Monday’s Stock Watch

February 1, 2002
TradingMarkets Editors

The markets flirted
with key technical levels today, with the
major averages closing out with losses after two days of good gains.
Biotechnology and health care issues led the action, with Internet stocks lagging in the red. The Dow touched and fell below its 50-day moving average, as
the Nasdaq touched and fell below its 200-day moving average. Stocks on our
watch list had an interesting day, with near breakouts, and a stop loss
triggered.

Market breadth was negative, with NYSE
declining issues over advancing issues by a ratio of 1.16, and down volume
over up volume by a 1.70 ratio. Nasdaq declining issues over advancing issues came in
at 1.29, and down volume beat up volume by a 2.34 ratio.

cellPadding=0 width=”70%” border=1 height=”202″>

	NYSE	size=2>NASDAQ
Advancing Issues	1,446	1,557
Declining Issues	1,670	2,002
Advancing Volume	500,673,000	498,987,000
Declining Volume	851,569,000	1,168,790,000
Total Volume	1,365,601,000	1,700,678,000
New 52-week Highs	37	28
New 52-week Lows	5	5

Weekly Perspective:

This past week proved to be a volatile
and volume packed one for the indexes, with little price change at the end. The
Dow finished up 67.18 points for a 0.06% gain, the S&P 500 finished down 11.08
points for a 0.09% loss, and the Nasdaq finished down 26.46 points for a 1.3%
loss. Meanwhile all three indexes remain below their ever important 50- and
200-day moving averages.

With the Nasdaq notching in a day of
distribution followed by a day of accumulation, and a key reversal day to the
upside, it appears that the buying crowd won’t easily give up the ship. Key data
fed to the markets revealed an economy that appears to be on the rebound, though
that picture is never truly completed. With more economic and earnings data to
be released this upcoming week, we need follow through in the market to indicate
a bullish bias. At present the indexes are below their 50- and 200- day moving
averages, which makes this market highly suspect. The possibility of a trading
range like we saw last summer in June and August may very well be another
reality for us. In the meantime, we continue to seek without reward, stocks that
meet our fundamental and technical criteria for indications of strength in this
market.

Top sectors of the week were
restaurants, REITs, business services, medical, and trucking.

Top sectors:

Gold and Silver Index

(
$XAU.X |
Quote |
Chart |
News |
PowerRating) up 4.65% at 79.60.

Biotechnology Index
(
$BTK.X |
Quote |
Chart |
News |
PowerRating) up
1.96% at 509.84.

Losing sectors:

Morgan Stanley Internet Index
(
$MOX.X |
Quote |
Chart |
News |
PowerRating)
down 2.64% at 12.89.

Networking Index
(
$NWX.X |
Quote |
Chart |
News |
PowerRating) down
2.37% to 309.55.

Sectors With New
Highs:

Watch List Action

Direct Focus Inc.
(
DFXI |
Quote |
Chart |
News |
PowerRating) fell 1.53% on below-average volume for a
distribution day. The stock is forming a pennant formation from its 1/23 gap-up
day, which we would like to see finished with a bullish move.

From our “Stocks Forming a Handle” list, Integra Lifesciences
(
IART |
Quote |
Chart |
News |
PowerRating)
gained 2.84% on 39% above-average volume, making a new 52-week high. The stock’s
former high on the right side of its base was 32.20, making 32.30 the pivot buy
point. We are not going to qualify this as a break out just yet, because we
would like to see more volume support the move. Monday’s price action may
provide just the ticket for this medical products company, though this market
has yet to prove itself for our IT candidates, making an opportunity less
attractive.

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.

size=2>American Healthways Inc.
(
AMHC |
Quote |
Chart |
News |
PowerRating), down 4.53% on below average
volume. The stock’s low today triggered a 7% stop loss from a 26.89 pivot buy
point, though we will keep this on the list for those who may have purchased
higher, or are using an 8% stop loss.

size=2>Copart Inc.
(
CPRT |
Quote |
Chart |
News |
PowerRating), up 1.94% on average volume.

size=2>Genesis Microchip
(
GNSS |
Quote |
Chart |
News |
PowerRating), down 1.09% on below-average volume.

MTR Gaming Group
(
MNTG |
Quote |
Chart |
News |
PowerRating), down 1.51% on very low
volume.

size=2>Nvidia Corp.
(
NVDA |
Quote |
Chart |
News |
PowerRating), down 2.44% on low volume.

Panera Bread Co.
(
PNRA |
Quote |
Chart |
News |
PowerRating), down 1.80% on average volume.

size=2>PEC Solutions
(
PECS |
Quote |
Chart |
News |
PowerRating), down 5.12% on low 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
size=2>American Healthways Inc.	size=2> ( AMHC \| Quote \| Chart \| News \| PowerRating)	94	25.90	– 1.23	326,300
size=2>Copart Inc.	size=2> ( CPRT \| Quote \| Chart \| News \| PowerRating)	85	23.04	+ 0.44	1,053,000
size=2>Direct Focus Inc.	size=2> ( DFXI \| Quote \| Chart \| News \| PowerRating)	92	35.16	– 0.55	837,100
size=2>Genesis Microchip	size=2> ( GNSS \| Quote \| Chart \| News \| PowerRating)	98	59.81	– 0.66	3,162,000
size=2>MTR Gaming Group	size=2> ( MNTG \| Quote \| Chart \| News \| PowerRating)	96	16.35	– 0.20	605,100
size=2>Nvidia Corp.	size=2> ( NVDA \| Quote \| Chart \| News \| PowerRating)	95	64.13	– 1.61	9,036,400
size=2>Panera Bread Co.	size=2> ( PNRA \| Quote \| Chart \| News \| PowerRating)	97	61.37	– 1.13	285,500
size=2>PEC Solutions	size=2> ( PECS \| Quote \| Chart \| News \| PowerRating)	86	25.00	– 1.35	704,400

Stocks Forming a Handle

Integra Lifesciences
(
IART |
Quote |
Chart |
News |
PowerRating) up 2.83% on
above-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
size=2>Integra Lifesciences	size=2> ( IART \| Quote \| Chart \| News \| PowerRating)	89	31.89	+ 0.88	332,800

Stocks Building A Base

size=2>Multimedia Games Inc.
(
MGAM |
Quote |
Chart |
News |
PowerRating), up 10.75% on above average
volume. The stock has impressively launched itself out of the right side of a
base that just barely qualifies for the 7 week minimum.

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
size=2>Multimedia Games Inc.	size=2> ( MGAM \| Quote \| Chart \| News \| PowerRating)	size=2>99	42.75	+ 4.15	192,300

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

Monday’s Stock Watch

BUY THE FEAR, SELL THE GREED

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