Some Stocks That Refuse To Buckle…
Oversold conditions
as well as a positive divergence finally halted the market’s slide.
Here is what I wrote on Monday:
“The big key is simple. If the Nasdaq breaks and the other major indices
cannot get back above the levels they broke down from, then all the support
that has held up the market for the past 14-plus weeks, will then become
resistance…meaning 8200 Dow, 870 S&P and Nasdaq 1320-27 become an area that
the market will have a tough time penetrating on the upside…at least in the
short term…and possibly in the intermediate-term.”
Very simply, the Nasdaq did not confirm the S&P and Dow’s breaking of support.
Look at this chart and notice how it held the 1320 support to the penny.
Now what? I am not expecting much. First off, the major indices are now in an
area of congestion that could be tough to get through. Secondly, I see this
rally/bounce as nothing more than a working off of near-term oversold
conditions. Markets can’t go straight down forever and the markets were heading
straight down over an eight-day period. Third, sentiment remains worrisome for the
bullish crowd. On the first bounce day, put/call figures went from over 1.0 down
to .62…meaning complacency continues to show up on any rally. These are not the
makings of a market that can go too far.
But I did not want to leave you with only negatives today. One of my main
technical tools is knowing that it is easiest to isolate strength when the
market is at its weakest. The following are a bunch of charts where the stocks
refuse to buckle under very bad conditions. You may want to keep these names on
a watchlist, as they could lead if the market decides to ever have a good leg up.
