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Issue #889 
December 01, 2024 , | Newsletter
The newsletter with chart analysis for stocks and stock indexes |
Stock Indexes Analysis/Evaluation
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| Bulls win the week and maintain control.
DOW Friday Closing Price - 44910 All indexes made a new all-time intramonth and monthly closing highs and closed on (or near) the highs of the month, suggesting further upside above last month's highs (DOW at 45071, SPX at 6044, NASDAQ at 21182, and RUT at 2466) will be seen this month. Over the past few months, the DOW has led all the indexes and the NASDAQ has trailed all the indexes, meaning that the new highs continue to be suspect. Having said that and since the original new all-time high monthly closes occurred 3 years ago (in 2021), the NAZ has led the way, having appreciated close to 23%. The SPX has appreciated 22% and the DOW has appreciated 19.2%. The RUT has appreciated only 5% during this period of time. I mention this because that is a major run without any correction of consequence occurring, meaning that it is difficult to imagine much further upside occurring without that happening soon. Having said that, December is normally a seasonal up month where the indexes appreciate an average of 1.3% and with no reasons (at this time and with the Trump win supporting the market, at least until he takes office in January), there seems to be little reason to think that this December will be much different. If the indexes do follow the seasonal norm, the SPX would be closing around 6111 (79 points higher than Friday's close) at the end of December. Once again and as mentioned recently, one problem that does exist for the bulls is that the indexes have moved almost straight up and no support levels of consequence have been built. With the Trump administration's policies likely to change the fundamental picture in a big way, which could be in a big negative way if what has been promised is done without any safety nets included (none have been proposed yet), the bulls need to build a support base of consequence so the risk/reward ratios are workable for buying in a protected way. Such action needs to happen over the next 8 weeks (before the January 21st inauguration). This does suggest that for a good part of December and the first 3 weeks of January, the index market is likely to have many ups and downs from week to week. With that in mind and keeping the idea of December being a seasonal up month with a 1.3% appreciation, here are the levels that are likely to be seen over the next 8 weeks. The DOW is likely to get down as low as 42000 and as high as 45493. With the index having closed at 44910 on Friday, that is another 583 points to the upside but 2910 points to the downside. In the SPX, the levels at 6111 and 5748 or even perhaps as low as 5648. In the NASDAQ, those levels are 21931 and 18421 and in the RUT those levels are 2464 and 2303 or perhaps as low at 2276. The only thing in question is when the downside is to occur (December or January). The NASDAQ and the RUT are going to be the important indexes to watch in December. The former made the new all-time monthly closing high the first week of November (contrary to all the others that made it this past Friday. This means that on a daily and weekly closing basis, the index has not made a new all-time highs for the past 4 weeks and if the bulls fail to do that this week, the selling interest will increase. As such, the index has to make a new daily "and" weekly closing high above 21117 this week. A daily close below 20394 would give the bears ammunition and weekly close this Friday below the same 20394 would bring in the bears in a stronger way. On the other side of the coin, the RUT needs to keep outperforming the indexes in order for the bulls to maintain momentum. Any daily red daily close this week below 2426 would give the bears ammunition and that would be a negative overall to the bulls. That is what is in play this week. Do keep in mind that on Monday, the ISM Index report comes out. It is anticipated to be 47.2%. Last month it was 46.5% and if it comes in lower than that, it would be a negative catalyst. Above 50% would be a positive catalyst. On Friday, the JOBS report comes out. It is anticipated to be at 200k. Last month it came in at 12k and a lower number would be negative to the market. A number above 300k would be a positive catalyst. It is not expected that these reports will surprise, meaning they are not likely to affect the chart picture shown above. HSI Index generated a second red monthly close and closed near the low of the week, suggesting further downside below last month's low at 19054 will be seen this month. On an intramonth basis, the index shows minor support at 18829 and decent at 18235. Having said that, the index generated a positive reversal week and closed in the upper half of the week's trading range, suggesting that further upside above last week's high at 19613 will be seen this week. There is intraweek resistance at 19706 that will likely be seen. If broken convincingly, the chart picture might change. Nonetheless, the probabilities do not favor that scenario, meaning that the probabilities do favor the index getting as low as 18235 at some point this month (another 1180 points lower than Friday's close). The action seen the past 6 weeks does suggest that for now, the bull trend has stopped and that a sideways trading scenario between 18235 and 22500 will be in place for the next 3-6 months. With the index closing the month at 19423, there is a bit more upside than downside to be seen for now. A daily close above 20079 would change the chart outlook. On the opposite side, a daily close below 17989 would change the outlook toward the downside.
GOLD(Feb 2025 chart) generated a red monthly close, which was the first red monthly close in the last 10 month. Nonetheless, it closed slightly in the upper half of the month's trading range, suggesting a slightly higher chance of going above last months high at $2782 than below last month's low at $2560. The Fundamental picture in place right now (Trump bringing higher inflation) favors the bulls continuing the uptrend and the action seen the past few weeks do favor a new support base having been built at $2560. If Gold generates a daily close any day this week above $2724, it will be confirmation that the new support based has been built. Having said that, it is also evident that until Trump takes office, the uptrend is not likely to generate much further upside. The all-time intramonth high is at $2787 and that is likely to get broken, but by a small amount. As such, the probabilities favor Gold trading between $2618 and $2818 for the next 8 weeks. Gold closed on Friday at $2681. OIL generated a relatively uneventful inside month, but it did close red and near the low of the week, suggesting further downside below last month's low at 66.61 will be seen this month. The bulls were supposed to take Oil above the previous week's high at 71.52 but they failed as the week's high was 71.48, which then caused Oil to close on the low of the week. That chart is now heavily favoring the bears but the bears still have to break the intraweek support found at 66.33 to generate automatic selling interest. Oil closed at 68.00 on Friday and will probably go below last week's low at 67.87. If that occurs but the 66.61 level does not get broken and the bulls are able to get above 71.52, the chart will show 4 successful retests of the September low at 65.27 and that will relieve some of the selling pressure. Having said that, the bulls need to get above 78.46 to negate the bear-looking chart. Right now, the chart suggests that a drop down to $60-$62 will be seen sometime over the next 8 weeks.
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Stock Analysis/Evaluation
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CHART Outlooks
Once again, I have no mentions for this week. The outlook remains highly uncertain. Having said that though, I do believe that I will have some mentions next Sunday in the Chinese market. There is still uncertainty in that market (as in our market) but if the Chinese index does what I expect it to do this week, most (if not all) of the potential negatives of the Trump presidency will have been factored into the prices and that market has more potential to the upside than ours does. They are at somewhat depressed prices while the opposite is happening here.
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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 $15,594 using 100 shares per mention Closed out profitable trades for November per 100 shares per mention
NONE
Closed positions with increase in equity above last months close. DD (short) $142 Total Profit for November, per 100 shares. $142 Closed out losing trades for November per 100 shares of each mention.
AAPL (short) $39
NVDA (short) $91 Closed positions with decrease in equity below last months close. NONE Total Loss for November, per 100 shares $130 Open positions in profit per 100 shares per mention as of 12/1
NONE
Open positions with increase in equity above last months close.
BCTX (Long) $17 Total $21 Open positions in loss per 100 shares per mention as of 12/1
LXRX (long) $13
Open positions with decrease in equity below last months close.
SNDL (long) $30 Total $15,430 Status of trades for month of November per 100 shares on each mention after losses subtracted.
Loss of $15,431
Status of account/portfolio for 2024, as of 11/30Profit of $163 per 100 shares.
AAPL made a new all-time intraweek, daily, weekly and monthly high and closed on the high of the month, suggesting further upside above last month's high at 237.81 will be seen this week. There has been no new news to support this rally. The previous all-time high daily close is at 236.48 (seen in October) and the previous one to that close is 234.40 (seen in July). With the stock closing on Friday at 237.33, any confirmed daily close this week below the former would generate a failure signal and suggest the same scenario as was seen the with the all-time high daily close seen in July, would likely occur. The all-time high seen in July, brought about a drop in value of 11.2% and the high seen in October brought about a 5.8% drop in value. If the same thing occurs now, a drop of $28 or of $14 over the next few weeks could occur. Pivotal weekly close support is found at 222.91, which if broken would open the door for a drop down to 197.57, given that such a break would mean the uptrend is over. Any daily close above $240 would suggest further upside is to be seen. AXP generated a new all-time intraweek, daily, weekly, and monthly closing highs and closed near the high of the month, suggesting further upside above last month's high at 307.82 will be seen this month. The stock has more than doubled (from 140.91 to 307.82) over the past 14 months and since the last minor correction, has appreciated in value 38% over the past 4 months, meaning that the stock is likely overdone and ready for a correction of some consequence. The stock closed slightly in the lower half of the week's trading range, suggesting a slightly higher chance of going below last week's low at 302.00 than above last week's high at 307.82 this week. There is no established intraweek support until 281.31 is reached. The 200 10-minute MA is currently at 302.60 and if that line is broken (has not been broken for the past 6 trading days), selling interest will appear. Confirmation of such a break would be to go below last week's low at 302.00. To the upside and using the same intraday chart, a rally above 306.90 would suggest that a new all-time intraweek high will be made. The stock does show a double top on the intraday chart and if 303.20 is broken, a drop down to 298.58 would be the objective based on that "intraday" formation. BCTX got some good news this past week, in the way of announcement that the first patient was given one of the new medicines they have been working on. The news caused the stock to rally and close above the now established indicative weekly close support/resistance level at .864 (closed at .982) that means that the correction is over. The stock shows pivotal weekly close resistance at .984, meaning that if the bulls can generate a green weekly close this Friday, a breakout of note will occur. On a daily closing basis, that level is at 1.24. The 200-day MA is currently at 1.46 and if that line is broken (has not been broken for 14 months), it would be a statement of note. Any daily close below .864 would negate the positive action seen this week. IBM generated a new all-time monthly closing high and closed near the high of the month, suggesting further upside above last month's high at 230.36 will be seen this month. Nonetheless and on an intramonth basis, the stock still has resistance at 237.37. On a weekly closing basis, the all-time high weekly close is at 232.26 and on a daily closing basis, it is at 235.26. With the stock closing on Friday at 227.41, the bulls still have strong obstacles to overcome that are not likely to get enough support from the index market for that to happen. In looking at the daily chart, any intraweek drop below 224.27 would likely be a rally stopper and create a successful retest of the all-time highs, which in turn would bring in new selling interest and likely of some consequence. LXRX made a new all-time low intraweek and monthly closing low and closed near the low of the month, suggesting further downside below last month's low at .73 will be seen this month. The stock did receive what could be positive news, inasmuch as the company announced that the enrollment into a study of diabetic neuropathy pain relief of one of their medicines was more than double what they needed. It is not yet a tangible positive because results of the study are needed to be positive, but the simple fact that there was more than double the interest in the study, means that the medicine if it works, will be strongly popular (by the way, I personally am interest in that as I do have diabetic neuropathy pain myself). The selling interest did stop after that announcement was made, given that the new low was made the previous Friday and that low held up all last week. The high made on Tuesday at .925 (after the report) is now short-term pivotal resistance. The .70 level is psychological support. Probabilities do favor the stock getting back up to at least the 1.12 level sometime this month. SNDL did nothing this week as a rally above 2.06 or below 1.92 was needed to generate action and the high of the week was 2.06 and the low was 1.92. Nonetheless, the stock closed on Friday at 1.93 and the probabilities do favor it going below 1.92 this week and if that happens, a drop down to 1.81 is likely to be seen. A drop below 1.75 would change the chart in favor of the bears. The 2.06 level remains short-term pivotal. VWDRY rallied this past week and closed on the high of the week, suggesting further upside above last week's high at 5.15 will be seen this week. The bears failed to break the pivotal 4.50 level and that does increase the chances that a low to this move down has been found. The stock did generate a failure signal against the bears, having closed above the 5-year weekly closing low at 4.77 that was broken last week with a close at 4.58 (closed on Friday at 5.14). The stock did generate a buy signal on the daily closing chart but more is needed before it can be said that the downtrend is over. A daily close above 6.13 is required for that to happen. Having said that, the probabilities do favor the stock trading between 4.80 and 6.00 for the next 8 weeks. Any drop below 4.50 would negate this scenario and open the door for a drop down to 4.10-4.20. ZLAB generated an uneventful inside month but did close in the upper half of the month's trading range, suggesting further upside above last month's high at 32.48 will be seen this month. The stock did close green and on the high of the week, suggesting further upside above last week's high at 29.22 will be seen this week. The green close makes the previous week's low weekly close at 26.43, into a successful retest of the 100-week MA (currently at 26.18). This is indicative as that line had not been broken to the upside for 3 years and now it has 6 weeks above the line and now a confirmed retest of it. Pivotal weekly close resistance is at 32.37, which if broken, opens the door for a rally to the $40 level. Daily close support is now found at 26.40, which should not be broken.
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1) ZLAB - Averaged long at 65.50 (7 mentions). No stop loss at present. Stock closed on Friday at 28.85. 2) ENG - Averaged long at 18.30. No stop loss at present. Stock closed on Friday at 1.34. 3) VWDRY - Averaged long at 8.68 (4 mentions). No stop loss at present. Stock closed on Friday at 5.14. 4) LXRX - Purchased at .93 Averaged long at 1.513 (6 mentions). No stop loss at present. Stock closed on Friday at .803. 5) BCTX - Purchased at .775. No stop loss at present. Stock closed on Friday at .982. 6) SNDL - Averaged long at 9.05 (2 mentions). No stop loss at present. Stock closed on Friday at 1.93. 7) IBM - Shorted at 218.74. No stop loss at present. Stock closed on Friday at 227.41. 8) AXP - Averaged short at 252.16 (3 mentions). Stock closed on Friday at 304.68. 9) AAPL - Shorted at 227.57. No stop loss at present. Stock closed on Friday at 237.33. 10) AAPL - Shorted at 233.06. Covered shorts at 233.45. Loss on the trade of $39 per 100 shares.
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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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