Issue #844
January 14, 2024 , | Newsletter
The newsletter with chart analysis for stocks and stock indexes |
Stock Indexes Analysis/Evaluation
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| Mixed signals were given this past week, with indexes going higheer but key stocks showing weakness!
DOW Friday Closing Price - 37592 The bulls won the week but did it in a very haphazard way given that the DOW only went up .04% over the previous week's close and failed to make a new all-time intraweek or weekly closing high, the SPX rallied 1.8% above the previous week's close and did make a new all-time weekly closing high but failed to make a new intraweek high or even a new all-time daily closing high at 4796, the NASDAQ rallied 3.2% above the previous week's high, made a new all-time weekly closing high but then only by 7 points but did not make a new all-time intraweek high (fell short by 69 points), and the RUT fell .0001% from the previous week's close and failed to negate the failure signal against the bulls generated the previous week. Simply stated, there was no unison seen in the index market last week. This does suggest that general confusion reigns. The SPX and the NASDAQ closed near the high of the week, suggesting further upside above last week's highs (SPX above 4799 and NAZ above 16900) will be seen this week. The DOW closed slightly in the upper half of the week's trading range, suggesting a higher probability of going above last week's high at 37825 than below last week's low at 37249 and the RUT closed near the low of the week, suggesting further downside below last week's low at 1932 will be seen this week. This week there are no possibly catalytic reports scheduled. On Monday morning, GS and MS are due to report earnings, on Wednesday, the Retail Sales report comes out and on Friday the Home Sales report comes out. None of these is likely to affect the market in any indicative way. This means that this week is likely to be all about charts. The SPX will be at the front of the chart picture. First of all, GS reports on Monday and given that it is the biggest company in the banking industry, it may have some effect on the index. The all-time intraweek high in the index is at 4818 and the bulls are committed to making a new all-time intraweek high if they have any plans to continue to go higher. From a chart perspective, the bulls need to do this "and" close above 4796 next Friday for confirmation that the new all-time weekly closing high is valid. With the index closing on Friday at 4783, the bulls need to get the index up by more than 35 points at some point in the week and they also need to get more than 15 points higher (on a daily closing basis) to confirm the new highs across the board. None of the other indexes have any reports scheduled for this week or are in a situation where their chart actions will be all that meaningful. This means that all eyes will be on the SPX this week. By the same token, the NASDAQ has also put itself in a situation where the bulls cannot afford "any" red daily closes this week, before making a new all-time high daily close. The index has generated 7 green daily closes in a row and finds itself just 74 points away from making a new all-time high daily close above 16969. Any red daily close at this time would mean that the all-time high daily close will have gotten a successful retest of it and that will bring some new selling interest. If that happens and a break of 16554 occurs, it will weaken the chart and a daily close below 16282 would generate a sell signal of consequence. As far as the downside is concerned, any daily close in the DOW below 37082, in the SPX below 4688 and in the NASDAQ below 16282, would mean the rally is over. I do not believe any of these levels will be in play this week, but they are important for any week from here thereafter. I continue to believe that the bears are going to win out when it is all said and done but the reality is that right now, the bulls have the upper hand and the onus of proof is in the shoulders of the bears. There are no signals that have yet been given that would give the bears any kind of an edge. As such, my opinion is pure speculation on my part.
OIL generated an uneventful week though at one point and due to news, the bulls did have the chance to make some sort of positive short-term statement. On Friday, Oil was up over $3 at one point (at 75.25) and was trading above the 73.81 level of daily close support, which if broken would have given the bulls some new ammunition and close to the 75.57 level which would given a new and indicative buy signal. Nonetheless, Oil sold of to close at 72.68 and make the week totally uneventful. On an intraweek basis, Oil now has a $7 trading range (between 76.18 and 69.28) where no signals of any kind can be given. On a daily closing basis, the trading range is 75.57 and 70.38. Having said that, there is nothing clear about what could happen this week.
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Stock Analysis/Evaluation
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CHART Outlooks
MENTIONS
I have no new mentions this week as the reports last week did not clear up the picture (as expected). I did enter two of the mentioned shorts and did give a new short mention (RBLX) on the message board and all of these positions did end up the week with a profit being seen. Nonetheless, more negative signs need to be given before additional short positions are put on. If those do occur during the week, I will give them on the message board.
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Updates
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Closed Trades, Open Positions and Stop Loss Changes |
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ENG made a new all-time low at .2085, below the previous one at .2135 and closed on the low of the week, suggesting further downside below last week's low at 1.66 will be seen this week. Nonetheless, there is a small mountain of support between 1.62 and 1.64 that should not be broken. The company does not report earnings for another 3 weeks and the charts do not suggest any movement of consequence will occur until then. Evidently, a rally above 2.00 would be a positive and a weekly close below 1.66 a short-term negative. GCI generated a negative reversal week, having gone above the previous week's high and then closing red and near the low of the week, suggesting further downside below last week's low at 2.26 will be seen this week. Having said that, the red close was only by $.01 cents and as such and from a weekly closing basis, the week was uneventful. It is important to note that the 200-day MA is currently at 2.31 and the stock has stayed above that line (on a daily closing basis) for the past 19 trading days. The bulls need to keep that trend alive. Some intraweek resistance is found at 2.54 and pivotal at 2.62. A drop below 2.24 would weaken the chart. INTC generated an uneventful inside week but did close near the low of the week, suggesting further downside below last week's low at 46.61 will be seen this week, There has been no news and a such, the action being seen seems to be mostly about retesting the important and indicative breakout at $45. This area between 44.57 and 45.04, based on the weekly closing chart, is highly pivotal. In addition, the 200-week MA is currently at 44.95, giving the area additional support. As long as the bulls can stay above this level, the $55 - $63 level will remain the upside objective. Two weeks ago, the stock did gap down from 49.77 and there is no news to support the gap, meaning that it is possible we could see both 44.95 and 49.77 this week. Any daily close below 44.94 will weaken the chart. LXRX generated a failure signal on both the daily and weekly closing charts, having closed below the breakout point at 1.48. The stock closed on the low of the week and further downside below last week's low at 1.33 is expected to be seen. Having said that, the intraweek low of the week was made on Monday and was followed by 4 red daily closes that did not generate any new low. In addition, there has not yet been a retest of the recent high at 1.67, with this all suggesting that this is not yet a significant failure signal but likely a sign that the traders will wait until the earnings report comes out on February 7 to make longer term decisions. Short-term intraweek pivotal support is found at 1.20 and the same as resistance at 1.51. Probabilities favor the stock trading in this range until the earnings report comes out. MMM generated an uneventful inside week but closed near the low of the week, suggesting further downside below last week's low at 107.21 will be seen this week. The 107.79 level and the 107.52 level are important daily and weekly closes support, which if broken would give a failure signal against the bulls. If those are broken, a drop down to the $100 level would likely be seen. A daily close above 109.32 would shift the probabilities back to the bulls. PLNH generated another green weekly close and closed on the high of the week, suggesting further upside above last week's high at .808 will be seen this week. A second buy signal was given on the daily chart, having made a new 5-week daily closing high. Having said that, the bulls need to do more to generate additional buying interest. The bulls need to generate a daily close above .8827 in order to get new buyers to come in. Intraweek support will now be found at .657. RBLX confirmed the failure signal against the bulls with another weekly close below the previous high weekly close at 43.00, which when broken caused a rally to 47.20 to occur. There is minor intraweek support at 39.20 and then nothing until 37.19 is reached. The 200-day MA is currently at 37.10 and that is now a magnet, given that a sell signal was also given on the daily chart, having broken the 4-week daily closing low at 41.74 on Friday (closed at 40.92). Any rally above 42.97 would now negate this downside picture. Stop loss should be at 33.07. TOL made a new 2-week high last week but then turned around to close on the low of the week, suggesting further downside below last week's low at 100.87 is expected to be seen this week. If that does happen, a required/needed retest of the all-time high at 105.91 will occur. If a break below the recent intraweek low at 97.42 is seen, confirmation of a top will be given and will open the door for a drop down to the previous all-time daily closing high at 83.83 to be seen. Stop loss should now be at 104.65, given that a break above 104.55 will give new ammunition to the bulls. VWDRY generated a second red weekly close, as well as a break of the 200-week MA, currently at 7.84. Nonetheless, neither action was convincing as the red close was only by $.14 cents and the break of the MA line was only by $.09 cents. Having said that, it does mean that the bulls are forced to generate a green weekly close next Friday or face further downside, likely down to at least 8.77. Short-term pivotal resistance is now found at 10.09. ZLAB generated a new 13-week intraweek low and in the process, broke the daily and weekly close support at 25.30, which does give the edge back to the bears. There was no news to support this break and the Chinese index was not the reason either, given that the index held support this past week. As such, this break is likely to be chart oriented as there is an open gap at 24.34 that evidently the traders want to be closed. The stock did close on the low of the week and further downside below last week's low at 24.60 is expected to be seen this week. This does suggest that the gap will be closed on Monday. If that does happen and the intraweek support at 23.77 is not broken, a recovery rally is likely to occur. Any daily close above 25.30 will negate the break seen this past week and if confirmed with a weekly close above 25.30 next Friday, the downside target will have been fulfilled and new buying will likely appear. There has been no negative fundamental news coming out recently, meaning this is all chart oriented. A rally above 27.87 would confirm all of the above.
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1) ZLAB - Purchased at 26.80. Averaged long at 65.50 (7 mentions). No stop loss at present. Stock closed on Friday at 24.62. 2) ENG - Averaged long at 18.30. No stop loss at present. Stock closed on Friday at 1.67. 3) VWDRY - Averaged long at 8.67 (3 mentions). Stop loss now at 9.26. Stock closed on Friday at 9.75. 4) LXRX - Averaged long at 1.495 (2 mentions). No stop loss at present. Stock closed on Friday at 1.37. 5) GCI - Purchased at 1.93. Stop loss at 1.60. Stock closed on Friday at 2.32. 6) PLNH - Averaged long at 1.526 (3 mentions). No stop loss at present. Stock closed on Friday at .797. 8) SNDL - Averaged long at 9.05 (2 mentions). No stop loss at present. Stock closed on Friday at 1.48. 9) BORR - Covered shorts at 6.53. Shorted at 7.37. Profit on the trade of $84 per 100 shares. 10) CPRT - Liquidated at 47.74. Purchased at 48.68. Loss on the trade of $94 per 100 shares. 11) INTC - Averaged long at 38.78 (2 mentions). Stop loss now at 37.97. Stock closed on Friday at 47.12. 12) TOL - Shorted at 102.63 and at 104.08. Averaged short at 103.355 (2 mentions). Stop loss at 104.65. Stock closed on Friday at 101.32. 13) MMM - Shorted at 109.95. Stop loss at 113.24. Stock closed on Friday at 108.12. 14) RBLX _ Shorted at 41.56. Stop loss is at 43.07. Stock closed on Friday at 40.92.
Previous Newsletters
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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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