Wednesday’s Stock Watch

• July 30, 2002
• TradingMarkets Editors

The markets continue to
point north as Monday’s action gave the Nasdaq a sign of accumulation and qualified for a follow through day.
What we’d like to see in the next couple of weeks is a further indication of support to the upside with accumualtion on the indexes. This would
show us that institutions are willing to bet on last Wednesday’s low as being a
significant one.

Still, the 20-day moving averages remains a barrier
for the major indexes, and the traditional leadership of the semiconductors is
questionable after they broke key support last week. As

Mark Boucher said on Bloomberg TV today, bear market rallies are sharp and
only last a couple of days. He was not impressed with the volume in recent
action, and is not figuring a bottom to be in place just yet.

As always, it’s a waiting game for us. We’re looking
for stocks with top fundamental and technical properties building bases, and
hope to be able to list them here in the near future.

From today’s action:

Market breadth was positive, with NYSE
advancing issues over declining issues by a ratio of 1.13, and up volume over
down volume by a 1.38 ratio. Nasdaq advancing issues over declining issues came
in at 1.07, and up volume beat down volume by a 1.94 ratio.

The Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating) closed down 0.36% at 8680.03. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
closed up 0.42% at 902.79.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed up 0.66% at 1344.17.

 

Top sectors:

Dow Jones Utilities Index
(
$UTIL.X |
Quote |
Chart |
News |
PowerRating), up 7.09% at 235.57, and the

Natural Gas Index
(
$XNG.X |
Quote |
Chart |
News |
PowerRating), up 4.98% at
128.95.

Losing sectors:

S&P Chemical Index
(
$CEX.X |
Quote |
Chart |
News |
PowerRating), down 3.82% at 161.89, and the

Forest & Paper Product Sector Index
(
$FPP.X |
Quote |
Chart |
News |
PowerRating), down 3.56% at
324.20.

Sectors with Most New 52-Week Highs (10 or more):

None

Watch List Action:

Back on our list (and formerly on the handle list) is Apollo Group
(
APOL |
Quote |
Chart |
News |
PowerRating)
as it has climbed its way all the way back to almost its 52-week high. What we
have now is a double bottom in place, and a potential spot for a new handle.
We’re going to put this on the “base” list and see what happens. This stock
has put in two days of accumulation since its bottom last Wednesday. Remember
this is still no market to go long in, but we’ll get an idea of the health of
things if we can see some breakouts succeed.

 

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
None	Â	Â	Â	Â	Â	Â	Â

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
None	Â	Â	Â	Â	Â	Â

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
Apollo Group	( APOL | Quote | Chart | News | PowerRating)	90	39.28	+ 0.14	2,163,600

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 Trader’s 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).