Monday’s Stock Watch
The major averages posted
another round of gains for the week, with technology issues leading
the charge. Discounting holiday volume from Monday’s session, this past week the
NYSE made one minor accumulation day with no distribution, and the Nasdaq made
one clear day of accumulation with no distribution.
Despite downgrades to key Dow stocks, mixed economic
data, and threats of terrorism against the country, the markets continue to
maintain their bullish course. This is a clear message that market players don’t
care about what might be wrong, and an important component for establishing some
durability for a potential intermediate term bottom.
However, the condition of market breadth remains
unchanged from past weeks. New 52-week highs have yet to produce numbers
reflecting real enthusiasm for the upside, and Mark Boucher‘s
Top
RS and ER List has yet to post consistent bullish numbers of 20+.
Neutralizing the situation, new 52-week lows and
Bottom RS and ER List remain quiet.
Stocks on our watch list appear to be in decent
shape, as issues on our “handles” list are poised to break out, and recent
“breakouts” are holding ground. We’d like to see new breakouts across the market
succeed, and until then we have to be cautious in this environment. The search
for top quality stocks meeting our fundamental and technical criteria continues.
From Friday’s action:
Market breadth was mostly positive, with NYSE
advancing issues over declining issues by a ratio of 1.46, and up volume over
down volume by a 2.27 ratio. Nasdaq declining issues over advancing issues came
in at 1.11, and up volume beat down volume by a 1.50 ratio.
Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating)
closed +0.42%
at 8578.26. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
closed 0.60% at
909.74.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed
-0.99% at
1,410.53.
1,803
1,561
Declining Issues
1,273
1,729
920,276,000
895,841,000
405,921,000
756,692,000
Total
Volume
1,359,237,000
1,671,724,000
Highs
15
18
9
3
Top sectors:
Short-term: Internet, Telecoms, Software.
Long-term: Gold, Defense, Consumer.
Watch List Action:
Ready to launch, Ross Stores
(
ROST |
Quote |
Chart |
News |
PowerRating) made an accumulation day Friday, and
appears set to break out. Of course, we trade what is, and are now looking for a
high volume move through the pivot buy point of 45.59. In analyzing the
technical pattern, the accumulation up the right side is absent, and the handle
is choppy. This takes away from the potential success of a breakout. We’ll see
what this one can do.
Also poised to break out is Expedia Inc.
(
EXPE |
Quote |
Chart |
News |
PowerRating), as it challenges its recent
highs. The handle on this one is flawed with heavy distribution from last
Wednesday, when it was reported the company would suffer from new regulations
involving airline tickets and carriers. Watch the volume on this one, as with
all potential breakouts, we’re not interested unless the stock moves through its
pivot on at least 40 percent over its daily average.
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) | 91 | 42.40 | -0.03 | 2,615,000 | 39.60 | 46.15 |
Coach Inc. | ( COH | Quote | Chart | News | PowerRating) | 93 | 31.50 | +0.42 | 979,000 | 29.80 | 33.09 |
Hovnanian Enterprises | ( HOV | Quote | Chart | News | PowerRating) | 97 | 34.00 | +0.14 | 876,900 | 33.56 | 40.56 |
International Game Technology | ( IGT | Quote | Chart | News | PowerRating) | 91 | 77.06 | +0.56 | 1,077,800 | 75.47 | 78.40 |
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 |
Commerce Bancorp. | ( CBH | Quote | Chart | News | PowerRating) | 70 | 44.10 | -0.82 | 755,600 | 47.80 |
Expedia | ( EXPE | Quote | Chart | News | PowerRating) | 97 | 74.32 | +1.85 | 2,378,800 | 76.44 |
Mentor Corp. | ( MNTR | Quote | Chart | News | PowerRating) | 88 | 39.74 | -1.10 | 240,300 | 41.50 |
Ross Stores Inc. | ( ROST | Quote | Chart | News | PowerRating) | 91 | 44.95 | +0.97 | 1,096,000 | 45.59 |
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 |
Garmin Ltd. | ( GRMN | Quote | Chart | News | PowerRating) | 87 | 23.30 | +0.30 | 152,900 | 24.35 |
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).