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Issue #380 
June 8, 2014 | Newsletter
The newsletter with chart analysis for stocks and stock indexes |
Stock Indexes Analysis/Evaluation
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| Exhaustion Run to the Upside?
DOW Friday closing price - 16924
This past week, the DOW generated the biggest 1-week weekly close gain in the past 7 weeks (207 points) and extended its foray into new all-time highs with the index now trading 2.7% (455 points) higher for the year above the close seen the last week of December. The rally gathered steam this past week when interest rates were lowered in Europe and the ISM Index and Jobs reports showed the economy maintaining some growth as well as unemployment in check.
The DOW closed on the highs of the week and further upside above last week's high at 16924 is likely to be seen. By the same token, the index is now approaching the next psychological resistance level of importance at 17000 and with the economy still a bit sluggish and the summer doldrums approaching, the probabilities continue to increase that some type of correction is about to be seen, especially since the market is now into the usually dependable "sell in May and go away" seasonal tendency.
It should be mentioned that in the DOW the previous 2 all-time highs seen in 2007 and 2014 both topped out by making a new all-time high a few months prior, correcting anywhere from 10-12% and then making a new all-time high between 1.7 and 3.3% above the previous high before embarking on a downtrend. With the index now having made a new all-time high in February, correcting 8% from that high and now trading 2.7% above the previous all-time high, it can be said that the index could be in a very similar topping out scenario much like what was seen in 2000 and 2007.
The fundamental news this past week from Europe was likely not sufficiently bullish to cause the DOW to start a sustained "new leg" upwards. The lowering of interest rates is seen as a "possible" positive but it is more speculative than tangible, meaning that it will be difficult to support rallies until actual results come out and those will take months to discern. The best that can be said about the U.S. reports that came out this week is that the economy continues to "muddle" forward but at a clip that does not support strongly higher prices at this time.
To the upside, the DOW only has psychological resistance at the 17000 demilitarized zone (16970-17030). To the downside, the DOW will now show some support at the previous all-time high daily and weekly close from December at 16576 and 16478 respectively. Further support is found around the 16300 level, having been down to that general area 3 times over the past 5 weeks (16312, 16357, and 16340). In addition, the 50 and 100 day MA's are both in that general area as well, suggesting that the traders it has become a pivot point that if broken would suggest the top is found. Further but minor support is found at 16240 and then the strong support at 16015/16046 that is considered a double low that if broken would likely bring in new selling.
With the DOW having no resistance above other than psychological, it is likely the traders will be watching what the NASDAQ does at this time with its resistance area between 4336 and 4371. The NASDAQ led the rally to the upside over the past 6 years and it is unlikely the DOW will continue much higher if the other index fails to resume the uptrend. It is expected that the DOW will get up to the 17000 demilitarized zone this week but the probabilities favor strong selling at that level and a likely red weekly close next Friday.
NASDAQ Friday closing price - 4321
The NASDAQ had a strong positive week having rallied 115 points from the week's lows and generating on Friday what could be end up being a runaway gap on the daily chart between 4299 and 4305. In addition, the index on Thursday broke above an indicative short-term resistance level at 4285, meaning that the bulls are now committed to resuming the uptrend above 4371 or generating a successful retest of the previous high (as in 2011) and beginning a strong correction or a downtrend.
The NASDAQ did close on the highs of the day/week and further upside above last week's high at 4322 is likely to be seen this week. Nonetheless, the index is now reaching a daily and weekly close resistance area between 4336 and 4359 where "unexpectedly" strong resistance was found back in March, which in turn suggests that convincing fundamental reasons are required to break above. Having stopped short of that area on Friday, in spite of the other indexes making new all-time highs after the fundamentally positive news that came out last week, does suggest the bulls will fail to resume the uptrend.
The NASDAQ is now accomplishing the same kind of rally as was seen in July 2011 when in May the index made a new multi-year high at 2887, corrected 10% over the following 7 weeks, and then rallied back up to 2879 (9 points below the previous high) before beginning a 20% correction. On this occasion, the index made a new multi-year high in March, corrected 10% in value over the following 8 weeks and now finds itself within 49 points off of the previous high at 4371 and in the same type of time frame that includes the "sell in May and go away" seasonal tendency. The pattern is extremely similar and does suggest this rally will fall short of making a new high and that a strong correction of 20% will then ensue.
To the upside, the NASDAQ will show intra-week resistance at 4344 and at the 14-year high at 4371. Nonetheless, on a weekly closing basis resistance will be found at 4336 and on a daily closing basis at 4359. With the weekly close still 1 week away, the probabilities do favor the index getting up somewhere close to 4359 before encountering strong selling interest.
To the downside, the NASDAQ will now show very minor but likely indicative support at 4305, which represents the runaway gap area between 4299 and 4305 that was generated on Friday. Closure of the runaway gap will make the breakaway gap between 4186 and 4204 a magnet for the traders that if closed would highly likely suggest that the high for this rally has been set. The 4207 level will also be considered support this coming week simply because it was last week's low and if broken would be a sign that the recent uptrend has ended. Should the gap be closed at 4186, the index shows minor intra-week support at 4131 and then nothing until 4035, which is important as the 200-day MA is currently at 4040. Strong intra-week support is found at the year's low at 3946 but any daily close below 3996 would likely mean the index is heading lower. It is important to note that there is a triple bottom on the daily closing chart at 3998, 3996, and 3999 that does suggest that at some point that level will be broken.
With the new all-time highs being made in the other 2 indexes and the NASDAQ having broken above 4285, the bulls are committed to making a new 14-year high or going "bust". Those are the stakes facing the traders this week. It should be mentioned that there will be no catalytic reports due out for another month, either here in the U.S. or in Europe where their problems were also addressed this past week, meaning that the bulls must keep the rally going mainly on momentum and that may be difficult to achieve since momentum this past year has not been highly successful in accomplishing much higher prices, especially in the NASDAQ.
The probabilities favor the NASDAQ repeating the 2011 pattern with the high of this rally being seen this coming week.
SPX Friday closing price - 1949
The SPX made yet another new all-time intra-week and weekly closing high and with the index closing on the highs of the day/week on Friday, further upside above last week's high at 1949 is expected to be seen. With no resistance above, the bulls will be trying to take the index up to the 2000 level, which must be considered a strong psychological target as well as resistance.
The SPX has now accelerated its rally as this past week the index got above the top of a 3 point uptrend channel line at 1925, likely meaning that either a new leg up in the uptrend is occurring or the index is beginning to generate an exhaustion top from which either a major correction or a downtrend will occur.
It should be mentioned that on the 2 previous all-time highs in 2000 and 2007 the SPX stopped short of reaching the next "psychological" resistance level, having gone up to 1555 in the year 2000 and 1576 in the year 2007. It should also be mentioned that 1970 is the level from which a 20% correction would take the index back down to test the previous all-time high at 1576, suggesting that is the objective for this rally. Having rallied 23 points this past week above last week's close, the 1970 level is certainly reachable this coming week from the close at 1949.
To the upside, the SPX has no resistance above other than psychological at the 2000 demilitarized zone (1970-2030). To the downside, last week's low at 1915 has to be considered minor support this week because if broken it would likely mean selling of consequence has been found. The next support below 1915 is found at the 1900 demilitarized zone as 2 previous highs of some consequence are found at 1897 and at 1902. If 1897 is broken, the next support found is at 1862 and at 1850 that if broken would give a sell signal. Important support is found at 1814 that does include the 200-day MA, currently at 1804.
The SPX has been on a tear as of late, having generated green daily closes on 11 of the last 13 days and all 13 days showing higher lows than the previous day. Such a rally does suggest that an exhaustion run is occurring and that when it stops that a major top will be found. With the index now being in the middle of the seasonal tendency for a strong correction to occur, as well as in a time frame where buying interest is generally low, it seems almost impossible to think that the bulls will have any success in getting above such a major psychological resistance as 2000 is considered to be.
Expect the SPX to move higher intra-week but see selling interest appear as the end of the week approaches.
DOW and the SPX are now near levels of strong psychological resistance and the NASDAQ seemingly mimicking the action seen in the "sell in May and go away" period of 2011 where the previous multi-year high was tested successfully and a 20% correction then occurred, suggesting that this coming week the indexes could begin to turn around.
There are no economic reports scheduled this week and nothing of consequence expected to come out from Europe where they addressed their economic woes this past week by lowering interest rates to below zero. As such, the traders are facing a period where the indexes are strongly overbought, normally experience a correction, and without tangible news that could extend the rally. It is likely be a pivotal week.
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Stock Analysis/Evaluation
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CHART Outlooks
The indexes continued to run but upside objectives are starting to be reached, suggesting that the market could be ready to find a top and initiate the "sell in May and go away" adage. Further upside is expected to be seen this week but it could be the last "hurrah" before a strong correction begins.
All mentions will be sales this week as the risk/reward ratios are now excellent for short positions and the probability ratings have increased slightly.
SALES
CAT Friday Closing Price - 108.18
CAT is a stock that "languished" between $80 and $90 for a period of 10 months and with a chart pattern that suggested at the time that the stock would more likely break than rally. Nonetheless, the strength in the index market helped the bulls change the chart outlook when the stock broke above the $90 level and the possibilities are high that the rally up to the recent high at 108.21 has been mostly technical in nature (stop losses hit and momentum) as the fundamental picture has not truly supported the stock trading rallying 32% in value over the past 7 months. Nonetheless, the stock is now nearing levels of all-time resistance between $112 and $117 that are not likely to be broken without some strong positive fundamental changes and/or further and aggressive upside in the index market.
CAT generated a strong rally this past week after the $100 level breakout was retested successfully 3 weeks ago. The stock closed on the highs of the week and only 3 points below the previous high at 108.21, suggesting that further upside will be seen with 109.77 as the first objective and quite possibly as high as the high seen in July 2011 at 112.65.
The probabilities of CAT making new all-time highs is extremely low as the stock has been up above the $116 level on 2 occasions (2011 and 2012) and on both occasions the stock encountered strong selling, having dropped all the way down to 67.54 the first time and to 79.25 the second time and both within the "sell in May and go away" period.
To the upside, CAT shows minor intra-week resistance at 109.77 that is considered the most "recent" resistance but not one that is likely to stop the stock from rallying higher unless the indexes start their correction immediately. Further and stronger resistance is found at 112.65 which is a successful retest-of-the-previous-all-time-high seen in July 2011 and that is most likely to be reached but unlikely to be broken.
To the downside and on the weekly chart, CAT shows decent and likely indicative support at the $100 demilitarized zone (99.70-100.30) and then nothing until the June 2011 low at 94.20. Further support will be found at the 200-week MA, currently at 91.95. On a shorter term basis and using the daily chart, support is found between 103.25 and 103.75 that does include the 50-day MA, currently at 103.55, and that has been a decent support line for the past 7 months.
Sales of CAT between 109.70 and 110.41 and using a stop loss at 112.75 and having an objective of at least 94.40 will offer a 4-1 risk/reward ratio.
My rating on the trade is a 3.75 (on a scale of 1-5 with 5 being the highest).
DOW Friday Closing Price - 53.01
Three weeks ago, the DOW broke out of a 3-month sideways trading range between $47 and $51 and now the stock seems to be on its way to test the all-time high at 56.75. The stock closed on the highs of the week last week and further upside above last week's high at 53.15 is expected to be seen. With no resistance at all until the all-time high weekly close at 56.42 is reached, the possibilities are high that the stock will run up an additional $3 to the upside this week since the stock has been averaging trading ranges of over $2 for the past 12 weeks and already has seen 2 weeks where the stock generated a $3+ trading range.
The DOW should not be considered as an aspirant for new all-time highs being made as it was one of the 3 stocks that 2 months ago were featured in an article that came out on Yahoo finance as being prime fundamental candidates for a downtrend. As such, any rally near the all-time highs should be considered strongly for a short position.
To the upside, the DOW shows no resistance until the all-time high weekly close at 56.42 is reached, Further resistance is found at the all-time intra-week high at 56.75. To the downside, the stock shows minor support at 51.83 and then nothing until the $50 demilitarized zone is reached. Further support is found at 48.12, which does include the 100-day MA, currently at 48.30, that has not been broken to the downside for the last 11 months. Strong support is found at the only correction low seen in the last 12 months at 46.56. A break of that support would open the door for a drop down to the 200-week MA, currently at 35.00.
The DOW is a stock that over the past 9 years has seen huge shifts in price, having been as high at 56.75 and as low as 5.89 at the height of the last recession. By the same token, it is also a stock that has also shown a strong tendency over those same 9 years to trade in $20 trading ranges that usually last anywhere from 1-2 years, suggesting that if the stock fails to make a new all-time high that the downside objective could easily be the 200-week MA, currently at 35.00.
Sales of DOW between 55.14 and 56.42 and using a stop loss at 57.35 and having an objective of 35.00 will offer a 10-1 risk/reward ratio.
My rating on the trade is a 3.75 (on a scale of 1-5 with 5 being the highest).
OXY Friday Closing Price - 100.38
OXY shows an indicative 6 months period between 2011 and 2012 that can be used now to trade the stock. During that time, the stock made an important low at 66.36 and an important high at 106.68. The 66.36 low was the bottom of the corrective period seen in the indexes from May to October and the 106.68 high was an important and successful retest of the 2 previous highs before that at 109.08 and the all-time high at 117.88.
Since that low in October 2011, OXY has been in a clearly defined multi-point uptrend channel line having rallied to the top of the channel line on 4 occasions and to the bottom of the channel line of 4 occasions as well, meaning that the channel is dependable. The channel consists of a trading range of about $15-$19 between each high and low, also meaning that there is good profit to be made. The top of the channel line is presently at 103.50 and with the important February 2012 high at 106.68, the stock offers a high probability and limited risk trade with a good risk/reward ratio when using the bottom of the channel line, presently at 88.00 as the downside objective. By the same token, the stock corrected 44% in the May to October 2011 period, suggesting that if the same kind of correction is to occur this year, that the downside objective would be $57.
OXY closed on the highs of the day/week on Friday and further upside is likely to be seen with the top of the channel line at 103.50 as the main objective. Nonetheless, the stock does show a minor to perhaps decent intra-week resistance at 101.65 that could stop the rally if the indexes show some weakness, meaning that the desired entry point will be 103.50 but if the action suggests a lower entry point into the trade, the 101.65 level will be considered. Either way, the 106.68 level is not likely to get broken unless the indexes continue aggressively to the upside.
To the downside, the closest support OXY shown is at 93.80 but that support is considered minor. Decent support is found at 91.20 that includes the 200-day MA, currently at 90.80. By the same token, the 200-week MA has been shredded consistently on both sides over the past 3 years, suggesting it will not work as an important support line at this time. Important and decent to strong support is found at the most recent spike low seen in February at 85.90, which is lower than the objective of the trade at 88.00. Nonetheless, the 85.90 support is pivotal because if broken, a drop down to the $57 level could become a real possibility.
OXY has traded the channel consistently over the past 3 years and that is all this mention expects to see. By the same token, if a major correction as not seen since 2011 is to occur, the trade could turn out to be a home run.
Sales of OXY between 103.25 and 103.50 and using a stop loss at 106.78 and having a downside objective of 88.00 will offer a 4-1 risk/reward ratio. Even if an entry point at 101.65 is chosen, the risk/reward ratio will still be 3.3-1.
My rating on the trade is a 4 (on a scale of 1-5 with 5 being the highest).
NFLX Friday Closing Price - 430.13
NFLX got on a monster run to the upside between September 2012 and February 2014 in which the stock increased in value some 800% from a low of 53.05 to a high of 458.00. Much of the rally was fundamental in nature due to some strong positive changes to the company but some of it was technical in nature due to short-covering and frenzied buying. The true value of the company may have come into view recently when after the most recent earnings report the stock fell 35% in value from $458 down to $300.
As with the NASDAQ, NFLX had not retested its previous high, meaning that this rally that has now taken the stock back above the $430 level could end up being simply the retest of the high that has been technically required in both the index and the stock before a stronger correction can occur. With the stock closing near the highs of the week and having high probabilities of getting above last week's high at 434.89, it does open the door for a short position to be instituted that offers a good risk/reward ratio and decent probability rating.
To the upside, NFLX shows minor resistance between 439.39 and 441.24 and then nothing of consequence until the all-time high daily close at 454.98 is reached. Nonetheless, on the weekly closing chart, resistance will be decent at the all-time high weekly close at 448.37. To the downside, the stock shows minor support at 425.01 that should hold up if the stock is to go higher this week. Below 425.01 there is no support on the chart until a previous high of consequence at 383.43 is reached but that previous high also includes the 100-day MA, currently at 385.80, giving that level additional strength. Further support is found at 352.00 that also includes the 50 and 200-day MA's, both currently around 358.25. Nonetheless, the weekly chart does suggest the stock will get down to at least 319.07 if no new all-time highs are made. The 319.07 level will be the objective of this mention.
NFLX started to see some selling coming in on Friday since the stock, unlike the indexes, did not close "on" the highs of the day/week. In fact, the stock closed near the lows of the day, suggesting the first course of action for the week will be to the downside, with 425.01 as the likely objective. Nonetheless, the probabilities still favor the stock heading higher above the week's high at 434.89 and likely getting up to the $440 level where short positions can start to be considered.
Sales of NFLX between $439.38 and 448.37 and using a stop loss at 458.35 and having a 319.07 objective will offer a 5-1 risk/reward ratio.
My rating on the trade is a 3 (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 |
| CVX generated a rally and a green weekly close this past week and in the process got above a minor but short-term indicative resistance at 123.99 that suggests the stock is on its way to retest the double top at 127.83/127.27 and in the process to close the bearish gap between 125.76 and 125.50 that was seen on May 15th. The stock closed in the upper half of the week's trading range, meaning that last week's high at 124.70 is likely to be broken with an objective of getting up to the resistance area found between 125.32 and 125.65. Further resistance is found at 126.78 that if broken could cause a new all-time high to occur. If the rally up to 125.32/125.65 occurs but the gap at 125.76 is not closed, it would be considered a strong negative. Indicative support is now found at 123.58 that if broken would likely take the stock down to 122.24. A break below the recent low at 121.65 would likely take the stock down to the 200-day MA, currently at 120.00. Probabilities favor the stock moving up this week to 125.32/125.65 but failing at that level and the recent downtrend resuming. DD made yet another new 14-year weekly closing high on Friday but the stock has started to see selling come in over the past 6 days, inasmuch as the stock has only moved 33 points higher (.005%) during this period of time in spite of the fact that the index it trades in (NYSE) has moved up 1.2% over the same period of time. Nonetheless, the stock did close on the highs of the week and further upside above 69.71 is likely to be seen this week with the top of the $70 demilitarized zone at 70.30 as a possible upside objective. It is important to note that in August 1997 the stock generated an intra-month high at 69.75 and for the past 2 months the stock has not yet been able to get above that level even though last month's high was 69.38 and so far this month it has been 69.71. By the same token, the probabilities do favor that level getting broken this week and if the bulls are able to get the stock above the top of the $70 demilitarized zone, the stock is still likely to get up to the original desired entry point mentioned last week at 72.00. Support is now found at 68.54 that if broken would suggest further downside down to at least 66.70. A break below last month's low at 66.32 would be a strongly negative sign, also suggesting a top to this rally has occurred. ELON was unable to build on the previous week's spike rally and did generate a red weekly close and below the previous week's low at 2.50, totally negating the rally the week before. The stock closed on the lows of the week and further downside below last week's low at 2.44 is likely to be seen. Support is found at 2.38 but it is now a support that if broken would likely generate new selling and a new retest of the long-term support at 2.00. The bulls have not been able to generate any new buying interest in spite of the better than expected earnings report 2 weeks ago and the chart is now heavily-weighted toward the downside. If 2.38 is broken, consideration should be given to liquidating the long positions as it is unlikely the stock will be moving higher during the summer doldrums if that happens. Friday's high at 2.57 is now pivotal resistance that if broken could bring about renewed buying interest. Probabilities favor the downside. FCEL had a volatile week after the company reported earnings on Tuesday evening and they were lower than expected. The stock gapped down on Wednesday morning and promptly fell down to the important support at 2.00 with a drop down to 2.01. Nonetheless, buying interest was found at that level and by Friday the gap was closed and in the process the bulls were able to close the stock slightly above the midway point of the week's trading range, suggesting that last week's high and low at 2.01 and at 2.47 will likely be important support and resistance for this week. The fact the stock closed below 2.31 on Friday and generated a red daily close on Friday, making Thursday's close at 2.30 a successful retest of the 50-day MA, does give the bears a slight edge for this week. By the same token, closure of the gap created after the earnings report also suggests that there is decent buying interest at the $2 level, meaning that the probabilities favor the stock trading sideways for this week while the overall market determines what it is going to do. Resistance is found at 2.48 and support at 2.00. A break of either level will likely generate further movement in that direction. GIGM had an uneventful inside week but did close in the red and near the lows of the week, suggesting the first course of action for the week will be to the downside and below last week's low at 1.06. Support is found at 1.03 and then stronger at 1.00 but a drop back down to 1.00 would create a multiple-low scenario that would be bearish for the stock. To the upside, the 1.13 level continues to be short-term resistance and stronger at 1.20. Probabilities continue to favor the stock trading uneventfully, likely between 1.03 and 1.11 for this week. LINE made a new 11-week high and did close on the highs of the week, suggesting that further upside above last week's high at 30.10 will be seen this week. No resistance of consequence is found above the top of the $30 demilitarized zone (30.30) until the 31.45/31.83 level is reached. The 100-day MA is currently at 30.20 and on a daily closing basis that line is likely to be important this week. The shorts should have been liquidated on Friday when the stock got above 29.30 but with the indexes likely to get into a correction, adding shorts this week could be the intelligent thing to do since the stock has shown a strong inability to rally for the past 3 months. Support on a daily closing basis will be found at the 200-day MA, currently at 29.25, and further and more pivotal support is found at 28.75. Probabilities slightly favor the bulls this week with the big question mark being "how high will this rally take the stock". If the stock is unable to close above the 30.30 level any day this week, selling is likely to be seen by next Friday. MELI had an inside week, meaning that nothing of consequence was resolved in either direction. Nonetheless, the stock did close in the green, in the upper half of the week's trading range, and more importantly above the 200-week MA, currently at 87.70, suggesting that the action was more bullish than bearish and on a stock that has been under strong selling pressure for the last 8 months, the action has to be considered a decent positive. The stock did fail on Friday to get above the high seen at 90.51 that came after the upgrade was given the previous week and the first course of action for the week is likely to be to the downside, with 85.01 as a potential downside target. Nonetheless, the close above the 200-week MA was a positive and it is likely that next Friday that level will be seen again and if the bulls can close next Friday above Friday's close at 88.12. the probabilities will begin to support a rally up to the upgrade objective of $104. Once again I would like to remind everyone that the stock is NOT sensitive to the index market. Any drop below 83.06 would be considered a negative. SINA may have had an important week having made a new 2-week low but then closing in the green and near the highs of the week, suggesting that further upside above last week's high at 45.59 will be seen this week. If the bulls are able to accomplish that rally, last week's low at 43.40 will become a successful retest of the 42.40 low seen 3 weeks ago, suggesting that a low to this downtrend may have been found. On a negative note though, the green weekly close was only by 1 point and that is not enough of a positive on the weekly closing chart to say that the stock has turned around. The stock needs to close above 46.26 (on a weekly closing basis) to generate any short-covering interest. Any drop below 42.40 would now be considered a strong negative. Probabilities very slightly favor the bulls. STZ generated a red weekly close on Friday, making the previous week's close at 84.13 into a double top when using the previous all-time high weekly close at 84.33 seen the last week of March. The stock also failed to go above the previous week's intra-week high at 84.32 in spite of the fact the stock closed near the highs of the week and the indexes had strong follow through this week, meaning that the stock received specific selling interest at these levels. In addition, the previous week's high at 84.32 is now also considered a successful retest of the all-time intra-week high at 85.91, also meaning that not only a double top on the weekly closing chart is now in place but a successful retest of the first high has also been accomplished. Minor but likely indicative support is found at 81.67 that if broken on a daily closing basis would mean the 50-day MA will have been broken as well. Further support is found at 80.85 and then nothing until 78.49. It should be mentioned that the 100-day MA, currently at 80.90, has not been broken for 2 years though it has now been tested successfully on 4 occasions during the past 12 months. Any close below the line is likely to be indicative that not only a top has been found but that the stock is heading lower. A rally above 84.32, and especially a weekly close above 84.33, would be a strong positive. WDC generated a new all-time high weekly close on Friday, above the previous one at 91.05 made on April 14th. The stock did close near the highs of the week and further upside above last week's high at 92.31 is likely to be seen. Intra-week resistance is found at 92.75 and stronger at 95.00. The stock generated a spike up rally on the weekly chart but on Friday the stock started to find some selling resistance as the stock closed on the highs of the week on Thursday, likely after hitting stop loss orders above 90.44, but the bulls failed to generate much buying on Friday as the stock only moved up 20 points above Thursday's high, suggesting that the new weekly closing high may only be "window dressing" as the last 2 intra-week highs at 92.75 and 95.00 were not broken. A break above 92.75 is likely to generate additional buying and a test of the 95.00 level. Any daily close below the $90 demilitarized zone would weaken the chart and a daily close below 88.17 would be a decent sell signal. Probabilities favor the bulls but only slightly.
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1) ELON - Averaged long at 5.534 (4 mentions). No stop loss at present. Stock closed on Friday at 2.44.
2) ARNA - Liquidated at 6.19. Purchased at 6.50. Loss on the trade of $31 per 100 shares plus commissions.
3) FCEL - Averaged long at 2.276 (3 mentions). No stop loss at this time. Stock closed on Friday at 2.26
4) EBAY - Liquidated at 50.36. Purchased at 51.81. Loss on the trade of $145 per 100 shares plus commissions.
5) MELI - Averaged long at 82.85 (3 mentions). No stop loss at present. Stock closed on Friday at 88.12.
6) LINE - Shorted at 28.75. No stop loss at present. Stock closed on Friday at 30.06.
7) GIGM - Averaged long at 1.225 (2 mentions). No stop loss at present. Stock closed on Friday at 1.08.
8) DD - Shorted at 69.56. Stop loss at 74.35. Stock closed on Friday at 69.67.
9) CVX - Shorted at 126.40. Stop loss at 127.93. Stock closed on Friday at 124.19.
10) WDC - Shorted at 90.10 and at 92.24. Averaged short at 91.17 (2 mentions) Mental stop loss at 92.85. Stock closed on Friday at 92.16.
11) STZ - Shorted at 83.96. Stop loss at 86.01. Stock closed on Friday at 82.99.
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Encyclopedia of Chart Patterns. A must have for chart aficionados! |
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
that are brought to him by others. Mr. De Vito does not presently offer a track record of his trading experiences.
No inference of success and/or failure should be assumed. The
information enclosed above, regarding his background, length of trading, and experience, is correct
but is not meant to suggest, state, or infer any future success in trading, based on his opinions. The information herewith included should only be used by investors who are aware of the risk inherent in securities trading. Mr. De Vito accepts no liability whatsoever for any loss arising from any use of the information and/or comments he supplies. |
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