Status Quo

  • July 30, 2001
  • Greg Che

 

With the weekend behind us I
had a chance to refresh all my data to ensure we are not missing any
timing signals on bad data. Unfortunately, the models are status quo
and no new buy or sell signal have triggered. On a positive note and
perhaps an indicator for what to expect looking ahead for the markets,
Tony Crescenzi wrote in his Bondwire piece for Tradingmarkets:

“ECONOMY
TALK: Early this morning, several large retailers will
make available their sales figures for last week. From here on in,
market participants are likely to scrutinize that data for evidence of
the extent of impact that the tax rebates are having on the economy.
Each Monday, therefore, the performance of retailers’ shares and bonds
will likely represent a manifestation of the market’s sentiment on the
impact of the tax rebates. This will then permeate the the markets,
and could therefore have substantial impact on their near-term
direction”

I combed through the charts
looking for opportunities on the long side and came up with two viable
candidates, one of which has been mentioned in this column before.

Spectralink (SLNK)
broke out to new highs in the session. The wireless telecom equipment
company is showing very positive fundamentals, with earnings
increasing (25%, 9%,  80%, 83%) with a 5 years growth rate of
81%.

Pharmaceutical Product
Development (PPDI)
is still forming a handle of its 6 week W shaped bottom. The stock
closed strong and looks poised to test the handles high.

Among the Exchange Traded
Funds edging out some gains were the WEBS-Sweden (EWD)
which rose 3.2%.

The DJ US Large Cap Growth
Street Tracks (ELG)
moved higher 2.5%.

Also gaining was the
WEBS-Belgium (EWK)
as the fund tacked on 2.1%.

ETFs in the red were led by
the Ishares MSCI Japan Index (EWJ)
as the Nikkei made new 16 year lows. Note the Relative Strength line
made a new low before price has. This may indicate that the fund still
has some more downside potential. 

The WEBS-Korea Fund (EWY)
slid 2.2%.

Also losing in the session
was the Ishares DJ. US Internet Trust (IYV),
which fell 2.1%.

Remember that all securities
are risky. In any trade, you should always reduce your risk by
adjusting position size and placing open protective stops where
you will sell your long or cover your short in case the market turns
against you. For an introduction to combining price stops with
position sizing, see Loren’s lesson, Risky
Business.

 

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