course.

Intermediate-Term Traders
Report is posted on
Tuesdays and Fridays. For other intermediate-term commentary, be sure to read

Mark Boucher (Fridays),

Tim Truebenbach (Tuesdays and Thursdays), and

Gary Kaltbaum (Mondays and Thursdays).