Monday’s Stock Watch
The broader
markets managed
slight gains on the day, ending the year’s lowest week of volume.
With many traders absent, much of the speculation has been for next year’s
economy and whether or not we will begin to see earnings recover. Earnings
being a key factor for the stock selection of this report, we hope to see more
candidates meet our screening criteria in the new year. Stocks on our watch list
were mixed today, with low volume again taking away from conviction.
Market breadth was positive and
similar to the last couple of days, with
NYSE advancing issues over declining issues by a ratio of 1.75, and up volume
over down volume by a 2 to 1 margin. Nasdaq advancing issues over declining
issues came in at 1.32, and up volume beat down volume by over a 1.8 ratio.
The Dow Jones Industrial Average
(
$INDU |
Quote |
Chart |
News |
PowerRating) closed up
0.06% to
10,136.99. The S&P 500
(
$SPX |
Quote |
Chart |
News |
PowerRating)
closed up
0.32% to
1,160.8.
The Nasdaq [$COMPQ |$COMPQ] closed up
0.55% to
1,987.24.
| NYSE | NASDAQ | |
| Advancing Issues | 2,000 |
2,124 |
| Declining Issues | 1,139 |
1,603 |
| Advancing Volume |
601,762,000 |
816,212,000 |
| Declining Volume |
265,186,000 |
448,658,000 |
| Total Volume | 880,444,000 |
1,319,315,000 |
| New 52-week Highs | 28 | 18 |
| New 52-week Lows | 0 | 1 |
| New 52-week Highs for Week |
131 | 80 |
| New 52-week Lows for Week |
3 | 2 |
Weekly Perspective:
This past week was in the spirit of
the holidays as all three major indexes gave us the gift of an increase. The Dow
finished up 101.65 points for a 1% gain, the S&P 500 rose 16.13 points for a
1.4% gain, and the Nasdaq tacked on 41.43 points for a 2% increase.
With volume so low, we are careful
not to look too closely into the price action, as many traders were away with
their votes. The Dow has closed above its 200-day MA for the first time since
July, while the S&P closed off this mark, and the Nasdaq remains in a channel
above the mark. We have seen a nice rally this fall, and the markets are now
taking things in stride as the financial community ponders the next year.
Those of you who read Kevin
Haggerty’s column are aware that Nvidia Corporation
(
NVDA |
Quote |
Chart |
News |
PowerRating) and Genesis
Microchip
(
GNSS |
Quote |
Chart |
News |
PowerRating) were prime suspects for “window dressing” (when funds buy into the top
performers of the year for the right to publish them as holdings in their annual
reports). There’s one more day of trading left in the year, and we can
take the decorative buying as a compliment. Our stocks are picked to be the
cream of the crop, and this fall has produced some decent selections, though we
still remain cautious of the environment. Technology has led us this far, and we
will continue to watch for further indications of firming via high-quality
stocks setting up and heavy upside buying.
Sectors with high concentrations of
new 52-week highs for the week were business services, medical, REITs and
trucking.
Top sectors:
TheStreet.com Internet Index
(
$DOT.X |
Quote |
Chart |
News |
PowerRating), up 2.62% at 195.14.
GSTI Software Index
(
$GSO.X |
Quote |
Chart |
News |
PowerRating), up
3.77% at 179.32.
Losing sectors:
Morgan Stanley Consumer Index
(
CMR.X |
Quote |
Chart |
News |
PowerRating),
down 0.32% to 568.96.
Disk Drive Index
(
DDX.X |
Quote |
Chart |
News |
PowerRating),
down 0.26% to 107.10.
Sectors With New Highs:
Business Services — 5
Gaming — 4
Internet — 3
Medical — 6
REITs — 6
Residential Construction — 5
Restaurants — 4
Semiconductors — 4
Trucking — 3
Watch List Action
Krispy Kreme
(
KKD |
Quote |
Chart |
News |
PowerRating) gained another 0.19% today on above-average volume
for an accumulation day. Just six trading days from its breakout, this doughnut
retailer has made a nice run out of its base, which stands over five months long.
Typically, the longer the base, the bigger the future gains, though this one is
also facing ridicule for having one of the biggest price-to-earnings ratios. As
IT traders, we don’t discriminate P/E levels and place our trust in earnings
fundamentals and technical criteria. This market has long been suspect for being
suitable for our breakout candidates, and we will continue to watch and wait to
see if this stock will lead us.
One of our biggest gainers of the day was eBay
(
EBAY |
Quote |
Chart |
News |
PowerRating), up 2.75% on low
volume for an accumulation day. This stock was trading dangerously close to its
breakout point a few days ago, though now appears to be advancing from its trendline with a couple of accumulation days notched in.
Recent Breakouts
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), down 1.48% on average volume.
Copart Inc.
(
CPRT |
Quote |
Chart |
News |
PowerRating), down 2.77% on
average volume for a distribution day.
Genesis Microchip
(
GNSS |
Quote |
Chart |
News |
PowerRating), down 2.12% on
below average volume.
MTR Gaming Group
(
MNTG |
Quote |
Chart |
News |
PowerRating), down 1.28% on
average
volume.
Nvidia Corp.
(
NVDA |
Quote |
Chart |
News |
PowerRating), down 2.40% on below
average volume.
Panera Bread Co.
(
PNRA |
Quote |
Chart |
News |
PowerRating), up 1.22% on
low volume for an accumulation day.
PEC Solutions
(
PECS |
Quote |
Chart |
News |
PowerRating), up 0.88% on average volume.
THQ Inc.
(
THQI |
Quote |
Chart |
News |
PowerRating), down 2.55% on average volume for
its second distribution day in a row.
Company Name |
Symbol |
12 Month RS |
Price |
Price Change |
Average Volume |
| American Healthways Inc. | ( AMHC | Quote | Chart | News | PowerRating) |
98 | 32.50 | – 0.49 | 277,300 |
| Copart Inc. | ( CPRT | Quote | Chart | News | PowerRating) |
93 | 37.16 | – 1.06 | 694,300 |
| eBay | ( EBAY | Quote | Chart | News | PowerRating) |
89 | 67.98 | + 1.81 | 8,470,900 |
| Genesis Microchip | ( GNSS | Quote | Chart | News | PowerRating) |
99 | 67.10 | – 1.46 | 2,712,200 |
| Krispy Kreme Doughnuts | ( KKD | Quote | Chart | News | PowerRating) |
95 | 45.75 | + 0.09 | 875,900 |
| MTR Gaming Group | ( MNTG | Quote | Chart | News | PowerRating) |
97 | 16.08 | – 0.21 | 473,800 |
| Nvidia Corp. | ( NVDA | Quote | Chart | News | PowerRating) |
97 | 67.71 | – 1.67 | 5,565,200 |
| Panera Bread Co. | ( PNRA | Quote | Chart | News | PowerRating) |
95 | 53.85 | + 0.65 | 274,100 |
| PEC Solutions | ( PECS | Quote | Chart | News | PowerRating) |
99 | 37.50 | + 0.33 | 597,400 |
| THQ Inc. | ( THQI | Quote | Chart | News | PowerRating) |
89 | 49.89 | – 1.31 | 647,600 |
Stocks Forming a Handle
Career Education Corp.
(
CECO |
Quote |
Chart |
News |
PowerRating), down 2.42% on
low volume.
Direct Focus Inc.
(
DFXI |
Quote |
Chart |
News |
PowerRating), up 1.10% on
below average volume.
Integra Lifesciences
(
IART |
Quote |
Chart |
News |
PowerRating) up 1.73% on low
volume.
Company Name |
Symbol |
12 Month RS |
Price |
Price Change |
Average Volume |
| Career Education Corp. | ( CECO | Quote | Chart | News | PowerRating) |
89 | 35.81 | – 0.29 | 768,600 |
| Direct Focus Inc. | ( DFXI | Quote | Chart | News | PowerRating) |
93 | 30.85 | + 1.34 | 684,600 |
| Integra Lifesciences | ( IART | Quote | Chart | News | PowerRating) |
90 | 26.35 | – 1.35 | 309,100 |
Stocks Building A Base
Company Name |
Symbol |
12 Month RS |
Price |
Price Change |
Average Volume |
| None |