Monday, October 31, 2011

Monday Recap

Markets finished off a very strong October Monday in a very weak fashion. Both the Nazz and S&P 500 lost their respective 200 day MAs they just recaptured last Thursday. The Nazz lost 2% today while the S&P 500 lagged with a 2.5% loss. For the month the Nazz finished higher by 11.1%, and the S&P 500 by 10.8%. Volume was lighter than average today and leaders managed to escape serious damage. A stronger greenback because of Japanese intervention selling yen put a damper on commodities. XLE found stiff 200 day resistance with APC EOG NOV all fell by 6%. Ags were hit today with both POT MON down by 5%. Banks were seized lower, pun intended, with GS JPM B all lower by 5%. Semis were weak today with the SMH falling 2.5% and headed for a test of 200 day support near 31.35. ASML ARMH were both down 4%. KLAC AVGO XLNX showed strong action despite the weak tech tape. Retail did outperform with some in the group even finishing higher on the day. They included BBBY PIR TIF. Discount retailers also finishing in the green were ROST DG DLTR. Recent gap ups that outperformed today were ORLY SWI MCD. Today being the last day of the month could certainly had something to do with the days weakness. Some leaders consolidating recent gains is bullish price action. Also many could be in the process of forming handles. Potential double bottom with handles are ANN WSM YUM AXP AET RDSA. Potential handles forming in cup bases are DSW CHKP ASML MXIM BEAV PAG. HLF was lower after hours on earnings. APC FMC were up slightly after hours on their earnings. Tomorrow earnings reports come from AMT ABC BHI FE HSIC WPI before the open and EOG FISV JAZZ SIMO after the close.

Stocks that held up well displaying good relative strength today and near specific buy points include NC 25.96 in a double bottom with handle formation. MKC 49.94 in a cup with handle base. SBUX 43.53 in a 3 week tight pattern and AET 41.95 in a double bottom base. Many times stocks that breakout will fly ahead quickly only to retreat back to their original buy points. Stocks which have broken out very recently and are now back near buy points include PM which is now 1.5% below its 70.88 double bottom buy point. M is now a less than 1% below its 30.72 cup base buy point. TIF held its 77.94 double bottom breakout nicely today. TSCO is still 1% above its 70.20 cup with handle buy point. WMT is just above its 56.49 double bottom with handle buy point and COG is 1% below its 78.75 double bottom buy point.

Stocks near 200 day support which could pose a good buying opportunity are ABX 49, ANN 26, MON 69.90, BIDU 134, FFIV 98, R 49.30, CTXS 70, ORCL 31.70, SAP 58.40, ADP 51, MCO 34, AET 39.50, XRAY 36, CBS 24.75, AMT 54.15, VZ 36.50, LLTC 31.95, NVLS 33.55, XLNX 32.45, GRA 40.10, PPG 84.50, PX 100.45, APC 76, NBL 88.25, SWN 40.10, PAG 19.75, KMT 38.50, CBI 36, IFF 60. Stocks that found 200 day support today were NTGR AZN ARMH AVGO TYC. Stocks that can be shorted at 200 day resistance are JNY 11.95, BAX 55.50, DTV 46.35. JNY WLP BSFT CMCSA WYNN all met 200 day resistance Monday. A bunch of stocks lost their 200 day MAs today and included BUD DMND DFS FISV CRM ADI CE CLR FMC EXXI XOM HFC NOV OXY VLO WNR UPS DHR JOYG PLL PH CMI JBHT. ATHN can be shorted under its 200 day MA with a sell stop of 49.50. Buy stops can be placed on JOYG @88.20, PAY 44.15 if they can climb through their respective 200 day MAs.

Stocks near 50 day MA support are BHP 76.20, NEM 64, RIO 53.50, FCX 38.50, ED 57, FE 44.20, DE 73, CELG 62.50, BMY 31, NVDA 14, BBT 22, JPM 33, WFC 25, BTU 42. ABX KO MAKO HAL ABB FWLT X all found 50 day support today. HANS retook its 50 day MA today. Stocks that can be shorted as they lose 50 day support and their sell stop spots are LULU 53.75, IACI 39.75, QCOM 51, MMM 77.50. AA DAR WPI CVI CHK all surrendered 50 day support today. Stocks that can be shorted at 50 day resistance are HSY 58.50, WPI 67.70. GG AMZN DFS all encountered 50 day resistance today. CMG had an outside day and could have formed a double top with today and 9/20 day. Late stage bases more prone to failure.

Good luck.

The author owns FCX DE. We sold our CVX this morning in the pre market for a $2.40 loss. The first loss is usually the best one to take. Looking to add to FCX DE near 50 day support.

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