Wednesday’s Stock Watch
The major indexes are off
to a good start for the week with the Naz and S&P 500 hitting new three-month
highs. On Tuesday both Nasdaq and NYSE volume accounted for
accumulation days. All three major averages are trading above their major moving
averages.
We’re seeing continued leadership from technology
issues such as semiconductors and Internet stocks, and now have the
broker/dealers testing resistance at their weekly trend lines.
Earnings season has so far been a hit. Most reports
have been beating or meeting expectations, and are followed by buying.
From our watch lists, we have a new breakout with
CTX. Stocks on our “breakouts” list continue to show strength, and we have added
a new selection to the “handles” list.
From Tuesday’s action:
Market breadth was positive, with NYSE advancing issues over declining
issues by a ratio of 2.79, and up volume over down volume by a 5.55 ratio. Nasdaq advancing issues over declining issues came in at
2.07, and up volume
beat down volume by a 4.02 ratio.
Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating)
closed +1.87%
at 8,484.99. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed
+2.17%
at 911.37.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed
+1.89%
at 1,451.36.
2,319
2,079
Declining Issues
813
1,030
1,356,810,000
1,223,387,000
Declining Volume
240,989,000
322,550,000
Total
Volume
1,605,566,000
1,567,718,000
Highs
64
30
2
2
Strongest Sectors:
Internet (content), Medical (generic), Telecom (fiber optics), Media
{cable/satellite), Computer (data storage), Internet (service providers).
Watch List Action:
Breaking out Tuesday we have Centex Corp.
(
CTX |
Quote |
Chart |
News |
PowerRating) as it cruised through its
pivot buy of 59.80 on volume 90% better than its daily average. The stock is
already showing strength as it closed at the top of its daily range, though
handle-wise we prefer to see a slope down as an indication of weak hands being
drawn out.
New to our handles list is Endo Pharmaceuticals
(
ENDP |
Quote |
Chart |
News |
PowerRating). The stock meets all
of our top fundamental requirements, and is in the strong performing drugs
sector. Technically the stock is coming out of a year long base, which is not
exemplary of the ideal IT candidate, though were going to see what this one can
do.
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 |
Apollo Group | ( APOL | Quote | Chart | News | PowerRating) | 91 | 53.70 | +0.73 | 1,940,400 | 46.89 | 54.01 |
Coach Inc. | ( COH | Quote | Chart | News | PowerRating) | 94 | 42.54 | +4.04 | 1,154,900 | 28.35 | 39.99 |
Expeditors International of Washington | ( EXPD | Quote | Chart | News | PowerRating) | 83 | 35.56 | +0.07 | 1,034,900 | 34.54 | 38.00 |
Garmin Ltd. | ( GRMN | Quote | Chart | News | PowerRating) | 96 | 39.41 | +0.96 | 517,400 | 23.46 | 39.46 |
International Game Technology | ( IGT | Quote | Chart | News | PowerRating) | 86 | 84.38 | +2.77 | 1,307,900 | 74.84 | 87.20 |
UCBH Holdings | ( UCBH | Quote | Chart | News | PowerRating) | 83 | 24.04 | -0.29 | 155,600 | 22.60 | 24.70 |
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 |
Boston Scientific | ( BSX | Quote | Chart | News | PowerRating) | 88 | 42.21 | +0.53 | 2,469,600 | 47.65 |
Chicos FAS | ( CHS | Quote | Chart | News | PowerRating) | 87 | 22.56 | +0.96 | 1,393,700 | 23.05 |
Career Education Corp. | ( CECO | Quote | Chart | News | PowerRating) | 89 | 52.71 | +0.55 | 816,700 | 54.40 |
Corinthian Colleges | ( COCO | Quote | Chart | News | PowerRating) | 87 | 40.11 | +0.23 | 1,023,500 | 42.61 |
Centex Corp. | ( CTX | Quote | Chart | News | PowerRating) | 81 | 61.42 | +2.12 | 1,291,000 | 59.80 |
Hovnanian | ( HOV | Quote | Chart | News | PowerRating) | 85 | 39.89 | +1.14 | 487,800 | 40.29 |
New Century Financial | ( NCEN | Quote | Chart | News | PowerRating) | 93 | 36.80 | +0.56 | 486,100 | 34.90 |
CTX and NCEN will move up to the “breakout” list.
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 |
If you are new to the “IT” strategy, be sure to
take a look at our
intermediate-term online trading course.
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).