Monday’s Stock Watch
The major averages put in
losses for the week, as volume on the exchanges accounted for one day
of accumulation, and one day of distribution. Monday’s key reversal day marked
the week’s high.
From a news perspective, things couldn’t have been
much better. Coalition forces appeared to have decisively won the war in Iraq,
and economic news came in with multiple upside surprises. With the Dow and S&P
parked just under their 200-day moving averages, bulls would rather see good
news sponsored by buyers, not sellers. Next week 1/3 of the Dow Industrial
stocks will report earnings to potentially create a stimulus for a new trend to
emerge.
Breadth-wise, the week showed us little in the way
of a clear bias. New 52-week Highs and Lows, as well as Mark Boucher’s
Top
RS and ER List and
Bottom RS and ER List continued to produce relatively low numbers.
Stocks on our watch list put in mixed results for
the week. We saw some distribution from a couple on our breakout list, though as
a whole we didn’t lose much ground. We will be looking for new stars to emerge
from this earnings season, though are not holding our breath. The search goes on
for new stocks meeting our top fundamental and technical properties.
From Friday’s action:
Market breadth was mostly negative, with NYSE
advancing issues over declining issues by a ratio of 1.003, and down volume over
up volume by a 1.01 ratio. Nasdaq declining issues over advancing issues came in
at 1.13, and down volume beat up volume by a 1.26 ratio.
Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating)
closed -0.21%
at 8,203.41. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed
-0.37%
at 868.30.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed
-0.49%
at 1,358.85.
1,508
1,431
Declining Issues
1,518
1,631
561,730,000
563,743,000
Declining Volume
520,326,000
637,961,000
Total
Volume
1,107,573,000
1,219,761,000
Highs
10
11
7
8
Strongest Sectors:
Media (cable/satellite), Internet -(e-commerce), Internet (service providers),
Internet (content), Semiconductors, Telecoms (fiber optics).
Watch List Action:
Our latest breakout, UCBH Holdings
(
UCBH |
Quote |
Chart |
News |
PowerRating) is holding ground above
its pivot point, though has put in three distribution days in the last five
sessions. This is not what we want to see here. The stock has also gone through
a 2 for 1 stock split. Splits can be an indication of a stock reaching the
height of its valuation. In many cases the company feels the need to split the
stock to make it more attractive to investors. I can’t speak for the company,
but technically we have our warning signs.
From our “handles” list, Chico’s FAS
(
CHS |
Quote |
Chart |
News |
PowerRating) continues to pull back in
a handle. The volume looks good as it decreases with sellers, though the price
action is choppy, and not what we look for in a good handle. For the past month
this clothing retailer’s stock has made seven accumulation days, and two
distribution days.
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 | 51.52 | -0.10 | 1,940,400 | 46.89 | 52.50 |
Coach Inc. | ( COH | Quote | Chart | News | PowerRating) | 93 | 38.50 | -0.47 | 1,154,900 | 28.35 | 39.99 |
Expeditors International of Washington | ( EXPD | Quote | Chart | News | PowerRating) | 81 | 33.87 | -0.83 | 1,034,900 | 34.54 | 38.00 |
Garmin Ltd. | ( GRMN | Quote | Chart | News | PowerRating) | 95 | 35.50 | +0.34 | 517,400 | 23.46 | 37.20 |
International Game Technology | ( IGT | Quote | Chart | News | PowerRating) | 87 | 79.42 | +0.42 | 1,307,900 | 74.84 | 87.20 |
UCBH Holdings | UCBH Holdings | 86 | 23.97 | -0.02 | 155,600 | 22.60 | 24.35 |
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 |
Chicos FAS | ( CHS | Quote | Chart | News | PowerRating) | 86 | 21.60 | -0.38 | 1,393,700 | 23.05 |
Career Education Corp. | ( CECO | Quote | Chart | News | PowerRating) | 88 | 51.85 | +1.14 | 816,700 | 52.70 |
Corinthian Colleges | ( COCO | Quote | Chart | News | PowerRating) | 87 | 39.87 | +0.26 | 1,023,500 | 42.04 |
Hovnanian | ( HOV | Quote | Chart | News | PowerRating) | 86 | 36.86 | -1.06 | 487,800 | 38.45 |
New Century Financial | ( NCEN | Quote | Chart | News | PowerRating) | 88 | 31.99 | +0.15 | 1,422,000 | 34.90 |
HOV has been moved from the “base” list to the
“handles” 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).