Tuesday’s Stock Watch
The markets
headed south today on the heels of disappointing earnings announcements from key
technology companies. Average volume on the session sent the Nasdaq below its
50-day moving average for the first time since October. Stocks on our watch
lists were mixed, with one of our best performers revisiting its pivot buy
point.
Market breadth was negative, with
NYSE declining issues over advancing issues by a ratio of 1.52, and down volume
over up volume by a 1.71 ratio. Nasdaq declining issues over advancing issues
came in at 1.89, and down volume beat up volume by a 5.69 ratio.
The Dow Jones Industrial Average
(
$INDU |
Quote |
Chart |
News |
PowerRating) closed down
0.79% to
9,771.85. The S&P 500
(
$SPX |
Quote |
Chart |
News |
PowerRating)
closed down
0.96% to
1,127.98.
The Nasdaq [$COMPQ |$COMPQ] closed down
2.78% to
1,930.34.
Issues
474,276,000
242,112,000
813,835,000
1,378,098,000
Volume
1,317,202,000
1,670,986,000
Highs
Highs for Week
Week
Weekly Perspective :
The markets closed down for the second
week in a row with earnings disappointments as the culprit. The Dow finished the
week down 215.68 points for a 2.15% loss, the S&P 500 closed down 18.02 points for a
1.57% loss, and the Nasdaq closed down 92.12 points for a 4.55% loss. All three
indexes are now below their 50-day moving averages.
The heaviest selling has been in the
Nasdaq as it notched in three distribution days and one accumulation day the past two
weeks. The index is now 39% from its September low, and traders are wondering if
we are simply taking a breather before heading higher, or beginning a new leg
down. The driving force behind stocks is earnings, and so far the markets have
had a negative reaction to announcements from key technology companies IBM,
Microsoft, and Intel, indicating a near-term correction is on order. Stocks that
react negatively to better than expected earnings are sending a clear message.
However, earnings season is far from over, and as Mark Boucher points out, in a
news sensitive environment, we could easily rebound with encouraging data next
week.
Sectors with high concentrations of
new 52-week highs for the week were business services, REITs, healthcare, and
restaurants.
Top sectors:
Airline Index
(
$XAL.X |
Quote |
Chart |
News |
PowerRating)
up 1.41% to 91.49.
Morgan Stanley Healthcare Index
(
$HMO.X |
Quote |
Chart |
News |
PowerRating)
up 1.34% to 471.02.
Losing sectors:
Disk Drive Index
(
$DDX.X |
Quote |
Chart |
News |
PowerRating)
down 5.94% to 101.48.
Computer Technology Index
(
$XCI.X |
Quote |
Chart |
News |
PowerRating) down
3.73% to 784.67.
Sectors With New
Highs:
Business Services – 3
Gaming – 3
Regional Banks – 3
REITs – 5
Resorts and Casinos – 3
Restaurants – 3
Watch List Action
Direct Focus Inc.
(
DFXI |
Quote |
Chart |
News |
PowerRating) fell another 0.54% today on average volume. The
stock is still trading near its pivot buy point of 33.34, and has experienced
three distribution days vs. two accumulation days in past two weeks.
Genesis Microchip
(
GNSS |
Quote |
Chart |
News |
PowerRating) had a huge volume spike today after posting
disappointing earnings. The stock closed down 2.97% on over three times average
volume for a distribution day. With the exceptional volume, it’s a good sign to
see the stock did not sell off any worse–there seems to be a good deal of
buying interest here.
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.
American Healthways Inc.
(
AMHC |
Quote |
Chart |
News |
PowerRating), up 0.16% on
below-average volume.
Copart Inc.
(
CPRT |
Quote |
Chart |
News |
PowerRating), down 0.88% on below-average
volume. The stock will split 3 for 2 on Tuesday, January 2nd.
size=2>Ebay
(
EBAY |
Quote |
Chart |
News |
PowerRating), down 2.32% on average volume.
MTR Gaming Group
(
MNTG |
Quote |
Chart |
News |
PowerRating), up 3.83% on below-average
volume for an accumulation day.
Nvidia Corp.
(
NVDA |
Quote |
Chart |
News |
PowerRating), down 1.83% on below-average
volume.
Panera Bread Co.
(
PNRA |
Quote |
Chart |
News |
PowerRating), up 0.54% on above-average volume
for an accumulation day.
PEC Solutions
(
PECS |
Quote |
Chart |
News |
PowerRating), down 3.71% on average
volume. The stock has retraced to its pivot buy point.
| 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>American Healthways Inc. | size=2> ( AMHC | Quote | Chart | News | PowerRating) | 98 | 30.03 | + 0.05 | 310,200 |
| size=2>Copart Inc. | size=2> ( CPRT | Quote | Chart | News | PowerRating) | 82 | 32.65 | – 0.29 | 768,400 |
| size=2>Direct Focus Inc. | size=2> ( DFXI | Quote | Chart | News | PowerRating) | 88 | 32.80 | – 0.15 | 835,200 |
| size=2>Ebay | size=2> ( EBAY | Quote | Chart | News | PowerRating) | 72 | 60.18 | – 1.43 | 6,479,300 |
| size=2>Genesis Microchip | size=2> ( GNSS | Quote | Chart | News | PowerRating) | size=2>99 | 66.18 | – 2.03 | 2,593,200 |
| size=2>MTR Gaming Group | size=2> ( MNTG | Quote | Chart | News | PowerRating) | 93 | 14.90 | + 0.55 | 558,500 |
| size=2>Nvidia Corp. | size=2> ( NVDA | Quote | Chart | News | PowerRating) | 96 | 63.80 | – 1.19 | 9,395,900 |
| size=2>Panera Bread Co. | size=2> ( PNRA | Quote | Chart | News | PowerRating) | 95 | 57.08 | + 0.31 | 270,100 |
| size=2>PEC Solutions | size=2> ( PECS | Quote | Chart | News | PowerRating) | 97 | 28.74 | – 1.11 | 685,700 |
Stocks Forming a Handle
Integra Lifesciences
(
IART |
Quote |
Chart |
News |
PowerRating) down 0.52% on
below average volume for a distribution day.
| 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>Integra Lifesciences | size=2> ( IART | Quote | Chart | News | PowerRating) | 93 | 30.50 | – 0.16 | 340,100 |
Stocks Building A Base
Multimedia Games Inc.
(
MGAM |
Quote |
Chart |
News |
PowerRating), up 2.93% on 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 |
| size=2>Multimedia Games Inc. | size=2> ( MGAM | Quote | Chart | News | PowerRating) | size=2>99 | 36.18 | + 1.03 | 179,000 |
href=”mailto:danielb@tradingmarkets.com”>danielb@tradingmarkets.com