Wednesday’s Stock Watch
The major indexes have been
pulling back for the past two days, though volume has been on the
light side, indicating less conviction for the move. At this stage in the game,
volume is key to watch, as it will hint what the institutions are up to. From
the bullish perspective, we want to see the downside volume dry up to give way to
the bulls. But as always, we will trade what is, and not what should be.
Breadth-wise, things appear to have turned up some. Mark Boucher‘s
Top
RS and ER List posted 46 for Monday, with the
Bottom RS and ER List producing nothing. New 52-week highs continue to hold
a slight edge over the lows.
Stocks on our watch list are hanging in there,
though our most recent breakout, Garmin Ltd.
(
GRMN |
Quote |
Chart |
News |
PowerRating), ran into some heavy selling Tuesday. It
is important for us to see breakouts succeed in this market until we can really
feel confident about buying into it. Unfortunately, there have been no new
selections to add to our watch lists.
From Tuesday’s action:
Market breadth was negative, with NYSE
declining issues over advancing issues by a ratio of 1.59, and down volume over
up volume by a 3.50 ratio. Nasdaq declining issues over advancing issues came in
at 2.11, and down volume beat up volume by a 5.08 ratio.
Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating)
closed -1.34%
at 8,742.93. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
closed -1.47% at
920.75.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed
-2.41%% at
1,448.96.
1,145
1,081
Declining Issues
1,923
2,250
319,782,000
281,008,000
1,083,919,000
1,338,506,000
Total
Volume
1,414,850,000
1,633,970,000
Highs
7
12
5
3
Top sectors:
Gold, Defense, Leisure, Consumer.
Watch List Action:
One of our recent breakouts, Mentor Corp.
(
MNTR |
Quote |
Chart |
News |
PowerRating), was able to buck the
overall market trend with a slight gain for Tuesday. The stock is holding above
its pivot buy, though posted distribution on Monday. We’d rather see up days
occur on higher volume, though we’ll see how this one hangs in here.
Our newest breakout, Garmin Ltd.
(
GRMN |
Quote |
Chart |
News |
PowerRating), gave up a big chunk of gains for
Tuesday as it made an ominous inside day on the daily chart. The stock has been
on a tear lately, and has provided little in the way of entry opportunities.
We’re watching to see how this one holds above its most recent consolidation.
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) | 84 | 40.50 | -0.80 | 2,555,100 | 39.60 | 46.15 |
Coach Inc. | ( COH | Quote | Chart | News | PowerRating) | 96 | 33.91 | -0.56 | 936,500 | 29.80 | 34.56 |
Garmin Ltd. | ( GRMN | Quote | Chart | News | PowerRating) | 91 | 24.65 | -0.85 | 183,600 | 23.46 | 24.25 |
Hovnanian Enterprises | ( HOV | Quote | Chart | News | PowerRating) | 93 | 31.40 | -1.58 | 771,100 | 33.56 | 40.56 |
International Game Technology | ( IGT | Quote | Chart | News | PowerRating) | 88 | 75.59 | -1.10 | 1,099,000 | 75.47 | 79.51 |
Mentor Corp. | ( MNTR | Quote | Chart | News | PowerRating) | 92 | 42.93 | +0.36 | 255,900 | 41.50 | 45.01 |
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 |
Commerce Bancorp. | ( CBH | Quote | Chart | News | PowerRating) | 75 | 45.44 | -0.84 | 748,700 | 47.90 |
Expedia | ( EXPE | Quote | Chart | News | PowerRating) | 96 | 74.37 | +0.85 | 2,671,400 | 78.72 |
Ross Stores Inc. | ( ROST | Quote | Chart | News | PowerRating) | 93 | 45.61 | -0.56 | 1,075,200 | 47.34 |
EXPE hit its pivot though didn’t produce the
volume needed for a buy signal.
We have reset the pivot on ROST to 47.34.
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
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).