Monday’s Stock Watch

• September 6, 2002
• TradingMarkets Editors

It was another negative
week for the markets, as the major indexes lost ground on below average volume.
In total, the NYSE made two distribution days with no accumulation days, and the
Nasdaq made one distribution day and one accumulation day.

Mark Boucher‘s
Top
RS and ER List and

Bottom RS and ER List continue to lean towards the bears, while 52-week
highs vs. lows also favor the downside.

The markets reacted positively to Friday’s
employment report, though speculation of short covering, and fears of issues
pertaining to America’s relationship with Iraq are given as reasons for this
market to continue downward.

Stocks on this report had a decent week, with two
new breakouts added to our list. We will now watch these stocks as an indication
of strength for the overall market.

Sectors exhibiting current strength are gold and
silver, health services, medical appliances, auto parts, and selected wholesale.

Sectors exhibiting current weakness are
semiconductors, software, and computer technology.

From Tuesday’s action:

Market breadth was negative, with NYSE
declining issues over advancing issues by a ratio of 4.20, and down volume over
up volume by a 10.70 ratio. Nasdaq declining issues over advancing issues came in
at 3.47, and down volume beat up volume by a 15.49 ratio.

The Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating) closed down 4.10% at 8308.05. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
closed down 4.15% at 878.02.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed down 3.88% at 1263.83.

 

Top sectors:

Internet
(
$DOT.X |
Quote |
Chart |
News |
PowerRating), +6.04%, 
Telecoms
(
$IXTC.X |
Quote |
Chart |
News |
PowerRating), +5.21%, Semiconductors
(
$GSM.X |
Quote |
Chart |
News |
PowerRating),
+5.14%, and Software
(
$GSO.X |
Quote |
Chart |
News |
PowerRating), +4.77%.

Losing sectors:

Pharmaceuticals
(
$DRG.X |
Quote |
Chart |
News |
PowerRating),
-0.21%, Healthcare
(
$HCX.X |
Quote |
Chart |
News |
PowerRating), -0.19%.

Sectors with Most New 52-Week Highs (10 or more):

None

Watch List Action:

Coach Inc.
(
COH |
Quote |
Chart |
News |
PowerRating) now joins our list of recent breakouts, as it traded
through its pivot buy point 9/4 on over twice average volume. So far so good.
The stock still has the hurdle of its 52-week high at 30.12 to beat. As a
reminder, this weak market along with a sloppy base take away from the
likelihood of this one succeeding.

Also on our “breakout” list,
Corinthian Colleges
(
COCO |
Quote |
Chart |
News |
PowerRating) is holding its gains since breaking out 8/29.
The volume pattern may also be supporting the bullish cause here as it decreased
on its down days, though Friday’s showing is less than desired.

Hovnanian Enterprises
(
HOV |
Quote |
Chart |
News |
PowerRating) also joins our list of recent breakouts by
trading on over three times average volume through its pivot buy point on 9/4.
This home builder meets all of our top technical and fundamental criteria, and
hasn’t looked back since its breakout. We may see another handle form as it
approaches its 52-week high, but the heavy accumulation is looking very nice at
this point.

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)	94	41.71	+1.11	2,493,400	39.60	43.27
Coach Inc.	( COH | Quote | Chart | News | PowerRating)	93	29.18	+1.46	1,158,500	28.35	30.12
Corinthian Colleges	( COCO | Quote | Chart | News | PowerRating)	97	36.50	+1.32	881,800	34.69	38.00
Hovnanian Enterprises	( HOV | Quote | Chart | News | PowerRating)	98	36.96	+1.51	491,400	33.56	38.75

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
International Game Technology	( IGT | Quote | Chart | News | PowerRating)	74	64.25	+0.85	967,400	66.70
Kohl’s Corporation	( KSS | Quote | Chart | News | PowerRating)	74	68.94	+1.04	2,557,300	73.75
Mid Atlantic Medical Services	( MME | Quote | Chart | News | PowerRating)	94	35.23	+0.28	668,600	37.87
Penn National Gaming	( PENN | Quote | Chart | News | PowerRating)	94	19.11	+1.10	329,100	20.12
Alliant Techsystems	( ATK | Quote | Chart | News | PowerRating)	90	68.83	+0.23	483,200	69.95

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
Wellpoint Health Network	( WLP | Quote | Chart | News | PowerRating)	88	74.44	+0.16	1,785,400

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 Trader’s 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).