Saturday, May 14, 2011

Weekend Stock Reflections

Markets Friday continued to display corrective action. Finishing near the lows for the day. Volume did decline however, but a closer look reveals a more concise story. Leading stocks are maintaining a bearish mode with few if any breakouts, but more concerning, losing key moving averages that have been supportive through the uptrend. Thursday (we experienced some technical difficulties with the blogsite, our apologies) saw SOHU lose 8% on enormous volume. PAY lost 7%, AGCO 4% on Thursday as well. Friday saw market giants AAPL BIDU CAT CSX all lose their 50 day MAs. Recent rotation to more defensive related groups like healthcare and the like are adding to the concern of the bulls. The indexes themselves are still above their 50 day MAs however. The S&P 500, which lost 0.2% on the week, could test its 50 day near 1321. The Nasdaq, which was up barely on the week, is also above its 50 day which lies near 2775. Their is a lot of hot air between where it lies now at 2828 and 2775. The dollar strength this week, predominately on Euro weakness, clubbed commodity stocks. Here former leaders like FCX BTU lost their 200 day MAs. This could be a temporary move below that line, but more often than not it spells frustration. As commodities were the gel keeping this recent uptrend intact, could it prove its undoing on the way down? Time and the charts will tell, but the serious, violent nature in which these underlying resources looks not to be fundamental in nature to me. The recent actions by the CME to raise margin requirements on oil, silver and gasoline lately has led to the tremendous volatility we have experienced here. And as impressive as the dollar was this week, in my opinion its a dead cat bounce. Sure the boat is overloaded on the short side and needs some corrective action there but the chart looks weak. Energy is also wrecking havoc with former leading sectors such as transports and machinery. Again opinions mean nothing. Let the indexes and the price and volume activity determine your actions. JCP reports earnings before the bell Monday. On Monday morning we hear from the New York Fed on its monthly Empire State Index and also housing related data is reported. One quick thing to ponder. Is BID chart showing us the rich are feeling some pain? I know some will say COH TIF near all time highs, but they sell some stuff relatively inexpensively. Plenty under $100. Try going to bid on a Van Gogh painting for that amount.

With the market in correction mode, the following stocks should be considered a watch list. Wait for the market to see some accumulation before making purchases. That being said stocks near specific buy points include: 3 week tight patterns are COH 61.54, BBBY 58.00, ITW 58.89, CHKP 56.01, WCN 31.12, MWV 34.61, HRC 46.20, MCHP 41.60, UTX 90.77, UPS 75.68, PKI 28.85, HON 62.38, ALTR 49.69. Cup with handles are PVH 71.91, EBAY 34.75, VMW 99.29 (high handle), CHRW 81.63, MOLX 28.20, ATI 73.63, GTI 23.73, NSC 75.10 (cup dates back to 8/08 as seen on the weekly chart). 4 week tight patterns are IR 52.43, QCOM 58.56. Flat bases are RHT 48.48, DFS 25.21. Cup bases are SYK 65.31, JBL 23.19. EXPD 55.30 in a double bottom with handle base and NKE 91.22 in a double bottom pattern.

Stocks near 50 day support are DOW 38, EMN 100, HUN 18.55, PX 102, ROC 49.90, CAR 17.90, MAR 36, LULU 90, DKS 40.75, FAST 64.50, JWN 45.55, JCP 37.10, PAG 20.40, CBS 25, VIAB 47.50, ABV 29.55, ABB 24.50, WM 38, ARBA 32.15, ORCL 33.60, TIBX 27.50, FDX 92.10, UNP 97.50, TKR 51, EQT 48.20, IFF 61.90, IACI 32, RAX 41, HON 58.25, IP 29, TIN 23, ACN 54, ADP 52, RVBD 36.50, EMC 27, JDSU 20, TRW 55. Stocks that received 50 day support Friday were DECK RCL STJ SBUX VRSN APH AMP COF GTI OXY HK SUN ARUN AA MCP. No stocks that we follow retook their 50 day MA Friday, but some acted well and can be bought if they reclaim their 50 day MAs. They and their buy stop spots are APA 126, BHI 72, CRZO 36.30, NFX 73, JNPR 40.50.

Stocks near 200 day support are WRC 54, PPG 81.75, SOA 21.05, LVS 42, HOT 57, VPHM 16.95, JOYG 82, PH 82, MDRX 19.50, IL 21.50, TTMI 14, TROW 60, NUE 42.70, APC 69, ATW 37, CXO 85, COP 67, CLR 57, DVN 77, EOG 100, ESV 51, FTI 41, HES 72, MDR 19.10, NOV 62.50, NE 37.90, NBL 84, RDSA 66, SLB 77.50, SPN 32.20, WLT 109.75, WLL 57.50, DD 49.25, CLF 79, SWKS 26.40. Stocks that found 200 day support Friday were UPL EXPE LRCX BID RIO CAM SLW DO F SUN. Stocks that lost 200 day support Friday were MT ANR ACI BP. More and more energy stocks are now trading below their 200 day MA. An ominous sign. They include MTL X MUR PBR TCK ABX PAAS SWC VALE.

Stocks that can be shorted as they lose their 50 day MAs and their sell stop spots are DECK 87.25, VFC 98, FMC 82.55, WFM 62, SAP 61.75, CNI 74, KSU 53.60, COF 51.50, TDC 51.50, CMCSA 24.75, ARMH 28. Stocks that lost their 50 day MAs Friday were DOV CSX GSM BWA APD LYB CRL VPHM AN CAT. Stocks that can be shorted at 50 day resistance are UA 70, OPEN 100, WRC 58.25, LYB 41, AN 34, CBE 65, BGC 44, PLL 57, TRN 34.15, CVX 105, MRO 51.50, OIS 75.25, RRC 54, VLO 28. Stocks that found 50 day resistance Friday were TS BHI CPX EXXI HAL HLX MRO PTEN RES WMB ETN OMC KLAC NXPI GM.

We took a shot with BTU, again very small as it closed near at its 200 day MA.

Good luck.

The author owns HK BTU.

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