Sunday, November 27, 2011

Weekend Stock Reflections

Markets capped off an ugly shortened week Friday with the indexes closing near their lows for the day. Both the S&P 500 and the Nasdaq have now finished lower for 7 days in a row. The Nasdaq lost 5.1% and the S&P 500 4.7%. They also have had lots of trouble since late October when they both briefly pierced their 200 day MAs to the upside. Both benchmarks had massive October returns and now look as if they may be ready to test the lows once again. This type of volatility is typical in bear markets. Bottoms normally occur in a long rounded fashion. The SDS, which I believe has been a pretty reliable indicator, this week was up 10% and reclaimed both its 50/200 day MAs. It is in the process of forming a double bottom pattern with a buy point of 28.26. That is a long way from here, and positions could have been initiated on a break above those long term trend lines this week. Although economic news here was mixed, (revisions to GDP were revised lower, but jobless claims remained below the 400K mark), news from abroad was concerning. China had a disappointing manufacturing report which indicated a slowdown, and Germany also showed evidence of a weakening economy. These two powerhouses are worrisome. This news of course bolstered the greenback, giving the UUP almost a 2% weekly gain. The ETF has formed a 22.72 cup base buy point, but from a technicians point of view the cup is V shaped, which is more prone to failure. Of course commodities had a tough week. Ag charts have looked pretty sick for awhile now. AGU down 7 % for the week was the worst. GLD has been encountering hard resistance at its 10 week. Oil lost 1% on the week. Stick to the leaders there where stocks like COG FTI, both exhibited relative strength by finishing higher Friday. Transports and semis had a troubling week as well with QCOM SIMO both losing 7%. KSU lst 8%, UNP 7%. The pessimism seems to be reaching a feverish pace, and perhaps we could see a rally, we certainly look oversold here. In these times look for relative strength as these could be the first to rally if we see some upward movement on the indicies. These would include GNC ORLY WMT VRSK QCOR. XLU found 40 week support Friday as investors sought safety. Stocks forming bullish cup with handles and their buy points are AAP 70.10, FTI 50.30.

Stocks that can be shorted as they lose 40 week support and their sell stops are COH 58, CMG 294, LTD 37.85, WFM 62.90, AAPL 362, FFIV 97, JAZZ 34.25, URI 23.75. DKS BUD TIBX CPO WPI all lost 40 week support Friday. Stocks that can be shorted at 40 week resistance are TIF 70.25, ARMH 28, VMW 91.50, CHKP 54.25, CPO 50.10, AMGN 55.60, CPHD 32.95, MAKO 30, WPI 63.75, SM 72.10. Stocks that met 40 week resistance Friday were BEAV PCP TIF FE VMW CHKP RAX CBOE.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are ROST 84.25, TJX 58.15, WSM 34.75, CTXS 64, SWK 59, EMR 46.80, MA 340.50, PAY 39.45. Stocks that lost 10 wee support Friday were GOOG EXXI DG SBUX TSCO NVLS SGI. Stocks that can be shorted at 10 week resistance are VFC 131, DG 38.75, DLTR 78, ULTA 68.25, QCOM 53, IBM 181.50, ALXN 66, ADS 97, V 91, TROW 51.50, ABX 48.60, PPG 80.30, APC 74, NUS 45.50, DHR 46. Stocks that met 10 week resistance Friday were NKE UA KLAC QCOM DEO CNI IP ABX PPG CRZO CBS NUS NUE.

Stocks that can be bought at 10 week support are DPZ 30, FAST 36.95, M 29.05, MCD 90.70, SBH 18.25, BUD 55, GLNG 37, KSU 59.25, NSC 69, UNP 94, FIO 27.95, PMTC 18.20, RAX 38.80, HUM 79.25, DE 72, CAT 86, CXO 87, CJES 18.25, EOG 87.50, KEG 12, INT 37, NBL 84. Stocks that found 10 week support Friday were ROST SCSS TJX CTXS EMR EFX CE FMC JOYG PH NOV OXY ECL ARW. Stocks that can be bought as they reclaim their 10 week MAs and their buy stop spots are CBOE 26.10, NUE 36.20.

Stocks that can be bought at 40 week support are DECK 92, HXL 21.25, BBBY 55.50, COST 79, HD 35.50, INTC 21.95, IBM 171, NUAN 20.50, CELG 59.10. Stocks that found 40 week support Friday were WFM KLAC ABV DEO AAPL FFIV CBI CLR. FE (I am long), can be bought with a buy stop above its 40 week MA at 42.40. HRL retook its 40 week MA Friday.

Good luck.

The author owns FE.

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