Markets rallied Thursday and Friday this week but a deeper look under the action tells us the move upward was weak and not sponsored by and leading stocks. In fact this week many leaders acted wobbly. AAPL, the 800 pound tech gorilla, has the feel of a trend change. It torpedoed below its 50 day MA on Wednesday and really has not looked back. Sure it was courtesy of a downgrade, but a few firms reiterated their price targets higher, and true leaders can shrug off a downgrade. Sure the market is in correction mode, but living below the key 50 day line is unfamiliar territory for AAPL. DECK lost its 50 day this week. FFIV plunged below its 200 day MA. Of course I am not going to ignore all the circumstances occurring around the world. Now we have coordinated airstrikes on Tripoli, a large explosion in Nigeria (an important US supplier of light sweet crude), Israel and Hamas skirmishes. And it is tragic and terrible, but in the trading world all that is just noise. Pay attention to the market leaders, and the indexes price and volume action. For the second week in a row the Nasdaq has lost ground. And it was accompanied by higher volume. It lost 2.64%, almost identical to the prior weeks loss. The S&P 500 also lost ground for consecutive weeks. It lost 1.92%, better than the Nasdaq. Perhaps a dead cat bounce to the 1300 level, then a resumption downward again? We will reassess that bridge if and when we have to. SDS found 50 day support Friday, as the S&P 500 finished off its highs for the day. A hallmark for a bear market when indexes start higher and weaken into the close. Both major indexes once again remain below their 50 day MAs. Gold miners were among the winners Friday, while solar, retail and fiber optics were the losers. TIF reports Monday morning and we get reports on existing home sales.
Although the market is in correction mode and buys remain risky, keeping a watch list is imperative. Stocks forming bases are DVN, flat base buy point of 92.20. 3 week tight patterns are TPX 49.97, HUM 66.92. Cup with handles are RES 21.67, ARW 43.00, NCR 20.72, WLP 69.66.
Stocks near 50 day support are GSM 20.50, DHR 49.20, CAT 100, PLL 53.50, BHI 66.50, CAM 56.50, CHK 31, COP 73, HOC 52, MDR 22.10, BTU 64, PBR 38, CLR 63.75, RRC 49, RDC 38, SU 42, TSO 22, WLL 62, ATW 42, MRO 47, UPL 46, WNR 14.10, WMB 28, NBR 25.60, DKS 37.25, PLCM 46, TSCO 51.25, TDC 47, ARUN 27, RAX 35.75, ANN 24, SBUX 33.25, WFMI 56, YUM 49.90, DD 52, PM 60, SWK 72.05, WY 23.50, TIBX 23.50, CSX 72, NSC 64, PAY 45.15, TTWO 14.50, ARBA 28.25, FTNT 40, AON 49, CBG 24, DTV 44, CBS 21.90. Stocks which received 50 day support Friday were PAG BWA ALTR A JOYG HAL UPL RL UA SINA AAP EL ROST NFLX WYN RAI KKR CHKP INFA TER NCR MMC ADTN (SDS). Stocks that can be purchased if they reclaim their 50 day MAs and the buy stop spots are APA 121.50, APC 79, ABX 50, PAAS 36, DE 92, GD 75.60, LLL 79.25, NOC 68.25, LTD 31.25, ORLY 56.50, AMP 62.30, UNP 96.40, RJF 46.30, TTM 26.25. Stocks that reclaimed their 50 day MAs Friday were CBE CRZO JPM MWV.
Stocks near 200 day support are ALV 67.50, CMI 92.50, F 14.25, MGA 45.50, TRW 45.50, ATML 9.50, LRCX 46, MT 33.60, MTL 26, X 49.50, JBL 16.15, TEL 31.05, WFT 19, RIO 61.50, VALE 31.05, SWC 18, LDK 10, SCCO 38.80, COH 47.50, LOGI 17.60, SQM 48, RTN 48, GOOG 552, AMZN 156, BBBY 43.95, JWN 38.80, MAR 37, ABV 25.60, ORCL 28, PMTC 20.50, ROVI 51, CTXS 62, CHRW 70, FDX 86.50, UPS 68.25, BAC 13.50, MS 26.70, CRUS 17.90, MOLX 22, AMT 49.90. Stocks which found 200 day support Friday were BRCM LLTC JKS CCL CRM EXPD GS BEAV TTM. Stocks which found 200 day resistance Friday were LVS BUD FNSR SNDK. Stocks that lost their 200 day Friday which is almost always a red flag were MIPS NKE PVH RHT. Stocks that can be shorted under their 200 day MA and the sell stop spots are BRCM 38.75, MSCC 19.35, CRM 116. Stocks that can be shorted at 200 day resistance are AEM 69.25, NKE 80, PVH 58, NTAP 49.25, INFY 66.30, BBD 19.10, IBN 46.
Stocks which can be shorted at 50 day resistance are KSU 52, LAZ 43.50, RIMM 64, ASML 42, WBC 59.75, BHP 92, CLF 90, ETN 53.50, APH 56, EMR 59.30, DECK 81, AGCO 53, AGU 92.50, COST 73, CE 42, SOA 23.90, WYNN 121.50, AMTD 21, IBM 160, ADSK 41.50, JCI 40, ADI 39, AVGO 31, FCS 18, KLAC 46, MCHP 37, SWKS 33.40, TXN 35, RS 54, TKR 49.50, ATU 28, XOM 82, HES 81.50, TCK 57.50. Stocks that can be shorted under their 50 day MAs and the sell stop spots are LYB 37, PCLN 445, URI 28.50, VRSN 34.60, APKT 65, NXPI 26, CCK 36, SUN 41.70, DOV 62.50, CXO 99, NOV 74.75, PXD 95, VLO 26.50, EXXI 29.75, OIS 68, RL 116, OPEN 84, BIDU 116, LULU 74, CMG 240, FOSL 75, PETM 40. Stocks that lost their 50 day MAs Friday were JCI KLAC JNPR RVBD ANF PETM CTXS. Stocks that met 50 day resistance Friday were RS TKR XOM HES OXY SLB SPN RIG WLT CLF FCX APH EMC DE LTD DIS DOW BX CTSH ADP FLR KSU WDR ASML HON AET AMT. Stocks that showed relative weakness Friday were ARMH X COP DECK MOS POT FFIV NFLX WYNN VMW JDSU. HP had an outside reversal day. CHRW RHT both looking like head and shoulders bearish patterns. RHT losing its 200 day in the process. Not good.
Good luck.
The author owns FCX.
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