Issue #819
July 2, 2023 ,
The Oasis

Newsletter


The newsletter with chart analysis for stocks and stock indexes

Stock Indexes Analysis/Evaluation


Bulls Remain in Control but Resistance Areas of Note are Close By.

DOW Friday closing price - 34437
SPX Friday closing price - 4450
NASDAQ Friday closing price - 15179
RUT Friday closing price - 1888

The bulls were able to pull off another leg up on the rally that started 8 months again, having made new weekly closing highs above the highs seen since the rally began in October. In the case of the DOW, the index made a new 7-month weekly closing high, in the case of the SPX, it was a new 15 month high, in the case of the NASDAQ, it was a new 17-month high, and in the case of the RUT, it was a new 4-month high. All indexes closed on or near the highs of the week, suggesting further upside above last week's highs will be seen this week (DOW above 34467, SPX above 4458, NAZ above 15215, and RUT above 1898).

The reasons for the continuation of the rally are all based on expectations of what the Fed is going to do as well as on the continuing better than expected economic and earnings reports. This past week, the Durable Goods number, Case/Schiller Home Price Index number, the Consumer Confidence number, the 3rd estimate of GDP, and the PCE number were all better than expected and that gave new ammunition to the bulls, while taking it away from the bears. On the other side of the coin, none of the numbers were important enough to cause the Fed to raise interest rates automatically, but as a "group" of numbers that were all better than expected, and then with no established chart resistance levels close by, gave the bulls enough ammunition to accomplish what they did.

Having said that, the situation for this coming week is different. To begin with, most of the indexes are now close to established areas of resistance where automatic computer and algorithm sales are likely to be seen. In addition, this coming week does have some very important and possibly catalytic reports due out, with the ISM index report due out on Monday and the Jobs report due out on Friday.

As far as the charts are concerned, in the DOW, there is a mountain of intraweek resistance between 34342 and 34712. With the index closing on Friday at 34407, the index is facing selling interest from the get go. In addition and even if this level is broken, there is another mountain (though somewhat smaller) of intraweek resistance between 35091 and 35631. On a daily closing basis, the resistance is decent to strong between 34589 and 34911, suggesting that the fundamental outlook needs to be better than it has been since May 2021, in order to break through this area. With the rally being mostly done on the strength of 7 stocks, the probabilities of this area being broken are very low.

In the SPX, the index does have open air above for now but does show decent to strong intraweek and daily close resistance between 4536 and 4589. With the index closing at 4451 on Friday, it certainly has room to move another 80 points to the upside but once there, it will be close to impossible to continue higher.

In the NASDAQ, the index did "not" make a new intraweek or daily closing rally high, meaning that it has recently (last week or two) been the laggard. The index does have decent daily close resistance between 15185 and 15239. If broken, there is open air above to decent to strong resistance between 15617 and 15675. Either way and with the index closing on Friday at 15179, it is evident that the most the index could go higher is another 500 points.

Right across the board, the indexes could rally up anywhere from 2-3% more to the upside (under the best of circumstances), but are facing highly realistic drops of at least 8% (DOW) to as much as 17% (NAZ). The risk/reward ratio is highly in favor of the bears at these levels.

The fundamental picture is pretty well set for the rest of the year. Interest rate hikes of as much as another 25-75 point could be seen, but it is not realistic to believe there will be any interest rate cuts for the rest of the year. Inflation seems to be ingrained into the economy for at least another 6 months, meaning it could come down some but not so much as to give the bulls strong ammunition for further upside above the established resistance levels. As such, the chart picture seems to be relatively clear, especially now where established resistance levels of note are close by and support levels are nowhere near.

For this week though, much will be decided (within the levels mentioned above) with the economic reports due out. It does need to be mentioned that if the reports are not better than expected, or at least as good as expected and the following daily close support levels get broken (DOW at 33714, SPX at 4328, and NASDAQ at 14689), those will be clear signals that no further upside is to be seen.


GOLD made new 15-week low, having gotten down to the $1900 level this past week. Nonetheless, support is found between $1890 and $1899 and Gold did bounce to close in the upper half of the week's trading range, suggesting a higher probability of going above last week's high at $1943 than below last week's low at $1900 (closed at $1929). In addition and probably more importantly, the close at $1929 was exactly at the same high weekly close at that price seen in January, and from which Gold dropped down to $1810 just 5 weeks later. This means that this is a short-term pivot point that will be decided next Friday, whether the correction might be over or further downside is to occur. It is important to note that on the daily closing chart, that same $1929 level is at $1950, meaning that the level did get broken and confirmed as broken on that chart. This also means that the bears do have the edge right now and that they need a confirmed daily close above $1950 to give the edge back to the bulls. A red weekly close next Friday would likely mean the $1862/$1869 level would be targeted.

OIL remained in the same small trading range between 66.80 and 74.73 that it has been trading in for the past 8 weeks as this week's trading range was 67.05 to 71.24. Nonetheless, Oil did close near the high of the week (closed at 70.64), suggesting further upside will be seen this week. This suggests that once more, the trading range will likely remain "in place". OPEC is meeting this week on the 5th and there is always the chance that they will do additional production cuts to support the price of Oil. Any break outside of the trading range would be indicative.

DOLLAR remained in the sideways trading scenario it has been in since December, between 104.70 and 100.82 (trading range this past week was 102.32 to 103.54). In this range, a break above 104.70 or a break below 100.82 would strongly tilt the strength to the bulls or bears. The Dollar closed in the middle of the trading range (closed at 102.93), which is only $.03 cents above last week's close, meaning it is totally sitting idle awaiting news. Such news could be seen this week with the two important economic reports due out.


Stock Analysis/Evaluation
CHART Outlooks

It is a pivotal week for the market but as explained above, there is little room to the upside before decent to perhaps strong resistance levels are reached, but on the other side of the coin, there is a lot of open air below. As such, short positions should be considered.

Nonetheless and with important economic reports due out this week that could end up being pivotal, and the fact that the portfolio already has 4 different shorted stocks, I will not be giving any new mentions in the newsletter. After the reports come out and the outlook is a bit clearer, I will offer new mentions on the message board.

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Updates
Monthly & Yearly Portfolio Results
Closed Trades, Open Positions and Stop Loss Changes

Status of account for 2007: Profit of $9,758 per 100 shares after losses and commissions were subtracted.
Status of account for 2008: Profit of $14,704 per 100 shares after losses and commissions were subtracted.
Status of account for 2009: Profit of $7,523 per 100 shares after losses and commissions were subtracted.
Status of account for 2010: Profit of $24,045 per 100 shares after losses and commissions were subtracted.
Status of account for 2011: Profit of $3,616 per 100 shares after losses and commissions were subtracted.
Status of account for 2012: Profit of $3,399 per 100 shares after losses and commissions were subtracted.
Status of account for 2013: Profit of $15,886 per 100 shares after losses and commissions were subtracted.
Status of account for 2014: Profit of $21,221 per 100 shares after losses and commissions were subtracted.
Status of account for 2015: Profit of $19,190 per 100 shares after losses and commissions were subtracted.
Status of account for 2016: Loss of $15,134 per 100 shares after losses and commissions were subtracted.
Status of account for 2017: Loss of $9,666 per 100 shares after losses and commissions were subtracted.
Status of account for 2018: Profit of $1,637 per 100 shares after losses and commissions were subtracted
Status of account for 2019: Profit of $13,051per 100 shares after losses and commissions were subtracted
Status of account for 2020: Loss of $16,684 per 100 shares after losses and commissions were subtracted.
Status of account for 2021: Profit of $527 per 100 shares after losses and commissions were subtracted.
Status of account for 2021: Profit of $6,126 per 100 shares after losses and commissions were subtracted.

Status of account for 2023, as of 6/1

Profit of $10,678 using 100 shares per mention (after commissions & losses)

Closed out profitable trades for June per 100 shares per mention (after commission)

CAT (short) $902

Closed positions with increase in equity above last months close minus commissions.

CLF (long) $232

Total Profit for May, per 100 shares and after commissions $1,134

Closed out losing trades for May per 100 shares of each mention (including commission)

CAT (short) $95
AMZN (short) $35 br> AMZN (short) $128

Closed positions with decrease in equity below last months close plus commissions.

NONE

Total Loss for June, per 100 shares, including commissions $258

Open positions in profit per 100 shares per mention as of 7/1

TNE (short) $9
CAT (short) $116
AMZN (short) $47

Open positions with increase in equity above last months close.

VET (long) $474
PLNHF (long) $3
TCEHY (long) $286

Total $935

Open positions in loss per 100 shares per mention as of 7/1

NONE

Open positions with decrease in equity below last months close.

ANTI (long) $593
ENG (long) $30
LXRX (long) $101
VWDRY (long) $136
SNDL (Long $10
ZLAB (long) $2856
BTZI (long) $10

Total $3,786

Status of trades for month of June per 100 shares on each mention after losses subtracted.

Loss of $1,975

Status of account/portfolio for 2023, as of 6/30

Profit of $8,703

per 100 shares.



Updates on Held Stocks

AMZN continued its uptrend, having made a new 9-month high. The stock closed near the high of the week and further upside above last week's high at 131.49 is expected to be seen this week. Nonetheless, the stock remained below the 200-week MA, currently at 132.55, meaning that the bulls have more to do before it can be said that they accomplished changing the long-term downtrend. The stock has moved up for 9 weeks in a row with higher lows than the previous week, meaning the stock is overbought and has no recently built support of consequence nearby. That means that the risk/reward ratio for the bulls is negative. Minor support is found at 123.85, and again and a bit (not much) stronger at 120.80. Below that, there is open air to 105.35, which is the objective of the mention. To the upside, pivotal resistance is found at 136.49.

ATNI generated a positive reversal week, having made a new 8-week low but then turning green. Unfortunately for the bulls, the stock closed in the lower half of the week's trading range, suggesting a higher probability of going below last week's low at 35.95 than going above last week's high at 38.17. It does need to be mentioned though, that the stock had a low of 35.97 the previous week and as such, it only went $.02 cents lower. It was expected to be more than that but it wasn't, suggesting there is buying interest around that price and down to the 8-month support at 35.03 and the 15-month low at 34.74. Last week's high was 38.19 and that is now the short-term pivotal resistance.

CAT failed to follow through to the downside last week (as was expected) and had an upside week with a rally above the previous week's high, suggesting the bulls remain with the edge. The stock closed near the high of the week and further upside above last week's high at 246.93 is expected to be seen this week. Pivotal intraweek resistatance is found at 250.89 that should not be broken. If it is not broken and the stock turns down, the stock will then have a successful retest of the rally high, which in turn would bring new selling interest if it all happens. Support is now found at 231.28, if that is broken, a dropd down to 225.26 would then likely be seen.

ENG had a totally uneventful inside week but it can be said it was "somewhat" eventful given that no follow through to the downside occurred even though it was expected to happen. The stock did close slightly in the upper half of the week's trading range, suggesting more upside above last week's high at .40 will be seen this week. Nonetheless, the bulls need to generate a daily close above .43 or a weekly close above .40, in order to generate any new buying interest. Pivotal support remains at .30.

LXRX made a new 6-month intraweek low but then rallied to close in the upper half of the week's trading range, suggesting a higher probability of going above last week's high at 2.40 than below last week's low at 2.08. Nonetheless, the bulls have not yet been able to generate any movement of consequence that would suggest that the correction/downtrend is over. The stock remains below the 200-day MA, currently at 2.37. An intraweek break above 2.51 or two daily closes above 2.37 are needed to generate any new buying interest. Intraweek support is now found at 2.08. If broken, a drop down to at least 1.98/2.00 would likely occur.

PLNHF continued to trade in a trading range that is meaningless. The stock had an even smaller inside week trading range that any seen before. At this time, there is no evaluation possible until the stock gets out of this 6-week sideways trading range between .52 and .60.

TCEHY generated an outside week, having gone above last week's high and below last week's low. The stock did generate a green weekly close but then closed in the lower half of the week's trading range, suggesting a higher chance of going below last week's low at 42.00 than above last week's high at 44.71. Support in this formation is found at 42.05 and pivotal at 38.88. This is a Chinese stock and the Chinese market finds itself at a pivot point that will either hold or generate a new rally up. As such, the stock remains dependent on what the Chinese market does.

TNC has built a bullish flag formation that if broken (an intraweek rally above 82.07), would offer a 89.93 objective. The stock did close near the high of the week and further upside above last week's high at 82.00 is expected to be seen. Stop loss is at 82.35, which if hit, covering of the short positions should be done. By the same token, there is a mountain of resistance between 82.32 and 85.73 (much like the index market) that is going to require positive fundamental news to occur. As such, the flag formation has much lower expectations of being fulfilled than it normally would have. Any daily close below 79.75 would negate the formation and generate a new sell signal on the daily chart. This short trade was established as a low risk "gamble".

TOL continued it inexorable climb upward, having made another new all-time high that confirmed the breakout. The stock closed on the high of the week and further upside above last week's high at 79.47 is expected to be seen. Nonetheless, the stock is way overbought, has surpassed the rating companies upside objective of $76, and has gone up with higher lows and higher highs for 6 weeks in a row and 11 of the past 12 weeks, meaning that "any" negative to the stock or to the indexes will likely bring about a correction of note. Pivotal daily close support is found at 73.33. A daily close below that level would generate a sell signal, as well as a failure signal against the bulls, given that the previous all-time high daily close is at 74.61. There is no resistance above, meaning that if the indexes continue to go higher, the stock is likely to go higher.

VET did not generate any follow through to the downside in spite of the previous week's close on the low of the week. The stock generated a green close, on the high of the week and above the 200-week MA, suggesting that further upside above last week's high at 12.58 will be seen this week. The stock has built a rounded bottom over the past 2 months and any daily close above 12.53 will generate a breakout. The stock closed at 12.45 on Friday and therefore it is possible a breakout will occur on Monday. Any intraweek rally above 12.98 would also be a signal that a breakout has occurred. Any daily close below 11.64 would now be a strong negative. Immediate upside objective of a breakout would be the $14 level.

VWDRY generated a positive reversal week, having generated a new 7-month intraweek 8.58 but then closing green and near the high of the week, suggesting further upside above last week's high at 8.88 will be seen this week. The 200-week MA is currently at 9.53 and a retest of that line is likely to be seen. On another possibly positive note, the stock did close on Friday above the 200-day MA, currently at 8.78 (closed at 8.80) and if that is confirmed on Monday with another green close, a rally up to retest the most recent intraweek high at 9.42 is likely to be seen. Pivotal resistance is now found at 8.58.

ZLAB bears failed to generate further downside after the previous week's close on the low of the week, having started the week green and then continuing to the upside and on Friday, going above the previous week's high. There was no news to support this move up, suggesting that the bears have run out of ammunition around the $25 level. The stock did close on the high of the week and further upside above last week's high at 28.07 is expected to be seen this week. Nonetheless and in spite of the positive action, the bulls need to do more before some new buying interest is seen. A daily close above 29.08 would generate a new buy signal and a weekly close above 30.78 would generate a failure signal against the bears. Pivotal support is now found at 24.94. The stock did spike up on Friday and that does suggest that the bulls may be able to do something of note this week.


1) ZLAB - Averaged long at 71.955 (6 mentions). No stop loss at present. Stock closed on Friday at 27.73.

2) ENG - Averaged long at 2.876 (6 mentions). No stop loss at present. Stock closed on Friday at .376.

3) VWDRY - Averaged long at 9.565 (2 mentions). Stop loss at 8.67. Stock closed on Friday at 8.80.

4) - Purchased at 3.38. No stop loss at present. Stock closed on Friday at 2.29.

5) ANTI - Purchased at 36.29. Stop loss at 38.99 (mental). Stock closed on Friday at 36.60.

6) VET - Averaged long at 14.956 (3 mentions). No stop loss at present. Stock closed on Friday at 12.45.

7) CAT - Shorted at 247.21. No stop loss at present. Stock closed on Friday at 246.05

8) TCEHY - Purchased at 43.23. No stop loss at present. Stock closed on Friday at 42.49.

9) AMZN - Shorted at 130.73. Stop loss is at 136.50. Stock closed on Friday at 130.36.

10) TOL - Averaged short at 73.43 (2 mentions. No stop loss at present. Stock closed on Friday at 79.03.

11) TNC - Shorted at 81.20. Stop Loss is at 82.35. Stock closed on Friday at 81.11.


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Disclaimer

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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