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Issue #838 
December 3, 2023 , | Newsletter
The newsletter with chart analysis for stocks and stock indexes |
Stock Indexes Analysis/Evaluation
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| Bulls in control. Seasonal tendency continues to be seen.
DOW Friday Closing Price - 36245
SPX Friday Closing Price - 4594
NASDAQ Friday Closing Price - 15997
RUT Friday Closing Price - 1862
The indexes continued higher with the RUT leading the way. The RUT was up 3% while the DOW was up 2.6%, the SPX was up .8% and the NASDAQ was up .004%. It is significant that the RUT was the leader as it usually is the index that leads near the end of a bull run. By the same token, it also means that the rally has legs (is dependable), given that traders do not get into small cap stocks (which are by nature volatile) unless they feel confident that the market will continue higher.
With the exception of the NASDAQ, the indexes all closed on the highs of the week, suggesting further upside above last week's highs (36264, 4599, and 1963 respectively) will be seen this week. The NASDAQ closed in the middle of the week's trading range suggesting equal chances of going above last week's high at 16166 or going below last week's low at 15825. This week, the DOW and the RUT will be the indexes to watch. The former is 93 points below the all-time weekly closing high at 16338 and the latter is just 13 points below the 200-week MA. Both should accomplish breaking those levels this week. The SPX did close above a pivotal weekly closing resistance at 4582 and the bulls need to confirm that break. It is possible that the NASDAQ generates a red week, given that 4 weeks ago, the index generated its break of a pivotal weekly close resistance level at 15750 and that level could be tested this week.
In looking at all the above chart pictures, I would venture to say that this coming week is likely to be mixed and limited. The Jobs report comes out on Friday and the traders are not likely going to be aggressive in either direction until that information comes out. As such, for the first 4 days of the week, the action is likely to be chart oriented and then on Friday, and depending on what the report shows, once again the charts will be the deciding factor.
In looking at the daily chart, the DOW could get up as high as 36513 but will encounter selling there. Potential low during this time could be 35611. The SPX is likely to encounter some selling around 4637 and should find support at 4582. The NASDAQ could find some resistance at 16119 and if it cannot get above that level, it could drop as low at 15508. The RUT will find resistance at 1906 and should find support at 1818. I give you these numbers just so that you are aware of them, as they could be reached on an intraweek basis and still mean nothing to the overall picture. Nonetheless and overall, the potential downside levels are not likely to be reached given the positive feeling that is being felt in the market at this time.
The most important of the indexes to watch this week is actually the RUT as it is still considered depressed and with what the other indexes did this week, and the fact the RUT outperformed them, it should continue the same this week. The index should get up to the 1900 level and should not get below 1818. That is what should be watched closely this week. A break of either would be indicative.
OIL generated a negative reversal week, having gone above the previous week's high but then closing red and on the low of the week, suggesting further downside below last week's low at 73.93 will be seen this week. Oil rallied at the beginning of the week under the idea that OPEC would cut production in order to keep prices up. OPEC did cut production at Thursday's meeting but evidently not enough (or not convincingly) and Oil reversed and ended up the week on a weak note. The cut in production is likely to prevent any big move to the downside but the chart does suggest that an intraweek drop down to the $70 demilitarized zone (69.70-70.30) is likely to be seen. There is recent as well as established support at 72.27 that could hold up but the failure to rally at least up to 81.50 this past week, does suggest that support level will not hold up. On the other side of the coin and on a weekly closing basis, somewhat (not strong) pivotal support is found at 72.67, which should hold up. Based on this chart outlook, if it does happen as stated above, the $80 demilitarized zone would become the upside objective. Nonetheless, going above that level in the near future, will require a positive fundamental change. As such, Oil is likely to trade between $70 and $80 for the month of December.
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Stock Analysis/Evaluation
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CHART Outlooks
Small Cap stocks are the ones that can be considered to purchase at this time but only if they are still depressed but show a bottom formation is in place. I have one new buy mention this week but I also suggested that one of the presently held stocks (LXRX) can be added positions to (see below in the held stocks comments). Additionally, MRNA chart does suggest further upside is coming and with so much open air above, it too can be considered for addition positions (see both of these below in the Held Stocks comments area).
GCI Friday Closing Price - 1.93
GCI is in the media and marketing industry and it is a stock that got up to an all-time high in 2015 at 25.70. It then started a downtrend that ended on April 2020 at .63 cents. During the past 3+ years, the stock has been building a bottom that has now been built, suggesting the stock is ready to start a short-term uptrend, especially if the small caps industry starts to move higher.
Fronm a chart point of view, GCI now shows 2 previous confirmed successful retests of the .63 cent low with drops down to 1.26 on September 2022 and a drop down to 1.62 on April of this year. 5 weeks ago, the stock dropped down to 1.66 but the bears have not been successful in taking it lower since then, having rallied to 2.09 2 weeks ago. The stock went below the previous week's low last week but then rallied to close in the middle of the week's trading range, suggesting equal chances of going below last week's low at 1.83 as above last week's high at 2.04. If the latter occurs and the stock gets above the 2.09 level, a new buy signal will be given that should cause the bulls to jump in.
The monthly chart of GCI does suggest that the 4.00 level is a viable objective, meaning a doubling in price. Nonetheless, the 200-week MA is curently at 3.31 and reaching that level will be the objective of this mention.
Under the present scenario, the stop loss should be at 1.60 and if the stock is purchased at Friday's closing price, it would mean a $.33 cent per share risk. With 3.31 as the objective, that would mean mean a 4.2-1 risk/reward ratio. Then again, if you want a bit more assurance of success, you could wait for the breakout agove 2.09 to occur before buying. In that case, the stop loss can be placed at 1.70, meaning that the profit potential would be $120 for a risk of 40, which would make it a 3-1 risk/reward ratio. The former offers a rating of 3 while the latter offer a rating of 3.73 (on a scale of 1-5 with 5 being the highest). Your choice as to which of the two to do. I do want to mention that the longer term picture does offer a 6.30 objective, to be reached in a period of 9-12 months.
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Updates
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| Monthly & Yearly Portfolio Results
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Closed Trades, Open Positions and Stop Loss Changes
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Status of account for 2007: Profit of $9,758 per 100 shares after losses and commissions were subtracted. Status of account for 2023, as of 11/1 Profit of $10,168 using 100 shares per mention (after commissions & losses) Closed out profitable trades for November per 100 shares per mention (after commission)
NONE
Closed positions with increase in equity above last months close minus commissions. XOM (long)$49 Total Profit for November, per 100 shares and after commissions $49 Closed out losing trades for November per 100 shares of each mention (including commission)
OXY (long) $11
Closed positions with decrease in equity below last months close plus commissions. OXY (long) $50 Total Loss for November, per 100 shares, including commissions $61 Open positions in profit per 100 shares per mention as of 12/1
MRNA (long) $1414
Open positions with increase in equity above last months close.
VWDRY (long) $606 Total $5613 Open positions in loss per 100 shares per mention as of 12/1
NONE
Open positions with decrease in equity below last months close.
SNDL (long) $3 Total $33 Status of trades for month of November per 100 shares on each mention after losses subtracted.
Profit of $5,568
Status of account/portfolio for 2023, as of 11/30
Profit of $15,736 per 100 shares.
CPRT generated a negative reversal week, having gone above the previous week's high and then going below the previous week's low and closing red. The stock closed in the lower half of the week's trading range, suggesting further downside below last week's low at 49.55 will be seen this week. If that does occur, last week's high at 51.50 will become a successful retest of the all-time high at 51.53. Under normal circumstances, the action seen this week would suggest that a retest of the weekly close breakout at 46.82 had started. Nonetheless, with the index market going higher and the stock at new all-time highs, it does not make sense to think that at "this time" a retest of that level is occurring. On a negative note (and probably the reason the stock fell this past week), a fundamental study came out on Wednesday that suggests the company is overvalued (compared to its competitors) and that a retest of the previous all-time high is occurring. As such, consideration can be given to taking profits this coming week. The 10-minute chart suggests that a rally back up to 50.26 (and perhaps as high as 50.50) might be seen on Monday. Any rally above 50.72 would probably mean higher prices are to be seen.
ENG announced a reverse split of 1-8, meaning that the stock, having closed on Friday at 1.90, was actually closing at .235 on its original price. The reverse split is seen as a negative as it allows traders to short the stock more easily and cause it to have more reason to fall (chart-wise). Having said that, the stock did generate a new all-time intraweek and weekly closing low and a close on the low of the week, suggesting further downside below last week's low at 1.76 (.22 on the old price) will be seen this week. Using the new price, a close above 2.00 would take some of the sell pressure off and a close above 2.40 would give the edge to the bulls. There is no support below, meaning nothing where the bulls could enter to defend against further downside. INTC generated a negative reversal week, having made a new 7-month intraweek high and then going below the previous week's low and closing in the lower half of the week's trading range, suggesting further downside below last week's low at 42.86 will be seen this week. The negative reversal came because the stock got up to the 200-week MA, currently at 45.33, having gotten up to 45.34 this week. The 200-week MA is a resistance line that represents the long term view and usually in order for the bulls to break such a line, new and positive fundamental news is needed, or the help from the index market in having the market heading higher. With the indexes not likely to generate much further upside this week (until after the Jobs report comes out), it is likely the stock will move lower this week. Intraweek support is found at 40.31 that should hold up, followed by another retest of the MA line, before any other decision is made. This suggests the stock will trade between $40 and $45 for the next week or two (or maybe even longer). The monthly closing chart does suggest that taking profits on the stock should be considered at this time. In addition, there was a report that came out on Friday, saying that the competition in the industry is going to be fierce at this time and at the price the stock is at. The monthly chart suggests the stock could fall all the way back down to the 37.86 level. As such, I will be looking to take profits on the stock this week, unless the stock can get above 45.35 on Monday. LXRX generated a positive reversal week this past week, having gone below the previous week's low and then closing green and on the high of the week, suggesting further upside above last week's high at 1.16 will be seen this week. If that does occur, last week's low at 1.04 will become the required/necessary retest of the recent all-time low at .92 and suggest that a bottom has been built and retested successfully. An intraweek rally above 1.26 would then confirm the formation is in place. If that occurs, a rally above 1.51 would give short-term control to the bulls. With the small cap stocks index (RUT) seemingly seeing a lot of new buying, it is probable that this stock will get a good portion of that. The upside objective for the month of December could be as high as the 200-day MA, currently at 1.99. As such, consideration can be given to purchasing additional shares of the stock, using a .96 stop loss. Such a stop loss and objective for the month, would offer a 4-1 risk/reward ratio if purchased at Friday's closing price. MRNA generated a positive reversal week, having gone below the previous week's low and the closing green and then closing near the high of the week, suggesting further upside above last week's high at 80.89 will be seen this week. If that does occur, last week's low at 74.50 will become the needed/required retest of the previous 18-month low at 62.55. If then, the bulls are above to get above the previous week's high at 81.12, a rally of consequence would likely occur as there is open air above to 96.41 before any established resistance is found. If that does occur, consideration can be given to adding positions at 81.15, using a daily close stop loss at 77.14 and having a 96.41 objective. Such a trade would offer a risk of $401, a profit potential of $1526 per 100 shares, meaning a risk/reward ratio of 3.8-1. NEM generated a new 4-month daily and weekly closing high and closed on the high of the week, suggesting further upside above last week's high at 41.30 will be seen this week. Both a buy signal for the bulls "and" a failure signal against the bears were given, having closed above the 4-month high daily close at 40.95, above the high weekly close at 40.74 and above the low weekly close at 40.68 (closed at 41.20 on Friday). This buy signal was also confirmed with Gold generating a breakout. The 200-day MA is currently at 42.33 and should be seen this week. Nonetheless, on an intraweek basis, there is no resistance until 43.92 is reached. It seems that could be the objective high for this coming week. There is minor to decent weekly close resistance between 43.71 and 43.82 that seems unlikely to be broken at this time. Upon reaching that level, a pullback to just under $41 should then ensue in the following 2-3 weeks. After that, the next pivotal resistance is found at 44.98, which if broken would open the door for the stock to possibly rally as high as the 200-week MA, currently at 55.32. If that is to happen, it would probably take 6-10 months to get there. Any daily close now below 40.19 would weaken the chart for the short-term and any daily close below 38.66 would give back the edge to the bears. PLNH generated and inside week but a green weekly close and on the high of the week, suggesting further upside above last week's high at .76 will be seen this week. The stock had closed near the low of the week the previous week but the bears were unable to generate any follow through to the downside. In looking at the daily chart, the bulls did have success, given that on the past 5 trading days, the stock traded at, slightly below, and above the 200-day MA and closed on it twice but never was the line broken. On Friday, the stock did generate a new (though minor) buy signal, having closed above the previous 5-day high close at .75 (closed at .76 on Friday), suggesting that line has not been tested successfully and that the stock will rally from here. This action is also supported by the RUT small cap index that seems to be rallying from here now. Any intraweek move above .79 would confirm the successful retest of the MA and generate new buying interest. Pivotal intraweek resistance is found at .93, which if broken would suggest the bulls have gained the edge. Any weekly close above 1.00 would open the door for doubling in price within the next 3 months. Any drop now below .657 would give the bears the edge again. VWDRY made a new 18-week intraweek and weekly closing high and closed on the high of the week, suggesting further upside above last week's high at 9.22 will be seen this week. The stock closed above a decent weekly close resistance level at 8.86 and above a previous low weekly close at 8.62, which was a level that when broken caused the stock to fall to 6.23, meaning that it was a failure signal against the bears of indicative power. There is decent intraweek resistance at 9.31 but the 200-week MA, currently at 9.70, is now a magnet. The chart is showing a potential up channel being built and if that is the case, the upside objective over the next month or two, would be the 11.20 level. Nonetheless, there is a 50-50 chance that after reaching the 200-week MA at 9.70, that a drop back down as low as 8.08 will occur. It is not clear at this time which of these scenarios will happen and with what order. For the upside to occur, the 10.47 level needs to be broken. ZLAB generated a red weekly close, likely in response to the weakness and break of support in the Chinese index. Having said that, the stock did go below last week's low but did not break any support and then rallied to close slightly in the upper half of the week's trading range, suggesting a slightly higher chance of going above last week's high at 28.31 than going below last week's low at 26.20. Having said that, the chart does favor the bulls for a rally back up to the 200-day MA, currently at 29.61. Short-term pivotal support is at 25.75, which if broken would give the edge back to the bears.
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1) ZLAB - Averaged long at 71.955 (6 mentions). No stop loss at present. Stock closed on Friday at 28.37. 2) ENG - Averaged long at 2.876 (6 mentions). No stop loss at present. Stock closed on Friday at .255. 3) VWDRY - Averaged long at 8.67 (23 mentions). Stop loss at 8.67. Stock closed on Friday at 8.39. 4) LXRX - Averaged long at 2.495 (2 mentions). No stop loss at present. Stock closed on Friday at 1.13. 5) OXY - Liquidated at 61.48. Averaged long at 61.49. Loss on the trade of $2 per 100 shares (2 mentions). 6) MRNA - Averaged long at 70.63 (2 mentions). No stop loss at present. Stock closed on Friday at 78.52. 7) PLNH - Averaged long at 1.526 (3 mentions). No stop loss at present. Stock closed on Friday at .715. 8) SNDL - Averaged long at 9.05 (2 mentions). No stop loss at present. Stock closed at 1.50 on Friday. 9) NEM - Averaged long at 38.63 (2 mentions. No stop loss at present. Stock closed on Friday at 37.59. 10) CPRT - Purchased at 48.68. Stop loss now at 49.68. Stock closed on Friday at 50.82. 11) INTC - Purchased at 38.30 and at 39.24. Averaged long at 38.78 (2 mentions. Stop loss now at 43.20. Stock closed on Friday at 43.96. 12) XOM - Purchased at 102.58. Stop loss at 101.05. Stock closed on Friday at 104.57.
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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
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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