Tuesday’s Stock Watch
The trend was down today, as the three major indexes closed
poorly. Average volume on the NYSE indicated distribution, and
Nasdaq action clearly bearish with down volume over up volume by a 4 to 1 weekly
ratio. Pharmaceutical, oil, and airline stocks led the action in the plus
column, with networking, broker/dealer, and Internet stocks getting slammed.
Stocks on our watch list were mixed, with one from our “breakout” list
experiencing heavy distribution.
Market breadth was negative, though NYSE
advancing issues led declining issues by a ratio of 1.0031, and down volume led
up volume by a 1.89 ratio. Nasdaq declining issues over advancing issues came in
at 1.44, and down volume beat up volume by a 4.14 ratio.
The Dow Jones Industrial Average
(
$INDU |
Quote |
Chart |
News |
PowerRating) closed down
0.99%
to
9,903.04. The S&P 500
(
$SPX |
Quote |
Chart |
News |
PowerRating)
closed down
1.09% to
1,104.28.
The Nasdaq [$COMPQ |$COMPQ] closed down
2.06% to
1,805.19.
NYSE
size=2>NASDAQ
Advancing Issues
1,545
1,422
Declining
Issues
1,540
2,050
Advancing Volume
463,005,000
306,156,000
Declining Volume
874,461,000
1,267,956,000
Total
Volume
1,346,119,000
1,592,159,000
New 52-week
Highs
34
9
New 52-week Lows
11
7
Weekly Perspective:
Looking back at the week, we see that the Dow gained 158.8 points
or 1.6%, the S&P 500 gained 7.96 points or 0.07%, and the Nasdaq lost 13.68
points or 0.07%. At the close Friday, the Dow is below its 50-day MA, the S&P 500 is still well below its 50-day MA, and the Nasdaq is
well below all of its major moving averages. For the past three weeks, the NYSE
has notched in five distribution days over two accumulation days, and the Nasdaq
has made five distribution days over one accumulation day. With all three
indexes appearing to have temporarily strayed from a downtrend, we look for
recent support levels to be tested.
One of the more positive things to come out of this week was the
number of new 52-week highs on the NYSE, as it registered over 40 for three
days, with very few breakdowns. Also, Mark Boucher’s
Top
RS and ER list was bullish all week with consistent 20+ readings. Despite the
technology selling, the broader markets are flexing some bullish sentiment.
Reactions to retail sales were positive, though consumer sentiment from the
University of Michigan was slightly disappointing. With the VIX coming off the
lower end of its range, we expect to see some volatility enter the scene. Next
week will be short due to President’s day, though we will be looking to economic
data in the form of housing starts, consumer price index, and initial jobless
claims for signs of economic health.
Top sectors:
Dow Jones Equity REIT Index
(
$DJR.X |
Quote |
Chart |
News |
PowerRating) up 0.60% at 152.56,
Deutsche Bank Energy Index
(
$DXE.X |
Quote |
Chart |
News |
PowerRating) up
0.52% at 379.92.
Losing sectors:
Networking Index
(
$NWX.X |
Quote |
Chart |
News |
PowerRating) down 4.24% at 253.72.
Securities Broker Dealer Index
(
$XBD.X |
Quote |
Chart |
News |
PowerRating) down
4.05% to 476.51.
Watch List Action: Nvidia Experiencing distribution, Panera Bread Company
(
NVDA |
Quote |
Chart |
News |
PowerRating) was our big loser today, losing 7.73% on almost four times
average volume for a major distribution day. The company grabbed headlines after it was released that they are being investigated by the SEC for
accounting issues. This stock was the biggest gainer on the S&P 500 last year,
and the year before that, Enron held the title. Let’s hope that’s all the two
companies have in common. 
(
PNRA |
Quote |
Chart |
News |
PowerRating) fell 2.64%
on average volume. This stock is still trading above its 50-day moving average,
as it posted four days of distribution against two days of accumulation.
February 7th’s day of massive distribution will be a real challenge to overcome, keep an eye on the 50-day MA as a level of support. 
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.
size=2>Copart Inc.
(
CPRT |
Quote |
Chart |
News |
PowerRating), down 1.48% on half its average volume for
its second distribution day in a row. .
size=2>Genesis Microchip
(
GNSS |
Quote |
Chart |
News |
PowerRating), down 0.53% on low volume.
size=2>MTR Gaming Group
(
MNTG |
Quote |
Chart |
News |
PowerRating), down 1.46% 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 | Pivot | 52-Week High |
size=2>Copart Inc. | size=2> ( CPRT | Quote | Chart | News | PowerRating) | 90 | 22.48 | – 0.34 | 979,700 | 8.60 | 25.82 |
size=2>Genesis Microchip | size=2> ( GNSS | Quote | Chart | News | PowerRating) | 95 | 44.76 | – 0.24 | 2,286,900 | 38 | 74.90 |
size=2>MTR Gaming Group | size=2> ( MNTG | Quote | Chart | News | PowerRating) | 95 | 15.52 | – 0.23 | 560,500 | 14.30 | 17.16 |
size=2>Nvidia Corp. | size=2> ( NVDA | Quote | Chart | News | PowerRating) | 93 | 57.35 | – 4.81 | 8,562,300 | 52.67 | 72.66 |
size=2>Panera Bread Co. | size=2> ( PNRA | Quote | Chart | News | PowerRating) | 95 | 56.51 | – 1.54 | 347,700 | 14.55 | 64.94 |
Stocks Forming a Handle
American Medical Systems Holdings
(
AMMD |
Quote |
Chart |
News |
PowerRating),
down 2.10% on average volume.
DRS Technologies
(
DRS |
Quote |
Chart |
News |
PowerRating), up 0.71% 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 |
American Medical Systems Holdings | ( AMMD | Quote | Chart | News | PowerRating) | 94 | 23.69 | – 0.51 | 277,300 |
DRS Technologies | ( DRS | Quote | Chart | News | PowerRating) | 95 | 39.25 | + 0.28 | 281,300 |
Stocks Building A Base
size=2>Multimedia Games Inc.
(
MGAM |
Quote |
Chart |
News |
PowerRating), up 1.48%
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 | 27.42 | + 0.40 | 315,200 |
href=”mailto:danielb@tradingmarkets.com”>danielb@tradingmarkets.com