Monday’s Stock Watch
Bulls returned to the
market for a shortened session, as light volume accompanied the major indexes to
impressive gains. The biggest advancers were semiconductors,
networking, Internet, computer technology, and broker/dealers, as gold and
silver was the only sector in the red. New 52-week lows stayed the trend with
dominance over new 52-week highs, with drugs, telecommunications, and
electronics putting up the biggest numbers. Stocks on our watch list were all
green.
Market breadth was positive, with NYSE
advancing issues over declining issues by a ratio of 4.08, and up volume over
down volume by a 15.13 ratio. Nasdaq advancing issues over declining issues came
in at 2.60, and up volume beat down volume by a 9.76 ratio.
The Dow Jones Industrial Average
(
$INDU |
Quote |
Chart |
News |
PowerRating) closed up 3.58% at 9379.85. The S&P 500
(
$SPX |
Quote |
Chart |
News |
PowerRating)
closed up 3.67% at 989.05.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed up
4.93% at 1448.30.
Â
 2,443
 2,287
Declining Issues
 550
789
 764,685,760
 661,513,200
 50,870,740
 54,762,100
Total
Volume
 816,661,200
 727,946,400
Highs
  65
 68
 111
172
Weekly:
It was a rough ride for the markets this shortened holiday week,
as the Dow fell 1.88.29 points for a 2.03% decline, the S&P 500 slipped 0.79
points for a minor loss, and the Nasdaq dropped 14.85 points for a 1.01% loss.
For the past three weeks, NYSE volume has accounted for one accumulation day
with five distribution days, as the Nasdaq made three accumulation days with
three distribution days.
At this point in the game there is potential for a double bottom
to form on the S&P 500 and Nasdaq, given the tails on the weekly charts. Only
time will tell. We will be looking for volume to come in on the upside to
indicate follow through. All three major indexes have been below their major
averages for weeks now.
Meanwhile the quest for stocks meeting our fundamental and
technical criteria continues, though few candidates are found. This week we
eliminated Group 1 Automotive
(
GPI |
Quote |
Chart |
News |
PowerRating), Panera Bread Company
(
PNRA |
Quote |
Chart |
News |
PowerRating), and
Dollar Tree Sores
(
DLTR |
Quote |
Chart |
News |
PowerRating). Added to the list were apparel and accessory
company Coach Inc.
(
COH |
Quote |
Chart |
News |
PowerRating) and casino and gaming company Penn National Gaming
(
PENN |
Quote |
Chart |
News |
PowerRating).
Top sectors:
Semiconductor Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), up 8.99% at
395.87.
Networking Index
(
$NWX.X |
Quote |
Chart |
News |
PowerRating), up 5.49% at 172.52.
Losing sectors:
Gold and Silver Index
(
$XAU.X |
Quote |
Chart |
News |
PowerRating), down 1.34% at
69..62.
Sectors with Most New 52-Week Highs (10 or more):
Banking – 11
Watch List Action:
Apollo Group was up 1.90% on below average volume. The stock is trading in
handle which could merit a breakout. We’d rather see more accumulation up the
right side of the base, but we’ll see if anything happens.
Penn National Gaming
(
PENN |
Quote |
Chart |
News |
PowerRating) was our biggest gainer of the day as it rose
5.36% on low volume. Wednesday’s low has strong potential to be the second point
of a double bottom, and we will look for accumulation of the stock as it forms
what could be the right side of the base.
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.
Christopher & Banks
(
CHBS |
Quote |
Chart |
News |
PowerRating), up 2.92% on
light volume.
| 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 |
Christopher & Banks | ( CHBS | Quote | Chart | News | PowerRating) | 95 | 41.19 | + 1.17 | 357,000 | 33.60 | 42.45 |
Stocks Forming a Handle
Apollo Group Inc.
(
APOL |
Quote |
Chart |
News |
PowerRating), up 1.87% size=2>
on
light volume.
| 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 |
Apollo Group Inc. | ( APOL | Quote | Chart | News | PowerRating) | 83 | 39.10 | + 0.72 | 2,314,200 | 40.08 |
Stocks Building A Base
Coach Inc.
(
COH |
Quote |
Chart |
News |
PowerRating), up 5.08% size=2>
on
light volume.
DR Horton Inc.
(
DHI |
Quote |
Chart |
News |
PowerRating), up 3.53% size=2>
on
light volume.
Penn National Gaming
(
PENN |
Quote |
Chart |
News |
PowerRating), up 0.85% size=2>
on
light volume for an accumulation day.
Winnebago Industries
(
WGO |
Quote |
Chart |
News |
PowerRating), up 3.56% size=2>
on
light volume.
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 |
Coach Inc. | ( COH | Quote | Chart | News | PowerRating) | 91 | 25.81 | + 0.59 | 1,214,600 |
DR Horton Inc. | ( DHI | Quote | Chart | News | PowerRating) | 88 | 26.08 | + 0.89 | 1,392,200 |
Penn National Gaming | ( PENN | Quote | Chart | News | PowerRating) | 88 | 16.70 | + 0.85 | 606,300 |
Winnebago Industries | ( WGO | Quote | Chart | News | PowerRating) | 89 | 45.07 | + 1.55 | 217,600 |
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.