Monday’s Stock Watch

• May 17, 2002
• TradingMarkets Editors

The major indexes closed
slightly positive, with the Nasdaq locking in its biggest winning week in seven
months. Volume was below average, as gold and silver, biotechnology,
Internet, and pharmaceuticals made the biggest gains, with oil service and energy
related stocks the biggest losers. New 52-week highs were tame, with the lows
list almost non-existent. We had a breakout from our handles list.

Market breadth was positive, with NYSE
advancing issues over declining issues by a ratio of 1.24, and up volume over
down volume by a 1.45 ratio. Nasdaq advancing issues over declining issues came
in at 1.17, and up volume beat down volume by a 2.20 ratio.

The Dow Jones Industrial Average
(
$INDU |
Quote |
Chart |
News |
PowerRating) closed up 0.62% at 10353.08. The S&P 500
(
$SPX |
Quote |
Chart |
News |
PowerRating)
closed up 0.75% at 1106.57.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed up 0.63 at 1741.38.

 

Weekly Perspective:

It was a huge week for stocks, as the
Dow cruised up 412.16 points for a 4.16% rise, the S&P 500 advanced 51.6 points
for a 4.89% increase, and the Nasdaq blasted 140.54 points for a 8.78% gain. For
the past three weeks, NYSE volume has accounted for three accumulation days and
two distribution days, and the Nasdaq has made three accumulation days and three
distribution days.

Currently the Dow is trading above its
50-day and 200-day moving averages, while the S&P 500 and Nasdaq are below these
levels. Despite the week’s huge upside move, there was little participation from
Boucher’s
Top
RS and ER List, as two of days were under the bullish 20 level. Overall
volume was also left to be desired. On a positive note, we had a breakout from
our “handles” list, as Right Management Consultants
(
RMCI |
Quote |
Chart |
News |
PowerRating) took off. We
will watch this closely to see if it can sustain its momentum.

Top sectors:

Gold and Silver Index
(
$XAU.X |
Quote |
Chart |
News |
PowerRating), up 4.38% at
80.67.

Biotechnology Index
(
$BTK.X |
Quote |
Chart |
News |
PowerRating),
up 2.81% at 42.04.

Losing sectors:

Oil
Service Sector
Index
(
$OSX.X |
Quote |
Chart |
News |
PowerRating) down
2.29% at
104.91.

Natural
Gas
Index
(
$XNG.X |
Quote |
Chart |
News |
PowerRating)
down 1.47% at 176.92.

Sectors with Most New 52-Week Highs:

Banking – 26

Consumer Non-Durables – 12

Watch List Action:

Right Management Consultants
(
RMCI |
Quote |
Chart |
News |
PowerRating) broke out today with a 12.54% rise
on over four times average volume. As mentioned before, the handle is flawed in
many ways, especially with two previous breakouts that failed. Today’s breakout
was on higher volume than the previous two, which will hopefully propel it to
new heights. We will now watch this from the “recent breakouts” list for signs
of overall market strength.

From our “handles” list, Winnebago Industries
(
WGO |
Quote |
Chart |
News |
PowerRating) rose 1.72% on light
volume. The stock is poised to break out, though has formed a poor-looking chart
pattern that takes away from the likelihood that it will be a successful IT candidate. In
this case the base is choppy with signs of distribution. The handle is trending
upward, instead of the downward movement we like to see. As with all of the
stocks on our “handles” list, red flags are present, so buyer beware.

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), up 1.61% on less than
half its average volume.

Christopher & Banks Corporation
(
CHBS |
Quote |
Chart |
News |
PowerRating), up
1.35% on light volume.

Group 1 Automotive
(
GPI |
Quote |
Chart |
News |
PowerRating), down 1.36% on
below-average volume for a distribution day.

size=2>Panera Bread Co
(
PNRA |
Quote |
Chart |
News |
PowerRating), up 3.47%

on average volume for
an accumulation 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)	93	40.93	+ 0.65	609,000	38.08	42
Christopher & Banks	( CHBS | Quote | Chart | News | PowerRating)	93	41.04	+ 0.50	437,800	33.60	42.45
Group 1 Automotive	( GPI | Quote | Chart | News | PowerRating)	95	48.55	– 0.67	261,400	42.23	50.08
size=2>Panera Bread Co	size=2> ( PNRA | Quote | Chart | News | PowerRating)	89	69.75	+ 2.34	401,000	66.74	73.60

Stocks Forming a Handle

DR Horton Inc.
(
DHI |
Quote |
Chart |
News |
PowerRating), up 2.79% on below-average
volume.

Right Mgt. Consultants
(
RMCI |
Quote |
Chart |
News |
PowerRating), up 12.54% on
over four times average volume.

Winnebago Industries
(
WGO |
Quote |
Chart |
News |
PowerRating) up 1.72% 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
DR Horton Inc.	( DHI | Quote | Chart | News | PowerRating)	85	25.77	+ 0.70	2,132,800	27.14
Right Mgt. Consultants	( RMCI | Quote | Chart | News | PowerRating)	91	31.23	+ 3.48	290,200	28.95
Winnebago Industries	( WGO | Quote | Chart | News | PowerRating)	94	49.55	+ 0.84	232,700	49.60

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

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