Monday’s Stock Watch

  • October 18, 2002
  • TradingMarkets Editors


The markets posted another
week of solid gains, with all three major indexes closing above their 50-day
moving averages. This past week the NYSE and Nasdaq made two days of
accumulation, with no distribution. Follow through has been made, and the search
for signs of strength in this market is now focused on leadership.



So far the buying has been broad based, though the
new 52-week highs have yet to dominate the lows, and Mark Boucher‘s
Top
RS and ER List has yet to turn bullish. The

Bottom RS and ER List has tapered off some. Current leadership is in health
services.



Stocks on our watch list are alive, though
distribution in key breakouts is a red flag to potential downside in the near
future. We have added two new stocks to our “building a base” list, which have
had a great week. The search continues for stocks meeting our top technical and
fundamental criteria.



From Friday’s action:



Market breadth was mostly positive, with NYSE
declining issues over advancing issues by a ratio of 1.06, and up volume over
down volume by a 1.15 ratio. Nasdaq advancing issues over declining issues came
in at 1.08, and up volume beat down volume by a 1.59 ratio.




The Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating)
closed +0.57%
at 8322.40. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
closed +0.58% at
884.38.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed
+1.22% at
1,287.87.





 




cellPadding=0 width=”70%” border=1 height=”180″>

































  NYSE size=2>NASDAQ
Advancing Issues
1,456
1,710

Declining  Issues
1,566
1,573
Advancing Volume
726,298,000
1,009,101,000
Declining Volume

646,560,000
645,367,000

Total
Volume

1,392,281,000
1,663,222,000
New 52-week
Highs
7
3
New 52-week Lows
12
4

Top sectors:

Health Services and Medical Appliances & Equipment.

Losing sectors:


Semiconductors, Major Airlines, Software, Telecoms, Internet,
Homebuilders, and Tobacco.

Watch List Action:


The oldest stock on our “breakout” list, Apollo Group
(
APOL |
Quote |
Chart |
News |
PowerRating) showed some
weakness at the end of the week with distribution Thursday, and a down day
against a positive market Friday. For the past three weeks, the stock has made
two days of accumulation and four days of distribution.





New to our “breakout” list, Wellpoint Networks
(
WLP |
Quote |
Chart |
News |
PowerRating) posted a distribution
day Thursday, as it made a new 52-week high. The stock closed well Friday, and
will be closely watched as an indication of how new breakouts will do in this
market.





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)
96
43.41
-0.72
2,447,700
39.60
46.15

Brown & Brown

(
BRO |
Quote |
Chart |
News |
PowerRating)
82
32.45
+0.22
243,300
31.59
 37.00

Education Mgt. Co.

(
EDMC |
Quote |
Chart |
News |
PowerRating)
92
44.67
+0.10
360,400
44.58
46.65

Hovnanian Enterprises

(
HOV |
Quote |
Chart |
News |
PowerRating)
99
36.66
-0.69
739,100
32.90
40.56

International Game Technology

(
IGT |
Quote |
Chart |
News |
PowerRating)
94
70.30
+0.28
931,200
66.70
71.95

Mid Atlantic Medical Services

(
MME |
Quote |
Chart |
News |
PowerRating)
98
41.50
+0.44
533,800
38.83
43.20

Wellpoint Health Network

(
WLP |
Quote |
Chart |
News |
PowerRating)
94
86.67
+1.16
1,358,000
79.05
89.20

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

None
 
 
 
 
 
 

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

Commerce Bancorp.

(
CBH |
Quote |
Chart |
News |
PowerRating)
88
46.96
+0.63
747,000

Ross Stores Inc.

(
ROST |
Quote |
Chart |
News |
PowerRating)
90
42.99
+1.06
1,003,300

href=”mailto:danielb@tradingmarkets.com”>danielb@tradingmarkets.com


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).