Monday’s Stock Watch

• March 1, 2002
• TradingMarkets Editors

Today’s
market action was all bull as the major indexes staged a convincing
rally from open to close.  The Dow was the star of the day as it broke out
to levels not seen since last August. Volume on the NYSE came at above average,
chalking up a follow through day from last Friday’s rally for both the Dow and
the S&P 500. The Nadaq’s volume also came in above average, though doesn’t stand
up to its last two days of distribution. The only weakness on the day was the
biotechnology sector. The stocks on our watch list fared well.

Market breadth was positive, with NYSE
advancing issues over declining issues by a ratio of 2.39, and up volume over
down volume by a 3.12 ratio. Nasdaq advancing issues over declining issues came
in at 1.86, and up volume beat down volume by a 3.78 ratio.

The Dow Jones Industrial Average
(
$INDU |
Quote |
Chart |
News |
PowerRating) closed
up
2.60% to
10,368.86. The S&P 500
(
$SPX |
Quote |
Chart |
News |
PowerRating)
closed up
2.09% to
1,129.84.
The Nasdaq [$COMPQ |$COMPQ] closed up
4.12% to
1,802.76.

 

Weekly Perspective:

The markets exhibited strength this
week as the Dow closed up 400.71 points for a 4% gain, the S&P 500 closed up
41.94 points for a 3.8% gain, and the Nasdaq broke a three week losing streak by
closing up 78.2 points for a 4.5% gain. The real story of the week was in the
Dow, as it broke out to levels not seen since last August. The S&P 500 finished
above its 50-day moving average, and the Nasdaq above its 20-day moving average.

Now that we have a follow through day
on the Dow and S&P 500, what now? We watched the NYSE ring in  new 52-week
highs all week, with every day hitting over 50, while the market breadth of the
Nasdaq flashed bearish with two days of distribution. From looking at the
charts, we see the Dow breaking out of a cup-with-handle pattern, and the Nasdaq
in a downward channel. It’s been a tug of war between the NYSE and Nasdaq, and
it may be some time until its over. The stocks on our watch lists continue to
drop off, though two new break outs this week may give us signs of hope for this
market. We will continue to monitor all new break outs, and keep an eye on Mark
Boucher’s
Top
RS and ER Highs for indications of strength and weakness. Consumer and
cyclical stocks have provided recent leadership, with technology continuing to
sell off.

(Note – Due to an issue with data, I
have not been able to update information on new 52-week high consolidations.
This should change soon, thanks for your patience.)

Top sectors:

Semiconductor Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) up
11.04% at 567.26.

GSTI Internet Index
(
$GSM.X |
Quote |
Chart |
News |
PowerRating) up
9.84% at 272.09.

Losing sector:

Biotechnology
Index
(
$BTK.X |
Quote |
Chart |
News |
PowerRating) down 0.43% at
477.09.

Watch List Action:

Multimedia Games
(
MGAM |
Quote |
Chart |
News |
PowerRating) followed up on its breakout with a loss of 1.67%
average volume. At its low today, the stock erased all of yesterday’s gains, but
managed to close in the upper portion of its range. 

Group 1
Automotive
(
GPI |
Quote |
Chart |
News |
PowerRating) closed up 1.25% on average volume. The stock has slowed for
the first time since breaking out Monday.

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.

Group 1 Automotive
(
GPI |
Quote |
Chart |
News |
PowerRating), up 1.25% on average volume.

size=2>Multimedia Games Inc.
(
MGAM |
Quote |
Chart |
News |
PowerRating), down 1.67% average volume.

size=2>Nvidia Corp.
(
NVDA |
Quote |
Chart |
News |
PowerRating), up 9.66% on average volume.

size=2>Panera Bread Co
(
PNRA |
Quote |
Chart |
News |
PowerRating), up 4.20%
on below-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	Pivot	52-Week High
Group 1 Automotive	( GPI | Quote | Chart | News | PowerRating)	95	38.00	+ 0.47	319,800	33.14	34.99
size=2>Multimedia Games Inc.	size=2> ( MGAM | Quote | Chart | News | PowerRating)	size=2>99	31.04	– 0.53	347,000	30.91	32.51
size=2>Nvidia Corp.	size=2> ( NVDA | Quote | Chart | News | PowerRating)	84	55.94	+ 4.93	10,563,000	52.67	72.66
size=2>Panera Bread Co.	size=2> ( PNRA | Quote | Chart | News | PowerRating)	89	53.81	+ 2.17	402,800	14.55	64.94

Stocks Forming a Handle

DRS Technologies
(
DRS |
Quote |
Chart |
News |
PowerRating), unchanged on below
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	Pivot
DRS Technologies	( DRS | Quote | Chart | News | PowerRating)	94	40.00	+ 0.00	218,100	43.20

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	Â	Â	Â	Â	Â

 

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