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Issue #888 
November 24, 2024 , | Newsletter
The newsletter with chart analysis for stocks and stock indexes |
Stock Indexes Analysis/Evaluation
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| Short-term pivotal week ahead.
DOW Friday Closing Price - 44296 There is very little new to talk about this week. The bulls remain in control but the future remains uncertain due to the new presidency that promises big changes but successful execution and/or results of those changes is unclear. In looking at the charts, two tangible things in favor of the bulls occurred. The DOW made a new all-time high weekly close and the RUT made a new 36-month high and was the leader of all indexes, with it more than doubling the percentage gain of the 2nd best index this week, which was the DOW. Having said that, none of the indexes went above the intraweek highs made 2 weeks ago, meaning that in spite of the gains seen this week, the possibility of some chart building support and consolidation action might be occurring. The all-time intraweek highs are as follows: DOW at 44486, in the SPX at 6017, in the NASDAQ at 21182 and in the RUT and made 3-years ago, at 2458. All of these levels will be in play this week and all are short-term chart indicative, from the point of view that if the bulls fail to break those levels, more chart-support building (that includes some short-term correction action) will occur. This week there are 2 days only where any reports that could have an effect on the market come out. On Wednesday, the Consumer Confidence report comes out (expected to be 113) and the FOMC meeting minutes from the last meeting. The former number is the most important of the two but neither is likely to be catalytic. On Thursday, the PCE number comes out (expected to be .2%). This report is also not likely to be catalytic as it would have to be substantially higher (like above .4%) to have any catalytic power and the chances of that occurring are very low. This does mean that this week it will be all about charts and the all-time intraweek highs (made or failure to make). Here are the "intraday" support levels, which if broken to the downside, could cause some new selling to occur. Keep in mind that these intraday levels are not pivotal to the overall picture, they are just momentum buster that "could" turn the tables around for a few days. This "could" mean that "perhaps" there would be sufficient incentive to change things around given everything mentioned above. In the DOW, that level is at 43864, in the SPX that level is at 5944, in the NASDAQ that level is at 20655, and in the RUT that level is at 2364. That (all above) is what this week is all about. Uncertainty reigns but the bulls are in control and there is nothing fundamental at this time that can wrest that control away. The only thing the bears have as ammunition is "fear" of the future and the lack of support below, making purchases here very risky (bad risk/reward ratios). HSI received disappointing earnings on Tech stocks on Friday and broke all close-by weekly close supports, suggesting anywhere from 500-750 points lower is to be seen (unless the Chinese government does something to change the negative picture, which includes doing something that would combat Trump raising tariffs as much as 60% on Chinese imports). The break of this area of support does mean that the previous uptrend has ended and that the high made 8 weeks ago at 23241 is now a top until the fundamental picture changes. Having said that, the China trade is no longer as dependent on the U.S. as it once was, meaning that the downside is likely limited and as such, the percentage drop that the charts suggest will happen will not be more than 2-4% from the present price. The next weekly close support area is at 18746 (480 points lower from Friday's close) and then at 18365 (750 points lower than Friday's close). The latter level is not likely to be broken (based on the already negative expected changes happening). Having said that, the expected trading range to be seen between now and Jan 21st (when Trump takes office) is between 18400 and 20400 (based on the monthly closing chart) and with the index closing slightly in the lower half of that trading range on Friday and the monthly close occurring this Friday, it suggests that starting in December, the index (and Chinese stocks) will rally over 10% in the following 8 weeks. Any confirmed daily close above 19636 this week, would negate this outlook for now.
GOLD(Dec 24 chart) bears were unable to generate follow through to the downside and the bulls took advantage of that to close green, above the previous week's high and a close on the high of the week, suggesting further upside above last week's high at $2718 will be seen this week. The main reason for the bear failure was the increasing war between Russia and Ukraine that now also has the possibility of nuclear weapons being used. As such, Gold being a dependable safety net for such situations, rallied. Chart-wise, Gold did generate a failure signal against the bears and did generate a small short-term buy signal on the daily chart, that suggests that this week Gold could generate a retest of the all-time high (or even a new high if the problem between Russia and Ukraine gets worse - unlikely but possible). Chart resistance of some consequence is found on the daily closing chart at $2747 ($30 higher from Friday's close). Daily close support is found at $2676 ($41 below Friday's close), which if broken would negate the action seen this past week. OIL bulls negated the break of weekly close support that occurred the previous week, having closed above the previous and short-term pivotal weekly close support at 67.67 (closed on Friday at 71.18). The reason for the negation were basically the same as with Gold (world tensions increasing across the board). Nonetheless, the negation of the break was not as potentially bullish as they are for Gold, meaning that in Oil, the bears remain with the overall edge. Even though Oil made a break of weekly close support the previous week, on an intraweek basis, support had/has not been broken. The pivotal intraweek support is found at 65.27 and there have been 2 previous occasions that the support was tested successfully with lows at 65.99 and at 66.32. If Oil does go above last week's high at 71.50 (probable), last week's low at 66.56 will become the 3rd successful retest of the low. If that is then followed by a break of the previous intraweek high at 72.41, then the bulls will get a short-term edge and a $76 objective. Having said all of the above and presuming no fundamental changes occur, Oil is likely to trade for the next few weeks between 68.18 and 73.52, based on the daily closing chart. A daily close above 75.56 or below 66.92 will change the chart picture.
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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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Closed Trades, Open Positions and Stop Loss Changes |
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AAPL generated a green week and a new 3-week high. It did close near the high of the week, suggesting further upside above last week's high at 230.72 will be seen this week. Having said that, the bulls did not accomplish anything as weekly close resistance is found at 230.54 and the stock closed at 229.87. In addition, the stock made a new all-time intraweek and weekly closing high 8 weeks ago at 237.59/235.00 and that high needs a successful retest before the bears can generate enough interest to short, and this rally has now set up that scenario (if it fails to make a new high). Intraweek and daily close resistance is found at 233.00 (a level that should not be broken if the retest is to be successful). Any daily close below 225.00 would now make that retest a fact. AXP generated a positive reversal week, having gone below the previous week's low and the making a new all-time intraweek and weekly closing high. The stock closed on the high of the week, suggesting further upside above last week's high at 301.92 will be seen this week. Citi Group upgraded their upside objective to $305 and that is what caused Friday's rally from $292 to $302 to occur. Last week's intraweek low at 281.31 has now become the new short-term pivotal support. Since the stock made the original new all-time high back in January (above the previous high at 199.55), the stock has increased in value 51% and has had 32 up weeks and 11 down weeks, of which the last 11 weeks have been 9 green and 2 red. The stock is overbought and ready for a correction of consequence (the last one was only 4.4%). Having said that, right now the bulls are in full control and likely to reach the $305 Citi Group objective this week. In looking at the 10-minute intraday chart, a confirmed 10-minute chart close (20-minutes in a row) below 300.01 would take ammunition away from the bulls and a confirmed 10-minute chart close below 299.24 would stop the rally and set the stage for a drop down to 293.00. A daily close below 285.55 would generate a sell signal on the daily chart that would project the $276 level as the minimum downside objective. BCTX generated a key reversal week, having made a new 9-week intraweek low but then closing green and above the previous week's high. The stock closed in the upper half of the week's trading range and further upside above last week's high at .82 is expected to be seen this week. The company did announce that they had dosed their first patient with their revolutionary Metastatic Breast Cancer drug, opening the door for a successful Phase 3 test of the drug. The green weekly close made the previous week's close at .595 into the 2nd successful retest of the all-time low weekly close at .5594, increasing the chances that a bottom has been formed. Daily and weekly close resistance is found at .864 and pivotal longer term resistance is found at .982. Any daily close below .571 would negate all of the above. Stock closed on Friday at .729. IBM generated a spike up rally that generated an 8.7% increase in price over the previous week's close. The company did receive some positive news in the form of cloud-based updates on products related to the company. The stock closed near the high of the week and further upside above last week's high at 227.20 is expected to be seen this week. The stock did get "into" the down gap created on October 24th between 230.26 and 221.37 but did close on Friday in the lower half of the day's trading range, suggesting the first course of business on Monday will be to the downside and below Friday's low at 220.89. There is intraweek support at 215.80 and daily close support at 213.72 that at this time (this week) should not be broken, meaning that consideration should be given to covering shorts at one of those levels (if reached). There is daily close resistance at 223.43 that if broken, there is open air above to 232.20 (stock closed on Friday at 222.97). LXRX made a new all-time low intraweek and weekly closing low at .73/.863 but did rally enough from the intraweek low to close slightly in the upper half of the week's trading range, suggesting a slightly higher possibility of going above last week's high at 1.00 than below last week's low at .73. The stock generated a key positive reversal day on Friday, having made the new all-time intraweek low on that day and then closing green and on the high of the day, suggesting the first course of business on Monday will be to the upside and above Friday's high .89. The move on Friday was somewhat indicative as the stock had gone straight down every day (without ANY buying interest) since the earnings report came out 8-days prior. This does strongly suggest that the new all-time weekly closing low at 1.01 will be tested this week to see if the break of support is confirmed or negated. This does suggest that this Friday, the stock will be trading at that price for most of the day. On an intraweek basis, there is no resistance until 1.345 is reached and on a daily closing basis, there is no short term resistance until 1.19 is reached. Any daily close below .77 would negate all of the above. Stock closed on Friday at .863. SNDL generated a positive reversal week, having made a new 4-month intraweek low but then closing green. Nonetheless, the stock closed in the exact middle of the week's trading range, suggesting equal chances of going above last week's low at 1.92 or going above last week's high at 2.06. There has been no new news, meaning that this week is all about the chart. The stock traded all week around the 200-day MA, currently at 1.99, meaning that a rally above or below last week's trading range will be short-term indicative. VWDRY made a new 56-month intraweek low and a new 72-month weekly closing low and closed on the low of the week, suggesting further downside below last week's low at 4.51 will be seen this week. On an intraweek basis, there is support at 4.50 but if broken, there is open air to 4.20 (minor intraweek support) and then at 4.06-4.10 (minor to decent intraweek support). Intraweek resistance is now minor to decent at 4.95. The Trump presidency has changed the fundamental outlook to negative for now and that will not have a chance to change to positive until after Trump takes office and tangible actions occur (one way or the other). As such, the chances of this stock being in a $4-$5 trading range for the next 2 months is high. ZLAB generated a new 6-week intraweek low and a new 7-week weekly closing low but did close near the high of the week, suggesting further upside above last week's high at 26.91 will be seen this week. The negative fundamental issue of the $2 million new stock sale at $25.50 to raise additional funds for advertising its products is now finished and that downside magnet is now gone, suggesting this correction is now over. The continued weakness in the Chinese index will be a burden but it is evident that the company itself does have a positive short-and-long term outlook, meaning the Chinese index going down is not likely to affect the stock for further downside, just keep the upside limited for the next week or two. There is minor intraweek resistance at 27.37 and at 28.80 and then minor to perhaps decent at 29.64. Pivotal intraweek resistance is found at 32.68. Pivotal intraweek support is found at last week's low at 24.85. Probabilities favor the stock moving up to the 29.64 level this week or next and then breaking out with a 3-month objective of reaching the $40 level.
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1) ZLAB - Averaged long at 65.50 (7 mentions). No stop loss at present. Stock closed on Friday at 26.43. 2) ENG - Averaged long at 18.30. No stop loss at present. Stock closed on Friday at 1.36. 3) VWDRY - Averaged long at 8.68 (4 mentions). No stop loss at present. Stock closed on Friday at 4.58. 4) LXRX - Purchased at .93 Averaged long at 1.513 (6 mentions). No stop loss at present. Stock closed on Friday at .863. 5) BCTX - Purchased at .775. No stop loss at present. Stock closed on Friday at .595 6) SNDL - Averaged long at 9.05 (2 mentions). No stop loss at present. Stock closed on Friday at 1.98. 7) IBM - Shorted at 218.74. No stop loss at present. Stock closed on Friday at 222.97. 8) AXP - Averaged short at 252.16 (3 mentions). Stock closed on Friday at 301.30. 9) AAPL - Shorted at 227.57. No stop loss at present. Stock closed on Friday at 229.87.
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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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