Saturday, February 19, 2011

Weekend Stock Reflections

Markets Friday finished in the black again after some afternoon weakness. For the week the Nasdaq and S&P were both up 1%. Volume was higher due to option expirations, but the action of leading stocks posed some cause for concern. AAPL was down almost $8 Friday, and has had some heavy down volume days this year. That type of volatility when a stock is near a high is often associated with a short term top. That being said we must respect the price action of the indexes and understand leading stocks are still setting up buy points in abundance. Some leaders did demonstrate strength as ARUN bolted higher on earnings. Stocks hitting all time highs Friday include COST CAT APC JOYG PM TROW. Strong groups Friday were defense related as newspapers, food and HMOs out shined while refiners, miners, networkers struggled. Markets are closed Monday for Presidents Day and we can expect earnings Tuesday from HD M WMT before the open and CHK HLF HPQ after the close. Economic reports Tuesday include Case Schiller Home and consumer confidence.

Stocks near specific buy points include. 3 week tight patterns are LLTC 36.07, PETM 42.46, WAG 43.28, IBM 166.35, BLL 37.53, XLNX 34.22. Cup bases are COH 58.65, NKE 92.59, LTD 35.58, JNS 15.82, JPM 48.30, MS 32.39, WFC 34.35. Double bottoms are ABX 54.03, RHT 46.56, EXPD 55.88, BBD 20.89, SLW 40.10. Flat bases are TRW 63.36, BBBY 51.05, ONNN 12.05, ALB 60.80. Cup with handles are NBL 92.26, BK 32.60, AMAT 16.77. 4 weeks tight is HPQ 38.68. WAT broke out of a 81.10 cup base buy point on Friday, as did MUR from a 73.53 double bottom buy point. Two stocks which broke out but we did not purchase were PM, a double bottom buy point at 60.24, and TROW a 3 weeks tight pattern at 69.08. Both because volume was not above the minimum 40% volume burst or more. Sometimes volumes kicks in later, but discipline remains paramount.

Stocks that can be purchased as they reclaim their 50 day MAs are ABV thru 28.80, and ETF EWZ thru 73.25. Stocks that reclaimed their 50 day MA Friday include AB GFI PAAS. LYB is another leader that delivered earnings that were received poorly on to find 50 day support on the downside then rally furiously to the upside. AMP comes to mind as well there. Stocks near 50 day support are CMI here, GNTX 31, MGA 56, CY 20.50, SPRD 20, MT MTL here, TEL 36.10, ITW 54.15, PH 88, BP 46, BTU 62.50, PBR 36.40, BHP 91, RIO VALE here, AGU 90, MON 71, SINA 80, MCD 75.50, CE 42, HUN 17, SOA 24, ADSK 41, INFA 46, ORCL 32, UNP 94.50, ETN 105, GR 90, SWC 22, CCJ 40.

Stocks near 200 day support include JRCC 19, ORLY 53.60, IBN 45, UPL 44.90. BUD can be purchased if it can reclaim its 200 day MA thru 55.50. TGT is good evidence of ominous times ahead once you lose the 200 day. Was down another 2.5% Friday. TAP found 200 day resistance Friday, after losing its 200 day recently. Stocks that look like they have had a sea change since reclaiming their 200 day MAs since December include HPQ PBR LLL LMT RTN BBT BAC PNC SANM SPWRA. Summary, respect the 200 day.

Stocks that have taken out par in the last week or so and have performed strongly were CAT up $6, CXO up $5.50, OXY up $7 all in a very short period of time. JOYG closed above $100 Friday. Stocks very close to par now include FDX CVX PX SLB. Hmm, just being silly, but 5 of the 8 symbols mentioned in this short paragraph have an X in them. I love looking for patterns but that was wacky.

Stocks that are behaving bullishly by holding very tightly after recent gap ups include RL WFMI EL LAZ AET DIS MMC.

Stocks looking weak include copper names SCCO FCX which look shaky at best now living comfortably below their 50 day MAs. FFIV MIPS NTAP ROVI TCK continue to struggle below 50 day resistance after recent earnings reports. MSCC TTM both found 50 day resistance again on Friday. AEM WLT sliced their 50 day Friday. Stocks that can be shorted near their 50 day MAs include BEAV 38, STT 47, OVTI 28.40. Other stocks that lost their 50 day Friday are CCL VMW REE MCP.

Recent purchases EMN APC both finished lower Friday, but above buy points.

Good luck.

The author owns EMN APC.

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