Monday’s Stock Watch
The major averages posted slight gains for the
week, with volume on the NYSE and Nasdaq accounting for a day of
accumulation and distribution apiece. The Dow and S&P 500 are just below their
200-day moving averages, while the Nasdaq is over 40 points above this mark.
The markets showed strength by rallying against a
series of disappointing economic data. The Chicago PMI, ISM Index, factory
orders, initial claims, ISM Services, and nonfarm payrolls all came in worse
than expected.
Showing strength were financial stocks, including
the market leading broker/dealers and banks. Technology issues lost some of
their recent sparkle, with the semiconductor index closing the week unchanged in
an indecisive “doji” candlestick pattern.
Market breadth has been just slightly bullish, with
new 52-week Highs holding a small edge over the Lows, and Mark Boucher’s
Top
RS and ER List giving us nearly consistent bullish readings of 20+, with theÂ
Bottom RS and ER List list producing only one bearish reading of over 20.
The main issue at hand remains the war in Iraq. The
markets have been holding ground as coalition troops stand just outside Baghdad.
With market sentiment coinciding with military progress, it appears what is
lining up to be a battle for Baghdad may have a significant effect on price
action.
Stocks on our watch list are doing well. We have a
new breakout from UCBH Holdings, and our “breakouts” as a group are showing us
positive signs. It is important to see our breakouts do well as they increase
the chances of new breakouts succeeding.
From Friday’s action:
Market breadth was mixed, with NYSE advancing issues over declining
issues by a ratio of 1.22, and up volume over down volume by a 1.16 ratio. Nasdaq declining issues over advancing issues came in
at 1.19, and up volume beat down volume by a 2.00 ratio.
Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating)
closed +0.44%
at 8,277.15. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed
+0.27%
at 878.85.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed -0.93%
at 1,383.49.
1,681
1,414
Declining Issues
1,374
1,688
662,502,000
442,385,000
Declining Volume
535,503,000
892,349,000
Total
Volume
1,214,879,000
1,360,543,000
Highs
13
12
5
9
Strongest Sectors:
Telecoms (fiber optics), Internet (e-commerce), Internet (service providers),
Semiconductors, Data storage, Media (cable/satellite).
Watch List Action:
Breaking out Wednesday on over 60% of its average volume we had UCBH Holdings
(
UCBH |
Quote |
Chart |
News |
PowerRating) as it continued to make a new 52-week highs into Friday. This
holding company for United Commercial Bank meets all of our top fundamental
criteria, and had its strength confirmed by sector peer Heritage Financial
(
HFWA |
Quote |
Chart |
News |
PowerRating).
It is important for us to see similar stocks doing well as it increases the
chances of this one succeeding.
Alive and well as a breakout we have Apollo Group
(
APOL |
Quote |
Chart |
News |
PowerRating). The stock
has been declining on light volume for the past three sessions and remains above
its major moving averages. We like to see down days sponsored by light volume as
it indicates sellers drying up. This has been a long standing member of this
report, and its weekly chart shows an impressive climb against a horrible
overall market. Gotta love it.
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) | 88 | 49.80 | -0.72 | 1,940,400 | 46.89 | 52.50 |
Coach Inc. | ( COH | Quote | Chart | News | PowerRating) | 92 | 38.54 | -0.29 | 1,154,900 | 28.35 | 39.99 |
Expeditors International of Washington | ( EXPD | Quote | Chart | News | PowerRating) | 81 | 35.73 | +0.47 | 1,034,900 | 34.54 | 38.00 |
Garmin Ltd. | ( GRMN | Quote | Chart | News | PowerRating) | 96 | 35.46 | -1.02 | 517,400 | 23.46 | 37.20 |
International Game Technology | ( IGT | Quote | Chart | News | PowerRating) | 87 | 82.18 | +1.16 | 1,307,900 | 74.84 | 87.20 |
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 |
CECO | ( CECO | Quote | Chart | News | PowerRating) | 86 | 50.45 | -0.90 | 816,700 | 51.65 |
UCBH Holdings | ( UCBH | Quote | Chart | News | PowerRating) | 83 | 47.31 | +1.47 | 155,600 | 45.20 |
UCBH will be moving up to the “breakout” list.
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 |
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).