STP established this past week that it is on a major "sustainable" rally when it was able to generate a weekly close above a resistance level of consequence at 46.79. Nonetheless, on a daily and weekly closing basis, the resistance is very strong up at the $49 level with 3 previous daily closes between 49.02 and 49.18 and one strong weekly high close at 49.02. The weekly chart seems to suggest there will be follow through to the upside this coming week, but the daily chart does have a very strong intra-day resistance at Friday's high of 48.64 as that is where the 200-day MA is currently located. That level is likely to be a major pivot point for the week. If the stock is able to rally above that level on Tuesday, intra-day rallies up to as high as 50.58 could occur. Nonetheless, if unable to get above that level, a strong correction is likely to be seen with a potential drop down to 41.60 during the week. Nonetheless, the likelihood of a rally above 48.64 is high and if it happens, the 41.60 downside objective would no longer be in play and would be replaced with 42.97. A level that would likely be reached in a corrective phase to be seen 2 to 3 weeks from now. The action on Tuesday is likely to be short-term significant.

YGE over the past 8 weeks has built a very strong support base from which to launch a "sustainable" rally, and it is now likely the stock will trade over the next few weeks between 16.70 and 21.30. On Friday the stock was able to close above the most recent daily closing high at 17.86 and gave notice it is likely to be heading higher short-term. Nonetheless, this coming week the stock will have an important short-term pivot point at the 18.80-18.90 level that will decide what the stock will do for the week. On a daily closing basis, there is strong resistance between 19.91 and 20.52 (21.30 intra-day) but the 20-week and 100-day MA's are both around 18.80 and offer stiff resistance as well. In looking at the charts, it seems likely that on Tuesday, the stock will get up to around 18.80-18.90. Nonetheless, in order to decide whether the stock will be able to get above the MA's and get up to the daily and weekly closing resistance around $20 ($21 intra-day), you should keep a close eye on whether STP is able to get above 48.64 or not. That action will help you decide what to do for the week. Either way, though, the stock is looking supportive and at the beginning of what seems to be a longer-term rally.

VLO broke out of the "coil" formation that it had built over the past 6 weeks but was not able to generate enough buying to break above the previous high at 36.30 or close above the 50-day MA. Nonetheless, the stock continues to show signs of strong support, as each previous low has been consistently higher than the previous one. In addition, the chart formation now in place, seems to suggest strongly an upward breakout. It is also important to note that 3 years ago to this day, hurricane Katrina ravaged the Gulf oil rig areas and the stock rallied from 44.25 to 58.63 in September of that year. As of this writing, hurricane Gustav is heading in the same direction as Katrina and is almost as powerful. The present path of the hurricane will likely cause some damage to the oil rigs and gasoline supply areas in that region and the same effect that was seen 3 years ago might be duplicated this time. By the time the market opens on Tuesday, the stock should already be showing signs of what it will do next week.

JBL showed no direction and traded totally sideways this past week. Nonetheless, during the week the stock dropped to the 16.42 level on two occasions testing successfully the 50-day MA. Since May of this year, the stock has been in an up-trend and has been successful is testing and staying above the 50-day MA during this time. In addition, the stock went back down on Friday to the ame low seen a week ago Thursday at 16.77. This drop, if negated on Tuesday with a rally above 17.44, will be seen as a successful re-test of the lows of the week and should generate a strong move up. Stops should now be raised to 16.32 as any break of the 50-day MA, and this past week's low, would be considered short-term bearish and likely to generate a move down to the 100 and 200 day MA as well as the 20 week MA at 14.25. Nonetheless, the trend is up and the necessary base building action above the breakout point at 16.57 has now been accomplished. Resumption of the up-trend is more likely to happen than a break of support. This is not a stock that generally mimics the action of the indexes.

RIO had a inside week with lower highs and higher lows than last week and on a weekly chart basis, nothing can be determined from such action. Nonetheless, on the daily chart, the open gap down at 25.76 was closed and the stock now shows a pennant formation with the flagpole being from 23.90 to 27.75 and the pennant having a bottom at 25.58 and the most recent top at 27.44. A break above 27.44 would suggest an objective of 31.29. It is also important to note that the stock, on a daily closing basis, was able to hold itself above 25.92 and that level has not only been an important pivot point but also considered strong support. The chart is leaning toward upside movement this coming week. An intra-day drop back down to 26.28 is possible but that level could end up being the low for the week. A close below 25.92 would be considered a short-term negative. Possible trading range for the week is 26.28 to 28.14, or higher.

KGC mimicked RIO this past week as it too had an inside week and is showing a flag formation with the flagpole being from 14.65 to 17.45 and the flag being from 17.45 down to 16.25. A break above the top of the flag would project a move up to 20.25. Like RIO, KGC seems to have tested successfully the breakout area at 16.50 with a close during the week at 16.39. Nonetheless, a break in KGC below the week's low of 16.25 would not necessarily be negative as the support down at 15.92 is also decent. With Friday's close being at 16.45, it is evident that the stock will be giving a clear signal of its direction for the week, early in the week.

HRB had a breakout this past week when it was able to close above the previous 3-year daily closing high at 25.41. In addition, the stock was able to maintain its strong weekly up-trend with one more week showing a higher close. During the past 10 weeks, the stock has had 9 higher weekly closes and only one very minor correction close. It is evident the stock is in an overbought condition. Nonetheless, it is important to note that going back to 2002, the stock has shown 25.75 to be a major resistance level with 11 weekly closes at that level or lower. During the past 7 years there has only been 3 weekly closes higher than 25.75. One was at 26.25 and the other two form a double top up at 29.81. With such an overbought condition and the indexes heading into a historically negative month, it seems highly unlikely that the stock will be able to be successful in generating any further upside above the 25.80 level seen this past week. Probable trading range for the week is 25.60 to 23.90.

BA was successful in building, with the rally this week up to 66.98, a bearish looking "diamond" formation. In addition, the stock broke and closed above the 50-day MA on Thursday but was unable to generate any follow through on Friday and negated that breakout by closing below the line. With the double top firmly in place up at $68, the failure on Friday to generate a positive close (closed at the same price as the previous Friday), and the probable weakness in the indexes this month, it seems highly likely the stock is heading lower starting this coming week. Support is important at 62.87 and a break of that support will likely act as a catalyst for strong downward movement. The diamond formation, if broken (a break below 62.87) gives an objective of a drop down to the $55-$56 level. I do want to remind everyone that this stock broke a massive 1-year weekly Head & Shoulders formation in June, and the objective of that break of the neckline is $40. Reaching that objective, though, would take the same amount of time it took to build the formation (1-year). It is evident that the next 2-weeks will be of great importance to this stock.

CAT broke below the 100-week MA 8 weeks ago and during this period of time has been unable to close above it, even though one week it traded intra-week much above it and the other 7 weeks it traded up to that line. It is also important to note that Friday's close continued to be below the recently strong resistance at 70.90. Like with BA, CAT broke above the 50-day MA on Thursday but failed to generate any follow through and negated that break by closing below that line on Friday. The strong intra-day resistance between 71.75 and 72.27 was also tested on both Thursday and Friday with highs at 71.81 and 71.97. The failure to close above the weekly resistance at 70.90, especially after the late week strength, is a major negative. The stock did leave a gap between 69.86 and 70.14 on Thursday and it is highly likely that gap will be filled on Tuesday. A drop down to the 68.14 looms highly probable and if the stock is able to break below the most recent important low at 67.61, a move down to test the 9-month low at 65.85 would likely occur. The stock is showing inability to generate any kind of lasting rally and with the indexes likely to be under pressure in September, a re-test of the 200-week MA down at $65 seems probable. One last thought, the weekly formation is conducive to strong further breaks and if the 200-week MA is broken, a potential drop down to the $50 comes into view. A daily close above 72.07 would throw a monkey wrench into this scenario.

AXP gapped up and broke above the 50-day MA on Thursday but was unable to generate any follow through on Friday, though it was able to confirm the breakout by giving a second close above the line. Keep in mind that under the present conditions of the marketplace, the 20 and 50 day MA's do not carry as much weight as if the stock was in a clearly defined trend. It is also important to note that the $40 level has been a major bone of contention for the last 8 weeks and though the stock was able to close above that level on Thursday, that close was negated on Friday. It is evident by the failure of the stock to follow through, that the gap down at 38.90 is likely to be closed, as well as a re-test of the 50-day MA to occur. Should the stock close below the 50-day MA the positiveness of the breakout would be negated. In addition, the continued failure to generate a beachhead above $40 should begin to weigh heavily on the stock. With the indexes under likely pressure this week, AXP will have a tough time generating any upward movement. Nonetheless, any further strength above Friday's high at 40.47 would have to be considered as positive. Any daily close below 37.81 would likely cause the stock to test the recent lows at 35.10.

K has been trading in a sideways trading range for the last year but 3 weeks ago the stock reached to top of that range and began to correct back down. This past week K showed some strength but when it was all said and done, the stock was unable to generate a higher close than last week and after the strength shown in the latter part of the week, that fact must be considered a negative. The level between 55.00 and 55.98 has been a brick wall in the past as well as during the last 4 weeks. There is an important intra-day high at 55.19 that should act as strong resistance if the stock is in effect topping out. Friday's high at 55.00 might be considered a successful re-test of that level if the stock fails to rally higher on Tuesday. Any movement below Friday's low at 54.35 would be negative at this time and likely to generate a move down to test the most recent low at 53.04. A break of that level would thrust the stock down to where many of the MA's are currently located down around the $52 level. Any rally above 55.19 at this time, would be reason to consider liquidating the short positions.