Issue #818
June 25, 2023 ,
The Oasis

Newsletter


The newsletter with chart analysis for stocks and stock indexes

Stock Indexes Analysis/Evaluation


Market now leaning to the downside.

DOW Friday closing price - 33727
SPX Friday closing price - 4348
NASDAQ Friday closing price - 14891
RUT Friday closing price - 1821

Before I begin, let me say that the insurrection that is happening in Russia at this time (Saturday), could be a catalyst for the market. This means that what I put in this newsletter could be totally "off base" on Monday. I almost decided not to write the newsletter but then again, if it not a catalyst, then this information will be useful.

The indexes came to a stop on their upward climb, given that none of the indexes were able to follow through to the upside after closing near the highs of the week the previous week. All indexes closed red and near the lows of the week, suggesting further downside below last week's lows (DOW at 33646, SPX at 4341, NASDAQ at 14794, and RUT at 1818) will be seen this week. Nonetheless, the SPX nor the NAZ did not go below the previous week's low (the DOW and the RUT did), meaning that it is not yet totally clear that a correction has started. By the same token, the news that the UK unexpectedly raised their interest rates by 50 points (instead of 25) and that Powell (in a press conference) did say that raising interest rates further was certainly an option, does give the overall market a higher probability that a correction has started.

On the other side of the coin, the weekly closes that occurred on Friday were not good enough for the bears to claim any sort of victory. The bulls were able to keep the NASDAQ and the SPX from giving very minor failure signals, having closed red but "still above" the previous weekly high weekly close from March 2022 at 14861 (closed at 14891) and above 4280 (respectively). This failure not only keeps those two indexes on a positive path but does not support what happened in the DOW and RUT where a failure signal was given as well as a close below the 200-week MA (respectively).

This scenario means that there is still no confidence in the minds of the traders that this rally might be over.

There are one economic report due out this week that could make a difference to the minds of the traders. The Consumer Confidence number on Tuesday is expected to come out higher than the previous month (last month at 102.3 - expectations are 103.80). This number will show if the traders continue to think the market will move higher or if they think that the market is at rally top. It is not a big catalyst given that this number shows expectations and not necessarily any tangible facts. Nonetheless, in this very confused market, such a number could tilt the scales in one direction or the other.

Chart-wise, here are the levels to watch this week that are somewhat pivotal. In the DOW and on a daily closing basis, some minor but likely somewhat indicative resistance is found at 34098 and then likely more pivotal at 34408. To the downside, there is some minor but short-term pivotal support at 33573. Strongly pivotal support is at 32799. In the SPX, pivotal resistance is at 4425 and short-term indicative support is at 4305. There is no strongly pivotal support or resistance nearby. In the NASDAQ, there strong short-term pivotal resistance at 15239 and there is minor short-term pivotal support at 14867, again at 14002 and then indicative midterm support at 13635. In the RUT, there is highly indicative but short-term pivotal resistance at 1895. As far as support, there is short-term indicative support at 1802. There is no midterm indicative support nearby.

As you can see by the levels mentioned above, the market is disjointed (without overall clear direction), given that some of the indexes are close to some levels that will trigger a strong reaction but then others are nowhere near anything like that. This means that this market is basically industry oriented and not overall sensitive. Proof in the pudding is the fact that Tech has way outperformed all other industries, while small cap has way underperformed all industries.

Under this scenario, it is very difficult to come up with a strategy that offers dependable results. To finish it off, there are no many factors that can change almost on a daily basis, that could turn everything upside down. For example, the tech sector is way overbought and any piece of news that comes out that affects that sector negatively, could bring about a large corrective phase. On the other side of the coin, if reports come out that affect the overall market negatively, the small cap stocks could actually rally as they are normally where traders go at the end of a bull run. More news, which is of a tangible nature, needs to come out and that is not likely to happen for at least a few weeks.


GOLD made new 14-week low, having gotten down to the $1919 level. A new sell signal was given on both the daily and weekly closing chart but on the daily closing chart, a confirmed failure signal was given aw well, given that Gold closed below the daily closing high at $1950 (closed on Thursday at $1923 and on Friday at $1930). Nonetheless, the bears were not able to fully-confirm the breakdown, given that the previous weekly closing high is at $1929 and it closed on Friday at $1930. Gold did close near the low of the week and further downside below $1919 is expected to be seen this week. If the bears are able to generate a weekly close next Friday below $1923, there is open air below until $1862, where there is some minor support. Nonetheless, there is no strong support below $1923 until $1817 is reached. On the other side of the coin, a daily close above $1943 would take some ammunition away from the bulls and any daily close above $1971 would give the edge back to the bulls.

OIL has been trading in a small and sideways trading range between 66.80 and 74.73 for the past 7weeks. Unfortunately for the bulls, the bears have had a decided edge over this period of time as the news from OPEC has generally been supportive but that has not helped the bulls establish any kind of a rally. In addition and based on the charts, Oil has been recently trading in the lower half of the 31-week trading range between 63.64 and 83.53, meaning that a breakdown has a higher probability than a breakout. Oil did close near the low of the week, suggesting further downside below last week's low at 67.35 will be seen this week. This does suggest that the extremely pivotal daily and weekly close support level at 66.74 is likely to be tested this week. A confirmed break of that support would have open air down to $62 and a break of "that" level, would have open air down to as much as a drop down to $45 (though there is some "old" support at $50). With the overall stock market also pointing to at least a correction occurring and interest rates also leaning toward further increases, some fundamental positive news specifically to the Oil market seems to be needed to stop what the chart suggests is likely to happen. As far as what is needed to prevent this from happening, the bulls need to rally Oil above 74.73. Such a rally would negate this negative outlook.

DOLLAR did generate a positive reversal week after the news that UK raised interest rates more than expected and Powell's press conference did leave the door open for more rate increases. Both of these factors prevented the bears from getting a new edge, if not outright control. As such, the Dollar remains in the sideways trading scenario it has been in since December. 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 at 102.90 on Friday, which is basically the midpoint of the trading range. It is unlikely that either of these two levels will be at risk of breaking this week.


Stock Analysis/Evaluation
CHART Outlooks

I have no new mentions for the week, especially since the events that happened this weekend (such as the insurrection in Russia) have put a cloud over the market that is not going to allow clear signals until trading beging on Monday.

In addition and though the probabilities favor more downside and shorts being the preferred trade, the risk/reward ratios here do not favor any new positions being put on this week.

<
Updates
Updates on Held Stocks
Closed Trades, Open Positions and Stop Loss Changes
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 130.84 is expected to be seen this week. Nonetheless, the stock got up to within $1.71 of the 200-week MA, currently at 132.55, and that is a line that under the present circumstances is not likely to be broken. In addition, the indexes are due to move lower. In fact, the outlook on Sunday morning is for a strong lower opening with the NAZ due to open about 190 points lower tomorrow morning. Last but not least, the indexes failed to follow through to the upside last week and that could be the same scenario with the stock this week. As it is, the stock has moved up for 8 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 took a big drop in price this past week, having dropped 10% in value. There was no news on the company to support the drop. The stock closed on the low of the week and further downside below last week's low at 35.97 is expected to be seen this week. Using the closing charts (daily and weekly), the stock is at a level (between 36.06 and 36.17) that needs to hold up or the bulls will lose whatever edge they have obtained over the past 9 months. This means that a green close on Monday is a must. On an intraweek basis, the support is at 35.05. Intraweek resistance is now pivotal at 39.33.

CAT failed to follow through to the upside as was expected to happen after the previous week's close near the high of the week. Instead, the stock generated a red close and did go below the previous week's low and did close near the low of the week, suggesting further downside below last week's low at 231.28 will be seen this week. The stock does show some support at 225.56 and then nothing until the 200-day MA, currently at 222.42 is reached. The 225.56 level has a high degree of probability of being seen this week. Intraweek resistance is now found at 239.85.

ENG had a negative week in which the important daily and weekly close support at .40 was broken (closed at .35). the stock did close on the low of the week and further downside below last week's low at .35 is expected to be seen. The all-time low is at .30 and it is highly likely that level will be tested this week. There was no new news to support this break but the break did negate the gains seen the past 8 weeks. Short-term pivotal resistance is now found at .46.

LXRX made a new 13-week low but then rallied to close in the upper half of the week's trading range, suggesting further upside above last week's high at 2.51 will be seen this week. The stock did generate another sell signal on the daily closing chart as well as breaking the 200-day MA, currently at 2.38. The stock did close at 2.37 on Friday, meaning that Monday's close could give an indication on whether the stock is to head lower or recover. There has been no new news to support this weakness. Daily close resistance is found at 2.54 and at 2.70. A close above 2.70 would erase the weakness shown the past 2 weeks. A daily close below 2.17 would bring in new selling interest.

PLNHF continued to trade in a trading range that is meaningless. The bulls had the chance to generate a failure signal against the bears, having traded above the short-term pivotal daily and weekly close resistance at .60 on Thursday and Friday. Nonetheless, the bulls failed and the stock closed at .58. At this time, there is no evaluation possible until the stock gets out of this 5-week sideways trading range.

TCEHY generated a red week and a close on the low of the week, suggesting further downside below last week's low at 42.30 will be seen this week. The red week makes the previous week's intraweek high at 46.46 into the 3rd successful retest of the 53.86 high seen in January. On the other side of the coin, the stock has been building a bullish pennant formation that if broken to the upside (a move above 46.46) would offer a 67.04 objective. 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 and generate a new rally up, or break and give a new leg down. As such, this week is pivotal for the stock.

TOL made a new all-time high this past week when the report about Housing Starts came out showing a much higher number than expected. The entire housing and construction industry rose because of that report. Other than that, there was no specific news on the company to support the rally. In fact and with the overall index market heading lower, it is going to be difficult for the bulls to continue rallying more to the upside. The stock did close near the high of the week and further upside above last week's high at 76.55 is expected to be seen this week. Nonetheless and like what happened to the index market this past week, there is a slightly higher possibility of follow through to the upside not happening than normal. 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 recover, the stock is likely to go higher.

VET had a red week in which the recent gains were erased. This was due to Oil and Natural Gas having had a down week. Nonetheless and though the gains were erased, no new sell signal was created. The stock closed on the low of the week, suggesting further downside below last week's low at 11.55 will be seen this week. Pivotal intraweek support is found at 10.75 but on a weekly closing basis, it is at 11.55 (stock closed on Friday at 11.64. This means that this week is pivotal as the bulls need a green close next Friday. If no new lows are made and the stock does rally, this coming week's drop will likely become the needed/required retest of the 10.75 low. Intraweek resistance is found at 12.32 and pivotal at 12.69.

VWDRY generated a new 7-month intraweek and weekly closing low and closed on the low of the week, suggesting further downside below last week's low at 8.68 will be seen this week. There was no news on the company to support this drop. The stock did gap down and closed below the 200-day MA, currently at 8.77. There is intraweek support at 8.10 that has a good chance of being reached. With no news to support this drop, this coming week is pivotal. The bulls need to generate a failure signal against the bears by closing above 8.77 for two days in a row. On a negative note, minor to decent intraweek resistance is found at 9.31 and further weekly close resistance is found at 9.55, which is where the 200-week MA is found. The bulls need to break and close above those two levels to negate this surprising and quite negative-to-the-chart breakdown.

ZLAB continued the down trend, having made a new 9-month intraweek and weekly closing low. The stock closed on the low of the week and further downside below last week's low at 24.94 is expected to be seen this week. On an intraweek basis, the stock shows support at 24.50, at 22.51 and at 20.98. Nonetheless, on a weekly closing basis, there is only one support left, which is at 23.75, which if broken would be a new multi-year low that would severely weaken the chart. Like with so many other held stocks that are heading lower, there has been no negative news on the company coming out. On a daily closing basis, there are two support levels (at 25.03 and at 24.51) that are very important this week, especially since the Chinese market is also at a very important chart level where the bulls need to generate buying this week or face further downside of consequence. A daily close above 30.21 will take most of the selling pressure off.


1) ZLAB - Averaged long at 71.955 (6 mentions). No stop loss at present. Stock closed on Friday at 25.30.

2) ENG - Averaged long at 2.876 (6 mentions). No stop loss at present. Stock closed on Friday at .35.

3) VWDRY - Averaged long at 9.565 (2 mentions). Stop loss at 8.67. Stock closed on Friday at 8.71.

4) - Purchased at 3.38. No stop loss at present. Stock closed on Friday at 2.37.

5) ANTI - Purchased at 36.29. Stop loss at 38.99 (mental). Stock closed on Friday at 36.13.

6) VET - Averaged long at 14.956 (3 mentions). No stop loss at present. Stock closed on Friday at 11.66.

7) CAT - Shorted at 247.21. No stop loss at present. Stock closed on Friday at 234.44.

8) TCEHY - Purchased at 43.23. No stop loss at present. Stock closed on Friday at 42.44.

9) AMZN - Shorted at 130.73. Stop loss is at 1136.50. Stock closed on Friday at 129.33.

10) TOL - Averaged short at 73.43 (2 mentions. Stop loss at 75.71. Stock closed on Friday at 75.10.

11) CAT - Shorted at 250.32. Covered shorts at 241.30. Profit on the trade of $902 per 100 shares.

12) AMZN - Shorted at 127.25. Covered shorts at 128.43. Loss on the trade of $128 PER 100 sdhares.


Join The Oasis and receive chart information about stocks you personally follow as well as ideas about other stocks with powerful chart patterns.

Previous Newsletters

View Jan 01, 2023 Newsletter

View Jan 08, 2023 Newsletter

View Jan 15, 2023 Newsletter

View Jan 22, 2023 Newsletter

View Feb 05, 2023 Newsletter

View Feb 12, 2023 Newsletter

View Feb 19, 2023 Newsletter

View Feb 26, 2023 Newsletter

View Mch 05, 2023 Newsletter

View Mar 12, 2023 Newsletter

View Mar 19, 2023 Newsletter

View Mar 26, 2023 Newsletter

View Apr 02, 2023 Newsletter

View Apr 09, 2023 Newsletter

View Apr 16, 2023 Newsletter

View Apr 23, 2023 Newsletter

View Apr 30, 2023 Newsletter

View May 07, 2023 Newsletter

View May 14, 2023 Newsletter

View May 28, 2023 Newsletter

View Jun 04, 2023 Newsletter

View Jun 11, 2023 Newsletter

View Jun 18, 2023 Newsletter

Encyclopedia of Chart Patterns.
A must have for chart aficionados!


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.




The Oasis is owned by
Oasis Resolutions Inc.