Monday’s Stock Watch

• May 10, 2002
• TradingMarkets Editors

The markets headed south
again, giving back most of the gains made from Wednesday’s powerful rally.
Volume was below average on the NYSE and average on the Nasdaq, as oil services,
gold and silver, and energy represented the only positive sectors of the day,
while airline, Internet, semiconductors, and telecoms were beaten down the
hardest. The total number of new 52-week highs was under the number of new lows,
though both lists were light. Stocks on our watch lists were mostly down. 

Market breadth was negative, with NYSE
declining issues over advancing issues by a ratio of 1.79, and down volume over
up volume by a 4.91 ratio. Nasdaq declining issues over advancing issues came in
at 1.75, and down volume beat up volume by a 7.45 ratio.

The Dow Jones Industrial Average
(
$INDU |
Quote |
Chart |
News |
PowerRating) closed down 0.97% at 9939.92. The S&P 500
(
$SPX |
Quote |
Chart |
News |
PowerRating)
closed down 2.72% at 1054.98.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed down 3.00% at 1600.92.

 

Weekly Perspective:

It was bumpy going for the markets this week, but in the end the
Dow fell 66.68 points for a 0.67% loss, the S&P 500 dropped 18.29 points for a
1.70% shake down, and the Nasdaq slid 12.18 points for a 0.76% decline. For the
past three weeks, the NYSE has made two accumulation days and three distribution
days, while the Nasdaq has made three accumulation days and three distribution
days.

After Wednesday’s powerful move up, we will look for a follow
through day to confirm institutional support beginning next week. As

Lewis Bourselino mentioned on Bloomberg TV, 95% of gaps get filled, and it
is reasonable to perceive this recent gap being filled with some consolidation
in that area. A break below this most recent low will confirm the downtrend
we’ve been in.

This past week we had two breakouts with Chicos FAS
(
CHS |
Quote |
Chart |
News |
PowerRating), as
it launched from over a seven week base, and Christopher & Banks Corp.
(
CHBS |
Quote |
Chart |
News |
PowerRating),
as it moved up from a five week long consolidation pattern. Very few breakouts
have been succeeding in this market, but as always, we hope to follow them north
from here. Until we see breakouts succeeding, we’ll label this a bad market for
IT trading. 

Top sectors:

Oil Service Sector Index
(
$OSX.X |
Quote |
Chart |
News |
PowerRating), up 2.22% at
116.01.

Gold and Silver Index
(
$XAU.X |
Quote |
Chart |
News |
PowerRating),
up 1.73% at 79.92.

Losing sectors:

Airline
Index
(
$XAL.X |
Quote |
Chart |
News |
PowerRating) down
6.87% at
78.75.

North American Telecoms
Index
(
$XTC.X |
Quote |
Chart |
News |
PowerRating)
down 5.66% at 502.53.

Sectors with Most New 52-Week Highs:

Banking – 19

Retail – 10

Watch List Action:

Christopher & Banks Co.
(
CHBS |
Quote |
Chart |
News |
PowerRating) retreated from its breakout yesterday
by giving back 0.350% on below average volume. It’s a positive sign to see down
days supported with lower volume.

Beazer Homes
(
BZH |
Quote |
Chart |
News |
PowerRating) was our biggest loser of the day as it fell 5.47% on
below average volume. At its low today, the stock was down a little over 10
percent from the high of its handle. If the stock falls more than 10 to 15
percent from the high of its handle we will consider the pattern a failure. This
one is pushing it.                      

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.

Chicos FAS Inc.
(
CHS |
Quote |
Chart |
News |
PowerRating), down 3.94% on
above-average volume.

Christopher & Banks Corporation
(
CHBS |
Quote |
Chart |
News |
PowerRating), down
0.35% on below-average volume.

Group 1 Automotive
(
GPI |
Quote |
Chart |
News |
PowerRating), up 0.25% on
below-average volume.

size=2>Panera Bread Co
(
PNRA |
Quote |
Chart |
News |
PowerRating), down 0.99%

on above-average
volume for a distribution day.

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
Chicos FAS Inc.	( CHS | Quote | Chart | News | PowerRating)	94	38.70	– 1.59	659,100	38.08	40.73
Christopher & Banks	( CHBS | Quote | Chart | News | PowerRating)	92	39.76	– 0.14	518,100	33.60	39.25
Group 1 Automotive	( GPI | Quote | Chart | News | PowerRating)	95	50.15	+ 0.13	277,600	42.23	46.72
size=2>Panera Bread Co	size=2> ( PNRA | Quote | Chart | News | PowerRating)	92	67.33	– 0.68	408,700	66.74	72.05

Stocks Forming a Handle

Beazer Homes
(
BZH |
Quote |
Chart |
News |
PowerRating), down 5.47%
size=2>
on below-average volume.

DR Horton Inc.
(
DHI |
Quote |
Chart |
News |
PowerRating), down 2.55% on
below-average volume.

Right Mgt. Consultants
(
RMCI |
Quote |
Chart |
News |
PowerRating), up 0.32% on
low 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
Beazer Homes	( BZH | Quote | Chart | News | PowerRating)	79	83.18	– 4.82	596,800	91.45
DR Horton Inc.	( DHI | Quote | Chart | News | PowerRating)	87	25.17	– 0.72	2,271,800	27.14
Right Mgt. Consultants	( RMCI | Quote | Chart | News | PowerRating)	90	27.60	+ 0.23	307,700	28.95

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
None

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

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