Monday’s Stock Watch
The broader
markets spent
the beginning of the day trading in a narrow range until Fed Chairman
Alan Greenspan’s comments put the indexes in a nose dive. Overall volume on the
session came in below average, well short of Wednesday’s distribution. The
number of new 52-week highs tapered off to about half of what it has been averaging
for the last few weeks. Healthcare and biotechnology stocks represented the
strength of the day, while oil service, airline, retail, and technology stocks
were the weakness. Stocks on our watch lists were mixed, with some significant
distribution taking place.
Market breadth was neutral, with
NYSE declining issues over advancing issues by a ratio of 1.02, and down
volume over up volume by a 1.27 ratio. Nasdaq advancing issues over declining
issues came in at 1.003, and down volume beat up volume by a 1.02 ratio.
The Dow Jones Industrial Average
(
$INDU |
Quote |
Chart |
News |
PowerRating) closed down
0.80% to
9,987.53. The S&P 500
(
$SPX |
Quote |
Chart |
News |
PowerRating)
closed down
0.90% to
1,146.11.
The Nasdaq [$COMPQ |$COMPQ] closed down
1.20% to
2,022.48.
Issues
Issues
Volume
349,410,000
421,491,000
818,379,000
1,153,868,000
Volume
1,191,695,000
1,616,219,000
Highs
Lows
Highs for Week
Lows for Week
Weekly Perspective:
The indexes finished the week in negative territory, with the Dow
falling 272.21 points for a 2.6% loss, the S&P 500 fell 26.91 points for a 2.2%
loss, and the Nasdaq fell 36.92 points for a 1.7% loss. As the Dow and the S&P
have trended down since breaking their 200-day moving averages last week, the
Nasdaq remains above this mark, in what will turn into either a handle or
a double top formation. Wednesday’s distribution on the indexes, combined with
the VIX coming off its four month low, and the Investor’s Intelligence Advisor
Sentiment indicating bearishness, does not bode well for the near term. Having
said that, it is always best to take the market action for what it is, and not what it
should do. A breakout on the Nasdaq from this level is not out of the question.
Stocks on our watch list experienced some heavy selling this week,
with THQI coming off our “breakout” list as it has fallen well below its pivot
buy point. Other stocks on our watch list, including NVDA, AMHC, and EBAY, have
all broken their upward trend line, as PECS and KKD are currently challenging
this zone. Integra LifeSciences
(
IART |
Quote |
Chart |
News |
PowerRating) attempted to break out today,
shooting
up 5 cents over its 8/27 high, only to close down 6.36% for a distribution
day. With earnings season coming into full swing, we hope to be adding new
candidates to our list soon.
Top sectors with new highs for the week included business
services, Internet, medical, restaurants, and trucking.
Top sectors:
Morgan Stanley
Healthcare Payor Index
(
$HMO.X |
Quote |
Chart |
News |
PowerRating) up 1.87% at 462.23.
Eurotop 100 Index
(
$XAU.X |
Quote |
Chart |
News |
PowerRating) up
0.82% at 2814.15.
Losing sectors:
Oil Service Sector Index
(
$OSX.X |
Quote |
Chart |
News |
PowerRating) down
3.90% at 78.42.
Airline Index
(
$XAL.X |
Quote |
Chart |
News |
PowerRating) down
2.86% to 91.82.
Sectors With New
Highs:
Business Services – 6
Internet – 3
Regional Banks – 4
REITs – 3
Resorts and Casinos – 3
Restaurants – 5
Semiconductors – 3
Watch List Action
Krispy Kreme
(
KKD |
Quote |
Chart |
News |
PowerRating), fell 0.14% to 42.05 on low volume. The stock is
challenging its downward trend line.
Direct Focus Inc.
(
DFXI |
Quote |
Chart |
News |
PowerRating), rose 0.05% on below-average volume. The stock
is consolidating after its recent breakout. This report marked the stock as a
breakout on 1/08, as it charged through its upward trend line on heavy volume.
According to William O’Neil, this is a viable entry point, though an equally
acceptable pivot buy point was created the next day at 10 cents over the high of
the handle at 33.34. Watching every hour of the market isn’t for everyone, but
being at the right place at the right time has its rewards.
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.
American Healthways Inc.
(
AMHC |
Quote |
Chart |
News |
PowerRating), up 2.43% on
below-average volume.
Copart Inc.
(
CPRT |
Quote |
Chart |
News |
PowerRating), up 0.75% on average
volume.
Ebay
(
EBAY |
Quote |
Chart |
News |
PowerRating), down 3.21% on average volume for an
accumulation day.
Genesis Microchip
(
GNSS |
Quote |
Chart |
News |
PowerRating), up 1.18% on below-average volume.
MTR Gaming Group
(
MNTG |
Quote |
Chart |
News |
PowerRating), down 4.88% on average
volume for a distribution day.
Nvidia Corp.
(
NVDA |
Quote |
Chart |
News |
PowerRating), down 4.42% on above-average
volume for a distribution day.
Panera Bread Co.
(
PNRA |
Quote |
Chart |
News |
PowerRating), up 1.33% on above-average volume for an accumulation day.
PEC Solutions
(
PECS |
Quote |
Chart |
News |
PowerRating), down 3.84% on average volume.
THQ Inc.
(
THQI |
Quote |
Chart |
News |
PowerRating), down 4.55% on high average
volume for a distribution day. This stock is has now been removed from our
list for falling well below its pivot buy point.
| 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) | size=2>96 | 28.62 | + 0.31 | 318,900 |
| size=2>Copart Inc. | size=2> ( CPRT | Quote | Chart | News | PowerRating) | 77 | 33.17 | + 0.25 | 738,800 |
| size=2>Direct Focus Inc. | size=2> ( DFXI | Quote | Chart | News | PowerRating) | 94 | 35.57 | + 0.02 | 812,400 |
| size=2>Ebay | size=2> ( EBAY | Quote | Chart | News | PowerRating) | 83 | 63.87 | – 2.12 | 6,366,500 |
| size=2>Genesis Microchip | size=2> ( GNSS | Quote | Chart | News | PowerRating) | size=2>99 | 72.39 | + 0.85 | 2,548,800 |
| size=2>Krispy Kreme Doughnuts | size=2> ( KKD | Quote | Chart | News | PowerRating) | 92 | 42.05 | – 0.06 | 938,700 |
| size=2>MTR Gaming Group | size=2> ( MNTG | Quote | Chart | News | PowerRating) | 97 | 15.74 | – 0.81 | 510,400 |
| size=2>Nvidia Corp. | size=2> ( NVDA | Quote | Chart | News | PowerRating) | 96 | 63.07 | – 2.92 | 9,398,100 |
| size=2>Panera Bread Co. | size=2> ( PNRA | Quote | Chart | News | PowerRating) | 95 | 56.20 | + 0.74 | 274,400 |
| size=2>PEC Solutions | size=2> ( PECS | Quote | Chart | News | PowerRating) | 98 | 35.00 | – 1.40 | 684,200 |
Stocks Forming a Handle
Integra Lifesciences
(
IART |
Quote |
Chart |
News |
PowerRating) down 6.36% on
almost five times average 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 |
| size=2>Integra Lifesciences | size=2> ( IART | Quote | Chart | News | PowerRating) | size=2>86 | 30.01 | + 0.56 | size=2>297,700 |
Stocks Building A Base
Multimedia Games Inc.
(
MGAM |
Quote |
Chart |
News |
PowerRating), down 1.85% 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 |
| size=2>Multimedia Games Inc. | size=2> ( MGAM | Quote | Chart | News | PowerRating) | size=2>99 | 37.15 | – 1.74 | size=2>187,400 |
href=”mailto:danielb@tradingmarkets.com”>danielb@tradingmarkets.com