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Issue #353 
November 24, 2013 | Newsletter
The newsletter with chart analysis for stocks and stock indexes |
Stock Indexes Analysis/Evaluation
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| Upside Objectives Reached, End of Rally?
DOW Friday closing price - 16064
The DOW continued its torrid pace to the upside, generating the 7th green weekly close in a row and the third week in a row of new all-time high weekly closes since September. The index once again closed on the highs of the week suggesting that further upside (at least on an intra-week basis) will be seen this coming week.
Having reached the 16000 level, and at this time of the year (last 6 weeks of the year), the DOW is likely to start seeing some end-of-the-year profit taking, especially since the index has increased 16% in value in the first 11 months of the year. In addition, traders will be anticipating that the Debt Ceiling issue in January will cause selling to be seen, meaning that taking profits in December could be considered the intelligent thing to do. It should also be mentioned that the index has reached the next psychological resistance and the top of a 13-year channel line that is drawn using the 2000 and 2007 highs, suggesting that chart buying interest is likely to diminish. This is especially true considering there are few fundamental and chart reasons to believe that further upside can be seen under these conditions.
On a weekly closing basis, there is no resistance above. On a daily closing basis, there is no resistance above. On a weekly closing basis, support is minor at 15072 and decent to perhaps strong at 14799/14810. On a daily closing basis, very minor support is found at 15900 and minor between 15658 and 15680. Below that, minor support is found between 15409 and 15413, minor again at 15168, and decent between 14960 and 14996.
With the DOW having closed above 16000 on Friday, it can be said that the upside objectives have been reached and that technically and chart-wise the traders don't have higher levels they can comfortably expect to achieve without some correction occurring, especially since no correction has been seen for the last 7 weeks and 1345 points. The risk factors under these conditions far outweigh the profit potential that could be made.
To the upside, the DOW could still go up a bit more intra-week as the actual intra-week top of the 13-year channel is at 16250. In addition, general resistance is not found until 16300 (300 points above 16000) meaning that further upside of as much as 200-250 points could be seen this week. Nonetheless, on a weekly closing basis the top of the channel has been reached, meaning the probabilities are high that a red close will be seen next Friday, which in turn would confirm the validity of the channel with a third point.
To the downside, the DOW will now show minor daily close support at 15900 and then general support at 15700, which includes the previous intra-week highs at 15658 and at 15709. Further but minor support is found between 15522 and 15545 that incorporates the general support usually seen at the 15500 level. It can therefore be assumed that the 15500-15545 has become an important pivot point that if broken would likely signal a drop back down to the 15000 level, which now also includes the 200-day MA, currently at 15000. In addition, the last correction seen in the index was 990 points, meaning that a drop back down to the 15000 level would not be surprising from a chart point of views. By the same token, there seems to be no fundamental catalyst on the immediate horizon that can trigger a selling or profit taking binge of consequence before the New Year.
The DOW is likely to trade mostly around the 16000 level this coming week as participation will probably be low due to the Thanksgiving Holiday that offers only 3 and a half days of trading, of which most of the trading is likely to be done on Monday and Tuesday. It is expected that a red close will be seen next week but not likely to be strongly indicative. Last week's trading range was 203 points and this week it is likely to be that or less, with 15900 to 16100 being the likely trading range.
NASDAQ Friday closing price - 3991
The NASDAQ made another new 13-year high having gone above last week's high at 3985 and up to 3994. The index closed on the highs of the week and further upside, at least up to the 4000 level, is likely to be seen this coming week. Nonetheless, contrary to the previous week, the upward momentum slowed down measurably as 3 of its main stocks (NFLX, AAPL, and GOOG) generated red weekly closes, suggesting that the index may be near a top.
The NASDAQ is facing psychological resistance at 4000 and though in its history that specific price has not been considered a "stopper", it does seem that the bulls are having a tough time even getting the index up to the level as it has traded above 3950 on 4 of the last 5 weeks, but has not yet touched 4000. With all the other indexes having reached their upside objectives and expected to head lower by the end of the week, it does make sense to think that further upside of consequence above 4000 will be difficult to accomplish.
On a weekly closing basis, minor resistance is found at 4069 and decent to perhaps strong resistance is found between 4234 and 4252. On a daily closing basis, there is no resistance above for the past 12 months. On a weekly closing basis, support is very minor at 3919 and at 3791 and very minor again at 3689. Below that, decent support is found at 3589. On a daily closing basis, support is very minor at 3952, and minor at 3921. Further minor support if found at 3907and minor to perhaps decent at 3857. Below that, there is minor support at 3804 and at 3789. Decent to perhaps strong support is now found at 3677.
The NASDAQ did break out, a week ago Friday, out of a mini flag formation on the daily chart with the flagpole being the rally from 3650 to 3966 and the flag being the trading range the next 3 weeks down to 3855. The flag formation was negated this past week when the index dropped all the way down to 3911 (below 3966), meaning that the bulls were unable to "cash in" on ammunition they had obtained. Failure to follow through without specific negative fundamental news is usually a sign that a change is about to occur.
To the upside, the NASDAQ show no intra-week resistance until 4072 is reached. Further and stronger resistance is found at 4192 and then even stronger between 4259 and 4303. To the downside, the NASDAQ now shows a minor but likely indicative intra-week support at Wednesday's low at 3911. Additional minor support is found at 3903 and a bit more at 3887. The important support at this time is 3855, which now also includes the 50-day MA. A break below 3855 will signal that a top to this rally has been found.
It is expected the NASDAQ will see some follow through to the upside this week but with it being a shortened Holiday week and some of its main stocks now looking like some downside will be seen, it is not expected the index will get much above 4000, with perhaps the top of the demilitarized zone at 4030 as the likeliest high objective for this coming week.
SPX Friday closing price - 1804
The SPX made a new all-time high weekly close at 1804 and closed on the highs of the week, suggesting further upside will be seen this coming week. Nonetheless, 1803 was the upside weekly close objective based on the rally that was seen at the end of the recession in March 2009 from a weekly closing low of 683 to the subsequent high seen 25 months later at 1363 (680 points), and from which an 18% correction occurred. Having rallied 681 points from that same weekly closing high at 1363, it does suggest the index will be generating a red close next Friday.
The SPX has now rallied 158 points (almost 10%) in just 7 weeks and finds itself 94 points above the previous weekly closing high at 1709 that is considered the closest support anywhere, and even then it is considered minor support as a previous "high" weekly close. The risk/reward ratio on a purchase above 1800 must be considered less than 1-1, suggesting that the bulls are not likelyi to be very aggressive at this time.
On a weekly closing basis, there is no resistance above. On a daily closing basis, there is no resistance above. On a weekly closing basis, there is minor support at 1690 and minor again at 1667. Below that level, minor to decent resistance is found at 1632 and decent at 1592. On a daily closing basis, support is minor at 1781, very minor at 1767, minor to decent at 1747, minor at 1725, minor to perhaps decent at 1698/1700. Below that, there is decent/copious support between 1676 and 1685.
The SPX is now 200+ points above its previous highest levels ever (1550-1576) and considering that new all-time highs generally generate a rally of 15% before a correction is seen back down to the previous highs, the index should not get much above (if any) the 1812 level, which is 15% above the previous intra-week high at 1576 seen in 2007.
To the downside, the SPX shows minor support at Wednesday's low at 1777 and further support at Wednesday's low of the previous week at 1760.. Further minor support is found at 1752 and a bit stronger at 1746. Below 1746, the index shows no support until the 100-day MA, currently at 1700 is reached. With the index having generated 7 weeks in a row of green closes and only a very minor intra-week low at 1746 that was below a previous weeks low, it does suggest on the weekly chart that a break of 1746 would take the index down to the previous all-time high weekly close at 1667 seen in May.
The probabilities favor the SPX going slightly higher this coming week with perhaps 1812 as the upside intra-week objective. Nonetheless, the weekly chart does suggest that whatever upside is seen during the week will be given back by Friday, with the index likely to generate a red weekly close on Friday. Either way, it is likely that the index finds itself at a level that where the bulls will have much difficulty in generating additional buying interest.
The indexes have now all reached upside objectives where traders are likely to take profits or even begin to institute short positions. Trying to generate further upside above these important psychological resistance levels is a folly as the risk/reward ratios are very bad for the bulls, especially since there is some talk that the Fed may start tapering the Stimulus program in December instead of waiting until March as was expected a few weeks ago.
It should also be mentioned that the indexes usually begin a decent to strong correction in the first quarter of the year with the correction often starting in the first 4 weeks of the year. With this year the traders facing an additional big negative in the form of the Debt Ceiling issue that comes to a head on January 17th, the probabilities are even higher that selling will begin to be seen soon.
There are a few important economic reports due out this week with Housing information and Consumer Confidence on Tuesday and Initial Claims and Durable Goods on Wednesday. Economic reports have generally been better than expected but the traders have not responded to them as they would have in the past as these days, due to the Fed involvement, "good is bad and bad is good". Expect a slow week with some minimal strength at the beginning of the week and some minimal weakness at the end of the week, finalizing in a red close in the indexes next Friday.
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Stock Analysis/Evaluation
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CHART Outlooks
I do believe the indexes are nearing a top to this rally and that a correction of consequence will begin soon. By the same token, the correction is likely to take as much as 4 months to occur and the "bulk" of the profits (if the chart evaluation is correct) are not likely to be made until after the New Year. What this means is that whatever short positions are put on at this time are not likely to deliver immediate results of consequence.
By the same token, putting on the short positions over the next week or two should offer the best entry points, lowest risk, and highest profit potential, and for that alone are worth putting on.
SALES
AAPL Friday Closing Price - 519.80
AAPL made a new 10 month high 4 weeks ago with a rally up to 539.25. The new high was made after the new I-Phone was introduced that generated record sales the first week, as well as a few weeks after it was announced that Carl Icahn had invested $1.2 billion into AAPL. The market has continued to go up during the past 4 weeks and in an impressive fashion but the stock has failed to follow through to the upside, suggesting no further upside above the recent high will be seen.
On a chart basis, AAPL has stalled at what previously was an important support level in the 527.67-530.38 area having generated a high weekly close 5 weeks ago at 525.95. With the inability of the stock to close above the previous support level, thus suggesting the long term uptrend has resumed, it likely means that the stock is now in a sideways trend with the $527-$530 level as the top of the channel. It should be mentioned that it is normal for stocks to see a progression from a downtrend to a sideways trend before an uptrend can begin, with the sideways trend usually lasting anywhere from 6 months to 2 years.
AAPL ended up having an uneventful week this past week having had an inside week without any indicative movement. The stock did close in the red on Friday and right around the $520 level but it is likely the close had to do more with options expiration day with $520 being a key option level, rather than any meaning as to what the stock will do this coming week. With the indexes likely to show a bit of strength early in the week and the stock having stayed back last week, the probabilities favor a rally this week with the previous week's high at 529.28 as a level to be broken to the upside. On an intra-week basis, resistance is found between 531.91 and 533.23 that should be seen sometime either this coming week or the next. That rally will be used to short the stock.
To the downside, AAPL shows support on the weekly chart at 512.38 and a bit stronger between 505.75 and 501.23. Below 501.23 there is no previous intra-week support found, other than the always important psychological support at the $500 demilitarized zone (497.000-503.00), until minor support is reached at 474.11. Further support on a weekly closing basis will be found at the 50-week MA, currently at 466.00. It should be mentioned that on the daily chart, support will also be found at the 50-day MA, currently at 499.40.
It should be mentioned that AAPL broke the long-term downtrend when it was able to get above the high at 465.75 seen after the 200-week MA was tested successfully. That high has to be considered the bottom of the sideways trading channel. Nonetheless, it should be mentioned that if the indexes do get into a strong corrective phase, the stock could drop intra-week to the 200-day MA, currently at 458.50.
Sales of AAPL between 531.91 and 533.23 and using a stop loss at 539.35 and having an objective of 466.00 will offer an 8-1 risk/reward ratio.
My rating on the trade is a 3.5 (on a scale of 1-5 with 5 being the highest).
HD Friday Closing Price - 79.18
HD made a new all-time intra-week high at 82.27 this past week, above the previous all-time high at 81.56 seen in May. Nonetheless, on a closing basis (both daily and weekly) no new highs were made as the all-time high daily and weekly close has been 80.54. The highest closes in the past 2 weeks have been 80.38 on a daily basis and 80.05 on a weekly basis.
HD has been trading mostly sideways since May between a low of 72.20 and a high of 81.50. With the SPX having broken out of its 5-month sideways trading phase 6 weeks ago and having rallied almost 8% above its May highs, it suggests that the stock should have rallied up to at least the $86 level to have kept pace, and it hasn't. This does suggest that the $80 level is a strong resistance, both chart-wise and fundamentally, that would require extra positive news or much further upside by the indexes to generate a break above.
Additionally, HD has tested successfully the 200-week MA, currently at 75.05, on 3 different occasions over the past 2 months and yet with the exception of the new intra-week high this past week, no new highs were made off of the successful retests. Having had 3 successful retests of such an important line and no new closing highs made has to be considered disappointing to the bulls. With the stock having generated a reversal week this past week in spite of the new all-time high close of the SPX, it does suggest that the sell interest will increase if the stock doesn't make new highs again this week and/or the index does not continue heading substantially higher.
HD did close on the lows of the week and further downside below last week's low at 78.78 is likely to be seen this week. It is likely the stock will test the runaway gap between 77.69 and 78.06 this week and if it holds (likely) the bulls will get back short-term on the buy side and test last week's high at 82.27 before deciding what to do. It is unlikely that unless the SPX continues substantially higher, above the 1812 objective mentioned in the index evaluation above, that the bulls will have success in turning around the negative reversal seen this past week.
To the upside, HD will show intra-week resistance at 81.23 and at 81.56, as well as at 82.27. On a daily closing basis though, resistance will be found at 80.54. Probabilities favor the stock getting back up to at least the 80.54 level is not up to 81.23/81.56.
To the downside, HD shows minor support at the gap area at 78.06 as well as at 77.89 from a minor intra-week low seen on July 26th. Further support is found at the 200-day MA, currently at 75.00. Below 75.00, intra-week support will be found at 74.78 and at 73.74. Strong support is found at the double low at 72.41/72.21. Below 72.21, no support of consequence is found until 63.82 and at the $60 level.
It is becoming evident that bulls are having lots of trouble in getting HD to stay above $80. The stock has been trading in a $10 range for the past 6 months and if the indexes do have an 18% correction, likely to start in January, that the stock itself would likely break all support levels and probably correct down to around the $65 level, which would be an 18% correction as well.
By the same token, I must mention that the stock is showing a bullish wedge formation, built over the past 6 months that if broken (a rally above 82.27) would suggest a strong rally up to the $92 would occur. For this reason, the probability number on this trade is not high.
Sales of HD between 80.50 and 81.23 and using a stop loss at 82.37 and having an objective of $65 will offer an 8-1 risk/reward ratio.
My rating on the trade is a 2.75 (on a scale of 1-5 with 5 being the highest).
EPD Friday Closing Price - 62.10
EPD is a company that provides midstream energy services to producers and consumers of natural gas, natural gas liquids, crude oil, refined products, and petrochemicals in the United States and internationally. With oil prices expected to go down, companies associated with the industry are likely to go down as well, especially in the case of a company that has quadrupled in price since 2008 and that has shown an inability to continue the uptrend for the past 4 months.
After the last sideways phase that was seen between November 2010 and August 2011, EPD got into an uptrend will all previous highs made over the last 2 years being broken, until 4 weeks ago when the stock tested the previous high successfully for the first time during this period of time. It should also be mentioned that the retest of the intra-week high at 65.59 with a rally up to 64.76 has resulted in a double top being built on the weekly closing chart at 64.54/64.48. The double top has not yet had a successful retest of it but it is likely that is what the stock is in the process of doing right now.
EPD closed on the highs of the week on Friday, breaking above a minor intra-week resistance level at 62.35 and suggesting that further upside will be seen this week with 63.56, a spike high level of consequence seen in May, as the objective. Such a rally would likely become a second successful retest of the high as well as a needed retest of the double top.
To the upside, EPD will show resistance at the May spike high at 63.56, at the double top at 64.48/64.54, and at the all-time intra-week high at 65.59. To the downside, the stock shows support at the recent low of 60.57, and again at 59.13, at 57.65 and at 56.11. All of the supports mentioned were successful retests of the 200-day MA at the time. By the same token, the fact that the 200-day MA has been tested 4 times over the past 4 months with 3 of the retests failing to make new all-time highs, does suggest that the buying interest is waning and that the line is likely to be broken soon if nothing fundamentally positive occurs.
The chart of EPD does suggest that the stock will continue upward this week to the 63.56 level but that it is ready for the kind of trading action seen in 2010/2011 where the stock traded in an $8 trading range for 10 months. The downside objective could be the 100-week MA, currently at 55.00 or the spike low seen in June at 56.11. It should be mentioned that the 100-week MA has not been broken to the downside since it first got broken to the upside in August 2009. By the same token, a drop down to the $55 level will cause the stock to get close enough to the $50 level that could work as a magnet drawing the stock further down, especially if the indexes are in a strong corrective phase as I anticipate them to be at the beginning of the year. It is also important to note that the 200-week MA is currently at 47.50 and if the correction in this stock is like the correction expected to be seen in the indexes (about 18%), the 200-week MA will be a magnet as well.
Sales of EPD between 63.14 and 63.56 and using a stop loss at 64.86 and having a 55.00 objective, will offer a 5-1 risk/reward ratio.
My rating on the trade is a 3.75 (on a scale of 1-5 with 5 being the highest).
CAT Friday Closing Price - 82.88
CAT continues to show weakness in the face of a strong index market, having made a new 11-week low at 81.87 this past week. In addition, the stock now shows 11 lows made over the past 16 months between $78 and the $82 that strongly suggest will be broken before the bulls consider a rally of consequence.
CAT also generated a negative reversal this past week having gone above the previous week's high at 84.47 and then closing below the previous week's low at 83.00. In addition, the stock broke below the bottom of a bearish inverted flag formation that offers a downside objective of 77.70, which would effectively break the multiple lows seen between $78 and $82. It should also be mentioned that stock this past week tested successfully the gap area between 87.54 and 85.00 with a high this past week at 84.97, suggesting that all upside retests have been accomplished and that no further upside of consequence will be seen.
By the same token, CAT did close near the highs of the day on Friday and some upside is likely to be seen on Monday with the previous low daily close and bottom of the inverted flag formation that got broken at 83.40 as the mini rally objective.
To the upside, CAT shows a double high at 84.97/85.00 that is also where the gap is located that the bulls have been unable to break above for the past 21 days. A break of that level would suggest an attempt and likely success of closing the gap up at 87.54.
To the downside, CAT has a myriad of supporting levels at 81.46, at 81.35, at 80.85, and at 79.48, all spike lows seen in the past 12 months. Below 79.48, further support is found at 78.25, very minor at 76.51, and the nothing until strong support is found at the 3 year low at 67.54.
It should be mentioned that CAT has been on a downtrend since February 2012 in which the stock dropped from a high of 116.95 to 78.25. The subsequent rally up to 99.70 can be considered a long-term bearish inverted flag formation that if the bottom of the flag at 78.25 is broken would offer a 61.00 objective. With the CAT being a DOW stock and presently one of the weakest in the index, if an 18% correction is to occur over the next 4 months, the possibilities of the stock dropping down to the $60 level are viable.
Sales of CAT between 83.20 and 83.40 and using a stop loss at 85.35 and having a 61.00 objective will offer a 11-1 risk/reward ratio.
My rating on the trade is a 3.75 (on a scale of 1-5 with 5 being the highest).
I do want to give one more mention but since it is on a very high priced stock, it will not be a trade I am likely to do myself unless I decide to do options.
GOOG Friday Closing Price - 1031.89
GOOG has been on a tear to the upside as of late, having rallied over the past 7 weeks from 843.00 to 1049.00. The stock built a bullish flag formation over the past 4 weeks that got broken to the upside last week but the bulls failed to generate follow through and the stock ended up having a negative reversal week, having made a new all-time high and then closing in the red, suggesting that no further upside will be seen above the week's high at 1048.74. Should the bulls fail to turn the reversal around this coming week, it is likely that a round of profit taking will occur that could lead to a corrective phase.
The GOOG chart shows intra-week resistance at 1038.31, at 1040.57, and at 1041.52 that could be seen but should not be broken if the stock is to head lower. By the same token, the all-time high daily close is at 1036.24 and that level should not get broken to the upside on a daily close either.
Minor support in GOOG is found at last week's low at 1020.36, a bit stronger at the low seen on the 12th of this month at 1005.00, and lastly at the flag low at 995.79. Below 995.79 there is no support until the top of the gap area at 974.00 is reached. If the failure to follow through is confirmed this week with no new high being made, a drop down to test the gap between 886.90 and 974.00 would likely be seen. Any drop below 974.00 would likely take the stock to test the previous all-time high daily close at 923.00.
Sales of GOOG between Friday's closing price at 1031.89 and up to 1041.54 and using a stop loss at 1049.84 and having an objective of 923.00 will offer a 5-1 risk/reward ratio.
My rating on the trade is a 2.75 (on a scale of 1-5 with 5 being the highest).
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Updates
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| Updates on Held Stocks |
Closed Trades, Open Positions and Stop Loss Changes |
| AAPL had an uneventful red close week in spite of the rally in the indexes. Nonetheless, there is a good possibility the weakness was due to option expiration day on Friday where the $520 options were of the biggest interest. The stock generated a red weekly close but the stock closed in the middle of the week's trading range, suggesting the door is open for both the bulls and bears to generate some movement. The stock shows decent support between $512 and $514 and decent resistance between $529 and $531. With this coming week not likely to be very important, there is a decent chance the stock will explore the upside of the range. A break below or above the levels mentioned would likely be indicative. Probabilities are split 50-50 but could favor the bulls slightly due to the fact the indexes should see some upward movement at the beginning of the week. ARNA is likely to end up having a key reversal month with lower lows than last month and a close above last month's high. It should be noted that since its inception in the year 2000 the stock has never had a key reversal month, meaning that it is highly likely that the recent low at 4.05 is going to be a major low. It should also be noted that on the monthly chart, the stock has no resistance whatsoever until the 7.42-8.00 level is reached, suggesting that area will be reached this coming month. It should be noted that the bearish gap generated 9 weeks ago between 5.72 and 5.55 was closed this week, meaning all the negatives from the past 2 months have now been negated. Minor resistance is found between 6.00 and 6.20 but if broken, there is no resistance until the 100-week MA, currently at 6.75, is reached. Further resistance is found at the 200-day MA, currently at 7.00. Support should now be decent at 5.40. ELON had an uneventful week having gone down to support at 2.21 and then rallying back to close in the middle of the week's trading range. No support or resistance levels were broken and it seems the traders are waiting for a catalyst to go in one direction or the other. Neither the bulls nor the bears have an edge right now but I would have to believe that due to the 1-year base building action that has been seen that the probabilities favor the bulls slightly. A drop below 2.12 or a rally above 2.50 would be considered indicative. FCEL had an uneventful inside week in which the traders did nothing of consequence. The stock continues to trade "around" the 200-week MA, currently at 1.39, but no decision has been made. The probabilities favor the upside simply because the 200-week MA had not been touched for 5 years and now has been broken twice in the last 5 weeks. Decent support is now found at 1.31 and decent resistance at 1.57 and again at 1.64. FSLR generated the first red weekly close in the last 6 weeks and the second in the last 12 weeks. The stock did close near the lows of the week and further downside below last week's low at 59.69 is likely to be seen this week. Support is found at 59.69 and again between 57.57 and 58.13. Minor resistance is found at 62.39. Probabilities favor a drop down to the 58.13 level, followed with a rally likely up to the 64.20 level. Chart remains bullish overall but the stock could do some backing and filling for the next couple of weeks. INAP generated another red close this week but did close near the highs of the week suggesting the stock will go above last week's high at 7.15 this coming week. If that occurs, last week's low at 6.73 will be considered a successful retest of the previous low at 6.51, as well as a second retest of the 200-week MA, currently at 6.53. The stock did have a positive reversal on Thursday and confirmation of the reversal on Friday, suggesting the downside is over and that a rally at least up to the 7.27-7.32 level will be seen this week. A break below 6.74 would now be considered a negative, while a break above 7.50 a strong positive. KGC had a negative week having gone down 10% in value this past week, in conjunction with Gold dropping $100 in price. The stock closed on the lows of the week and further downside is expected to be seen with 4.59 as the objective. Since the August high at 6.23, the stock has been on a downtrend with each subsequent rally failing to go above a previous high. The stock has now built multiple bottoms between 4.55 and 4.59 that if broken would suggest a move down to the $4 level. On a positive note, for the past 5 months the bears have been unable to make a strong statement to the downside, below the 4.55 level, in spite of the fact that Gold has dropped close to $500 during that period of time. It does suggest some decent buying interest at these prices. OSK generated a red weekly close on the lows of the week, suggesting further downside will be seen this coming week. The stock got down to the 100-day MA on Friday, currently at 46.90, and was able to hold. Nonetheless, no strong buying interest was seen and it is likely the line will be broken, at least on an intra-week basis. Decent support is found at 45.66 but if broken the stock will likely get down to the very important support at 44.33, that if broken would likely take the stock down to the 200-day MA, currently at 43.00. A rally above Friday's high at 47.72 would be a positive and a rally above last week's high at 50.52 a much stronger positive. Probabilities favor further downside. VHC broke below the most recent low at 19.28 and closed near the lows of the week, suggesting further downside below last week's low at 18.80 will be seen this coming week. The stock did have a positive reversal day on Thursday but saw no follow through to the upside on Friday, meaning the reversal remains questionable. Support is found at 18.30 and more important at 17.52 that if broken would suggest new lows below 16.10 will be seen. A daily close below 18.07 would be as negative as a break below 17.52. The reversal seemed like a positive but Friday's action was a negative, especially with the indexes going higher, meaning that liquidation of the long positions on a rally should be considered on Monday unless the bulls can rally the stock above Thursday's high at 20.19. Probabilities do favor the stock getting down to at least the 18.30 level XOM generated a reversal week having made a new 6-year high and a red close. The stock closed in the bottom half of the week's trading range suggesting further downside below last week's low at 94.29 will be seen this week. Support is found at the gap area at 94.03. If the gap down at 93.42 is closed, a drop down to the next support level at 92.00 is likely to be seen. The stock did close on the highs of the day on Friday and the first course of action is likely to be to the upside, with 95.49-95.79 as the upside objective. A new all-time high above 96.12 would be a positive, while a close of the gap at 92.00 a negative. Probabilities slightly favor the bears inasmuch as the bulls have not been able to make new all-time highs in spite of the strong index market and all the positive fundamental information the company has received of late. YGE broke a bearish inverted flag formation this past week that has an objective of 4.00. The stock closed near the lows of the week and further downside is likely to be seen. Nonetheless, the inverted flag formation should have generated a stronger break this past week, but because it didn't the flag formation seems to have been "watered down", meaning there is a small chance that follow through to the downside will not be seen. The bulls must get the stock above Thursday's high at 5.74 to stimulate more buying, with 6.15 as the immediate objective thereafter. A rally like that would negate the bearish flag. A close below Wednesday's close at 5.41 would be a negative as it would also mean a break of the 100-day MA, currently at that price. A close below 5.41 would bring the 200-day MA, currently at 4.05, as the objective, which would also fulfill the inverted flag formation objective. It is evident this coming week will be very important for the stock with daily closes above 6.15 or below 5.41 as the determining factors.
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1) ELON - Averaged long at 6.593 (3 mentions). No stop loss at present. Stock closed on Friday at 2.31.
2) ARNA - Averaged long at 4.36 (2 mentions). Stock closed on Friday at 5.85.
3) FCEL - Averaged long at 1.34 (5 mentions). No stop loss at present. Stock closed on Friday at 1.38.
4) BIDU - Liquidated at 166.63. Purchased at 150.22. Profit on the trade of $1641 per 100 shares minus commissions.
5) KGC - Averaged long at 5.226 (3 mentions). No stop loss at present. Stock closed on Friday at 4.68.
6) VHC - Purchased at 19.20. Stop loss at 17.42. Stock closed on Friday at 19.25.
7) FSLR - Averaged long at 45.12. Stop loss now at 57.47. Stock closed on Friday at 60.35.
8) CVX - Shorted at 121.74. Averaged short at 120.91. Covered shorts at 121.99. Loss on the trade of $216 per 100 shares (2 mentions) plus commissions.
9) OSK - Purchased at 47.95. Averaged long at 48.14 (2 mentions. Stop loss at 45.44. Stock closed on Friday at 47.19.
10) JNJ - Covered shorts at 94.81. Shorted at 93.98. Loss on the trade of $93 per 100 shares plus commissions.
11) YGE - Purchased at 6.00. Averaged long at 6.225 (4 mentions). No stop loss at present. Stock closed on Friday at 5.54.
12) AAPL - Purchased at 515.90. Stop loss at 512.28. Stock closed on Friday at 519.80.
13) INAP - Purchased at 7.07. Stop loss now at 6.64. Stock closed on Friday at 7.10.
14) XOM - Averaged short at 91.125 (2 mentions). No stop loss at present. Stock closed on Friday at 95.01.
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The opinions and commentaries by Mr. De Vito are not a recommendation to buy or sell, but rather
a charting guideline, based on his own knowledge and experience, regarding the stocks he is following or
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