 |
 |
 |
 |
 |
 |
Issue #835 
November 5, 2023 , | Newsletter
The newsletter with chart analysis for stocks and stock indexes |
Stock Indexes Analysis/Evaluation
|
| Bulls turn it around and gain the edge. November Seasonal Tendency Taking Over?
DOW Friday closing price - 34061
The indexes generated a strong move up with the DOW moving up 4.9%, the SPX moving up 5.5%, the NASDAQ moving up 6.1% and the RUT moving up 7.1%. This was the biggest weekly move up since March. All indexes closed on the highs of the week, suggesting further upside above last week's highs will be seen this week (DOW above 34163, SPX above 4373, NAZ above 15149, and RUT above 1770).
The fact that the NASDAQ and the RUT outperformed the other indexes is a bullish statement that suggests that a short-term uptrend has begun. The fact that seasonally the market moves up in November and December certainly supports that idea. In addition to that, there are no reports due out for the next few weeks that could be catalytic in nature. The important earnings reports for the quarter have come out, the two most important economic reports for the month (Jobs and ISM Index) came out this past week and to finish it off, the Fed reported this past week that there they are not raising rates this month and that the probability of further raising is low. As such, the bulls are likely to take advantage of that and keep the markets going higher for November.
Having said that, the NASDAQ is going to be the main index to watch this week. The index has a well-defined 3-point down channel that started in July and if broken (a break above 15333), would give an objective of 17023, which would be a new all-time high (above 16764).
The other index that bears watching is the RUT because if it breaks above 1786 (closed on Friday at 1760), it would likely get up to 1812 (which is considered a minor to perhaps decent intraweek resistance), and if that level breaks, there would be open air to the 200-week MA, currently at 1872. Evidently, if the NAZ gets above its resistance, the 200-week MA would become a strong magnet.
As far as the DOW and the SPX are concerned, the former has open air to 34712 ((650 points higher) and the latter has open air to 4448 (90 points higher).
It is clearly evident that the NASDAQ is the big key this week. The downtrend channel is clearly defined and the index closed on the line itself on Friday. As such, any further upside will begin to feel bullish. If the bulls can rally the index another 235 points above Friday's close, the computers and algorithms will take over and attempt to reach the all-time high will be seen.
As far as the downside is concerned and using the NASDAQ as the key indicator, the index show 3 gaps up. Closure of the last gap up, which is at 14930, is likely to be seen on Monday. Nonetheless, if the second gap at 14677 is closed, that will mean the downtrend channel remains in place and the bears will come back in and sell. By the same token, the DOW is only showing 2 gaps, meaning a breakaway and runaway gap formation and if the runaway gap is closed (at 33852), it will make the breakaway gap (at 33337) a magnet.
The bulls are presently in control and the 3rd gap in the NASDAQ does not need to be closed "now" as it could be closed after the 15333 level is broken and if so, it would simply become a retest of the breakout level before the attempt at the all-time high is made. As such, it is somewhat important what happens on Monday. There are no economic reports due out this week, meaning this will be all chart oriented.
OIL generated a new 9-week intraweek and weekly closing low and closed on the low of the week, suggesting further downside below last week's low at 80.10 will be seen this week. Friday turned out to be a very disappointing day as Oil had closed on Thursday at 82.46 and did trade as high as 83.60 on Friday. The bulls needed a weekly close above 82.79 in order to prevent a new sell signal from occurring but were not able to maintain the up momentum and ended up having a very negative reversal day as the low for the week was made on Friday. Having said that and also having a new sell signal given on the weekly closing chart, the bulls were able to close above the 79.83 level (closed at 80.51), thus preventing a much more negative and bearish signal from being given. Nonetheless, it is now clearly evident that this week is pivotal. Pivotal intraweek support is found at 78.53 (78.89 on a daily closing basis), which if broken, would give control back to the bears. Short term intraweek resistance is found at 83.60 (82.46 on a daily closing basis). This $5 range is now highly important in determining what is to happen the rest of the month.
DOLLAR generated a negative reversal week, having made a new 4-week high but then making a new 6-week low. The bulls attempted to keep the uptrend going with a rally up to 107.11. Nonetheless, they were unable to break above the high made 6 weeks ago at 107.35 and the traders turned negative. Evidently this came about when it was stated by the Fed that they were not raising rates this month and that it was likely that no further raise of rates was likely to happen. With that fundamental news, the Dollar turned around and broke the weekly close support at 105.64 and also generated a failure to follow through signal with a close below a previous and pivotal high weekly close resistance at 105.21 (closed at 105.02). The Dollar closed on the low of the week, suggesting further downside below last week's low at 104.94 will be seen this week. There is some minor intraweek support at 104.67 and at 104.42. If broken, there is no support until the 102.94/103.45 level is reached. With no catalytic news scheduled to be released this week, the outlook clearly favors the bears.
|
Stock Analysis/Evaluation
|
CHART Outlooks
I have no mentions this week, at least none at this writing. The index market is facing a highly short-term pivotal resistance area that at this point is not yet known if it will break. The outlook for the market is positive but having generated a big rally this past week, purchasing requires chasing the stocks and until it is confirmed that a breakout "has occurred", chasing is not yet an option. On the other side of the coin, shorting stocks at this time is a low probability trade.
If and when a confirmed breakout occurs, I will give additional buy mentions in the message board or on next week's newsletter.
|
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 2023, as of 10/1 Profit of $8,293 using 100 shares per mention (after commissions & losses) 3 Closed out profitable trades for October per 100 shares per mention (after commission)
NONE
Closed positions with increase in equity above last months close minus commissions.
CAT (short) $976 Total Profit for October, per 100 shares and after commissions $1,749 Closed out losing trades for October per 100 shares of each mention (including commission)
MRNA (long) $174
Closed positions with decrease in equity below last months close plus commissions. TCEHY (long) $213 Total Loss for October, per 100 shares, including commissions $387 Open positions in profit per 100 shares per mention as of 11/1
OXY (short) $64
Open positions with increase in equity above last months close.
VWDRY (long) $21 ZLAB (long) $554 BTZI (long) $17 LXRX (long) $30 Total $622 Open positions in loss per 100 shares per mention as of 11/1
NEM (long) $32
Open positions with decrease in equity below last months close.
SNDL (long) $46 Total $109 Status of trades for month of October per 100 shares on each mention after losses subtracted.
Profit of $1,875
Status of account/portfolio for 2023, as of 10/31
Profit of $10,168 per 100 shares.
ENG made a new 5-week intraweek high this past week but the bulls were unable to hold the gains and the stock once again closed below the .30 cent support level. The stock closed in the lower half of the week's trading range, suggesting further downside below last week's low at .262 will be seen this week. Having said that, the stock reports earnings on Tuesday and this week will be all about that. Intraweek resistance is at .36 and intraweek support is at .25. Whichever gets broken, will be indicative of what is to happen the rest of the year.
LXRX made a new 7-week intraweek and weekly closing high and closed on the high of the week, suggesting further upside above last week's high at 1.50 will be seen this week. The stock generated a buy signal on both the daily and weekly closing chart and also generated a failure signal against the bulls on the weekly chart, having closed above the previous and important weekly close support at 1.46 (closed at 1.48). The failure signal against the bears will need to be confirmed next Friday. The company reports earnings on Wednesday, November 9th and that will be indicative, one way or the other. Any daily close below 1.36 would now be a negative, while any daily close above 1.61 would be a positive. Probabilities do favor the bulls and if there are no negatives in the earnings report, the objective could be as high as 2.10, as that is where the 200-day MA is currently at. MRNA reported earnings this week and they were worse than expected and the stock made a new 38-month intraweek low. Nonetheless, strong buying came in at that low price and the stock ended up closing the week in the green and near the high of the week, suggesting further upside above last week's high at 79.25 will be seen this week. There is no intraweek resistance above until 87.00 is reached. Above that, there is stronger intraweek resistance at 95.21, which was the mention's objective. This stock had fallen 72% in value over the past 11 months due to the lack of interest in the Covid vaccine. Nonetheless and prior to the vaccine being made, this stock was trading around the $90-$95 level and a rally to that level is expected to happen. It does need to be mentioned that if 95.21 is broken, the objective would become the 200-week MA, currently at 149.28. Of course, if that level is to be reached, it is unlikely to happen for at least 5-6 months. Any daily close below 71.91 would bring the bears back. NEM generated a positive reversal week, having made a new 4-week low but then turning around to get above the previous week's high and closing green and near the high of the week, suggesting further upside above the previous week's high at 39.32 will be seen this week. The stock did generate a new buy signal on the daily closing chart, having closed above the previous high daily close at 38.97 (closed at 39.02). On a daily closing basis, the upside objective for this week is 39.76. Any daily close above 40.47 would open the door for a rally up to the 200-day MA, currently at 43.57. This stock is a Gold stock so watching what Gold does this week is important. In looking at the weekly chart, the chart looks positive for the stock. A weekly close above 40.74 would suggest $45 will be seen. Any daily close below 37.27 would once again weaken the chart. OXY generated a positive reversal week, having made a new 4-week low and then closing green and near the high of the week, suggesting further upside above last week's high at 63.44 will be seen this week. Having said that, this stock has been in a sideways trading range since the last week of July, having traded repeatedly within a weekly close trading range between 66.15 and 61.40. Any break of either of those two levels would offer a $5 rally or drop in price. The monthly chart does suggest a slightly higher probability of a breakout than a breakdown but it is evident in looking at that chart, that the probabilities of a major move in either direction are minimal. As such, it is a stock that could be considered "expendable" if the money can be used somewhere else for a better profit potential. I am averaged long at 61.49 and therefore in profit (stock closed on Friday at 63.01). If I find somewhere else to put that money into, I will take profits. PLNH generated a positive reversal week, having made a new 9-week low but then closing green and near the high of the day, suggesting further upside above last week's high at .693 will be seen this week. On thing that made this reversal even more indicative is that the stock did break a pivotal intraweek support at .52 with a low at .50 but the break did not generate new selling, in fact the opposite occurred as resistance was at .60 and that got broken. The company is likely (not set) to report earnings on Thursday November 9th and it could be a catalyst. There are two important daily close resistance levels above at .73 and at .79. A close above the former would generate a failure signal against the bears, as well as a close above the 200-day MA, currently at .721. A close above the latter, would generate a new buy signal. Short-term pivotal support is found at .60. A daily close below that level will bring back the bears. VWDRY made a new 9-week intraweek and weekly closing high and closed near the high of the week, suggesting further upside above last week's high at 7.84 will be seen this week. New buy signals were given on both the daily and weekly closing charts, suggesting this rally has legs. There is open air above up to a very minor intraweek resistance at 8.24. Above that, there is open air to next and also somewhat minor intraweek resistance at 8.76. Resistance of some note is found at 9.31. Intraweek support is found a 7.40 and pivotal at 6.76. The company reports earnings on Wednesday November 8th and I am sure that will have some effect on the stock. Nonetheless, the monthly chart does suggest that a rally to 9.31 is likely to be seen this month or in December at the latest. ZLAB generated a positive green week that generated a new buy signal, having closed above the most recent high weekly close at 25.22 (closed at 25.72). More importantly, where the stock closed on Friday means that it broke a firmly established 5-point downtrend line (based on weekly closes and going back to January) that was presently at 24.02, suggesting that the downtrend is over. This was all further supported with the Chinese HSI index making a new 12-day high. Using the daily closing chart, there is open air up to the 28.20 level. Nonetheless, the monthly chart shows no resistance until the $30 level is reached. The 200-day MA is currently at 30.92. Daily close support is now found at 24.75. A close below that would generate doubts as to the short-term uptrend occurring.
|
1) ZLAB - Averaged long at 71.955 (6 mentions). No stop loss at present. Stock closed on Friday at 25.72. 2) ENG - Averaged long at 2.876 (6 mentions). No stop loss at present. Stock closed on Friday at .295. 3) VWDRY - Averaged long at 8.67 (23 mentions). Stop loss at 8.67. Stock closed on Friday at 7.68. 4) LXRX - Averaged long at 2.495 (2 mentions). No stop loss at present. Stock closed on Friday at 1.48. 5) OXY - Purchased at 61.02. Averaged long at 61.49 (2 mentions). Stop loss now at 60.85. Stock closed on Friday at 63.01. 6) MRNA - Purchased at 69.14. No stop loss at present. Stock closed on Friday at 77.53. 7) PLNH - Averaged long at 1.526 (3 mentions). No stop loss at present. Stock closed on Friday at .656. 8) SNDL - Averaged long at 9.05 (2 mentions). No stop loss at present. Stock closed at 1.56 on Friday. 9) NEM - Purchased at 38.01 and at 37.25. Averaged long at 38.63 (2 mentions. Stop loss is at 36.l60. Stock closed on Friday at 39.02. 10( MRNA - Purchased at 73.66. Liquidated at 71.91. Loss on the trade of $175 per 100 shares.
Previous Newsletters
|
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. |
|
|
|