Wednesday’s Stock Watch

• January 28, 2003
• TradingMarkets Editors

The major averages mustered
a rally on Tuesday in a show of optimism ahead of President Bush’s State of the
Union address. Volume has been on the light side for the first part
of the week, indicating a lack of conviction for either the long or short side.
There is much speculation that in order for institutional money to be committed,
we need either 1) The matter in Iraq to be resolved convincingly through force,
or 2) Saddam to go into exile. It be a some time until we have a relatively
peaceful geopolitical landscape, so in the meantime, we’re looking for a
technical rally.

Stocks on our watch list have put in mixed
performances since our last report. We are removing one selection, while the
search for new issues goes on with no avail.

From Tuesday’s action:

Market breadth was positive, with NYSE
advancing issues over declining issues by a ratio of 1.77, and up volume over
down volume by a 2.87 ratio. Nasdaq advancing issues over declining issues came
in at 1.67, and up volume beat down volume by a 3.53 ratio.

The Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating)
closed +1.24%
at 8,089.05. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
closed +1.30% at
858.55. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed +1.28% at
1,342.31.

Top sectors:

Fiber Optics, Gold and Silver, Internet, and
Computer Security.

Watch List Action:

Putting in an accumulation day Tuesday, International Gaming Technology
(
IGT |
Quote |
Chart |
News |
PowerRating)
continues to consolidate near its 52-week high. Though buyer beware, this
remains an unfriendly environment for intermediate-term plays, so watch out for
a breakdown.

Notching another distribution day Monday, Hovnanian Enterprises
(
HOV |
Quote |
Chart |
News |
PowerRating) is
now trading below its 200-day moving average, and is below its pivot buy point.
The stock appears to be, at best, forming a new base, though with an RS of 66, it
looks like we’ll be taking this one off the list.

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.

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
Coach Inc.	( COH | Quote | Chart | News | PowerRating)	87	31.72	-0.38	872,300	28.35	35.70
Garmin Ltd.	( GRMN | Quote | Chart | News | PowerRating)	94	28.67	-0.22	404,400	23.46	31.35
Hovnanian Enterprises	( HOV | Quote | Chart | News | PowerRating)	66	30.74	-1.31	597,000	33.56	40.56
International Game Technology	( IGT | Quote | Chart | News | PowerRating)	87	78.10	unch	869,800	66.70	80.10

Hovnanian will be coming off the list.

Stocks Forming a Handle

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
Expedia	( EXPE | Quote | Chart | News | PowerRating)	69	64.08	+0.32	2,432,900	78.72
Apollo Group	( APOL | Quote | Chart | News | PowerRating)	78	41.97	+0.72	2,258,700	46.57

Stocks Building A Base

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
None

href=”mailto:danielb@tradingmarkets.com”>danielb@tradingmarkets.com

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Intermediate-Term Traders
Report is posted on
Tuesdays and Fridays. For other intermediate-term commentary, be sure to read

Mark Boucher (Fridays),

Tim Truebenbach (Tuesdays and Thursdays), and

Gary Kaltbaum (Mondays and Thursdays).