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Issue #942 
Dec 14, 2025 | Newsletter
The newsletter with chart analysis for stocks and stock indexes |
Stock Indexes Analysis/Evaluation
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| Dichotomy in the indexes suggests that the rally is nearing a temporary top.
DOW Friday Closing Price - 48456 This past week, the action seen after the Fed announced the expected rate cut (25 points), as well as the increased difference of opinion among the Fed participants, and then the action and closes on Friday, made the outlook for at least the rest of the year (the next 3 weeks) get clearer. The DOW and the RUT both closed green and made new all-time intraweek and weekly closes and the SPX and the NASDAQ both closed red and failed to accomplish further upside. The dichotomy of this action is a negative to a continuing of the bull market trend that had been seen the past few years, at least until the next round of data, information, and Fed action to be seen in January. As such, it is now expected that for the next 3 weeks the action to be seen will have bearish connotations, though because it is a holiday period and seasonally December is a "slow" month, the negative action is likely to be limited and not entirely indicative of what is likely to happen in the New Year. In fact and on a seasonal basis, January is an up month, especially for small cap stocks, while February is usually a very volatile month with a decent tendency to be a negative month. The RUT rose 1.2% over the previous week's close, meaning that it led the way up. The DOW was close behind with a rise of 1.1%, while the SPX dropped .7% and the NASDAQ dropped 2%. All of the indexes, with the exception of the DOW closed in the lower half of the week's trading range, suggesting further downside is to be seen this week (SPX below 6801, NAZ below 25104 and RUT below 2514). The SPX is always the key index to watch (as far as indicating what the true status of the overall stock market is) and in this case, the index generated several negative signals. On the weekly chart, it generated a failure signal against the bulls, having made a new all-time high weekly close 3 weeks ago, confirming that breakout the previous week, and now closing below the previous all-time high weekly close at 6840 (closed at 6827). On the daily chart, even more negative signals were given, with the index failing (on Friday) to confirm the new all-time high daily close at 6901 made on Thursday (above 6890), and then on Friday generating a sell signal, having closed below the most recent low daily close support at 6840. There was one more daily close support at 6812 that did not get broken on Friday that does suggest/support the idea that for the next few weeks the downside will be limited, but the other signals do support a downside slant for the next 3 weeks. The downside target of the SPX for the next 3 weeks is 6716 (further downside of 1.7%). In the NASDAQ, the downside target is 24785 (also a drop of 1.7%). All of these targets are on a weekly closing basis. On the DOW, the index is likely to get down to the previous all-time high daily close at 48254 (a drop of .5%) and in the RUT, a drop back down to 2521 (1.2%). As far as the upside is concerned, there is no resistance above in either the DOW or the RUT, meaning that they could go higher. In the SPX, resistance on a daily closing basis is now at 6890 and at 6901 and on an intraweek basis at 6920. It is highly doubtful that any of those will be seen though there is a possibility (small) that 6890 is tested. The next few weeks are likely to be boring and not totally clearing up the outlook for next year. Nonetheless, there are still 2 economic reports due out that could change things, if way out of line. On Tuesday, the Jobs report comes out and it is expected to be 40k. The following Tuesday (12/23), the new GDP report comes out and expectations are for it to be 3% (a drop from 3.8%). If the reports are way out of line, this chart evaluation will be somewhat null and void and anything is possible, though the reports due have a higher probability of being out of line for favoring the bears (not the bulls). HSI index made a new 3-week intraweek low but did not break the support at 25145/25178, having made a low at 25231 and then turning around to close near the high of the week, suggesting further upside above 26138 will be seen this week. If that happens and the intraweek resistance at 26254 is broken, there is open air above to 26588. The bears did have a chance to make a statement but failed. The Central Economic Work Conference's policy signals for 2026 meeting did happen this past week and what was decided was helpful to the market, meaning that it is unlikely that further weakness will occur. On the other side of the coin, the bulls also failed to make a statement as well, meaning that the index is now trading sideways with a slightly higher chance of some (but also limited) upside. The levels mention above are both short-term pivotal.
GOLD(Feb 2026 chart) generated a new all-time weekly closing high this past week and closed in the upper half of the week's trading range, suggesting further upside above last week's high at $4387 will be seen this week. On a possible negative note though, the bulls failed to make a new all-time intraweek or daily closing high, meaning they have more to do, before proving that further upside is to come. The all-time daily closing high is at $4359 and the all-time intraweek high is at $4397. Gold closed on Friday at $4328. On the daily closing chart, pivotal support is at $4213, and on the weekly closing chart, it is at $4197. OIL made a new 7-week intraweek low but did close below the 4+ year weekly closing low at 57.54/57.46, with a close on Friday at 57.44. Oil closed near the low of the week, suggesting further downside below last week's low at 57.01 will be seen this week. The fact that the weekly close break was only by $.10 cents and that the 4+ year intraweek low supports at 56.35 and at 55.12 were not broken, does keep the door open for a recovery to occur. There are no scheduled OPEC meetings scheduled over the next few weeks/months, so it is all based on the charts and on the weekly supply and demand reports. Having said that, there is an oversupply of Oil at the present time and the probabilities continue to favor the bears, with the chart supports breaking over the next 3 weeks. Short-term pivotal or indicative resistance is now found at 60.50.
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Stock Analysis/Evaluation
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MENTIONS For this week
I do not believe that much should be traded the rest of the year but I do think that for the next 3 weeks there is going to be a slight slant toward the downside. As such, I did a "little bit" of chart studies on a few stocks and found one stock that gave me a decent probability rating and some clear upside resistance levels and downside targets that could be seen/used for a short-term trade. This is 100% based on charts and is the one mention I have this week.
AAPL Friday Closing Price - 278.28
AAPL made a new all-time intraweek high at 288.62 the previous week but did generate a negative reversal week that week, having closed red and near the low of the week. The stock did see follow through to the downside last week and did close red but closed near the high of the week, suggesting further upside above last week's high at 280.03 will be seen this week. If that occurs, such a move could end up being the required/needed retest of the all-time high and from which selling interest could then be seen.
What makes this a selling probability (rather than continuation of the uptrend), is that the bulls have been unable to generate any further upside on a weekly closing basis, to what was seen 4 weeks ago. The all-time weekly closing high 4 weeks ago was at 278.85 and the following week it was at 278.78 (in spite of the intraweek rally to 288.62) and last week it was at 278.28. As such, the bulls have now failed the past 2 weeks to keep the rally moving forward (on a weekly closing basis). On a daily closing basis, the all-time high is at 286.19 and that high was then followed by a negative reversal day and an additional 7 days of lower prices with 5 of them being red closes.
A rally above last week's high will in fact generate a potential rally to as high as 286.19, but based on the action seen, it is unlikely that level will be reached, meaning that any rally above 280.03 could be seen as a desired entry point.
To the downside and as far as a possible objective, AAPL is likely to test the previous weekly closing high at 255.59. Such a test would not be a bearish sign but simply a normal chart move (within a bull market). This does make that objective very viable.
Stop loss on the trade is 286.31 (on a daily closing basis) and with 255.59 the objective, it means that any entry point above 280.03 would offer a risk of no more than $600 for a profit of $2500 (per 100 shares), making it at least a 4-1 risk/reward ratio. In looking at the 10-minute chart, a rally to 280.85, or as high as 281.14, would keep "that chart" leaning to the downside.
This is not a "high" probability trade as the stock remains overall in a bull uptrend, but it is a trade to consider if you want to do any trades over the next few weeks to make some extra money.
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Updates
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Closed Trades, Open Positions and Stop Loss Changes |
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| BCTX generated a red week and a close on the low of the week, suggesting further downside below last week's low at 9.54 will be seen this week. Nothing was broken on the weekly closing chart but on the daily closing chart, a sell signal, as well as a failure signal were given when the stock closed below 11.39 and below 9.65 (respectively), meaning that further weakening is likely to be seen with a potential objective of testing the 8.00 level, which is where the next indicative support is found. There was no negative news, in fact the limited news that came out was actually positive, meaning that this volatile stock is being played by the day and short-term traders for fast profits. A daily close above 9.65 on Monday would negate the failure signal and any close above the top of the $10 demilitarized zone (above 10.30) would give the bulls some ammunition. GSTRF generated a new 17-day intraweek high and closed near the high of the week, suggesting further upside above last week's high at .3 will be seen this week. On Friday and on the weekly closing chart, the stock closed above several weekly close resistance levels at .26 but not above an indicative and pivotal resistance at .29 (closed at .274). Nonetheless, the bulls did enough to make the previous week's close at .21 into a successful retest of the indicative and established weekly close support at .20. This does take away ammunition from the bears and gives it to the bulls. On the daily closing chart, resistance is found at .288 and short-term pivotal at .336. There was a 3-point downtrend line that is presently at the .22 level that was broken on Wednesday and confirmed as broken the following 2 days. That is a clear sign that the bears have lost control. Any daily close below .22 would negate the break. LXRX generated a short-term sell signal when it closed below the previous low weekly close at 1.34 on Friday (closed at 1.30). It was not an indicative signal as the important and longer term weekly close support at 1.25 was not broken. Nonetheless, that support is likely to be tested this week, given that the stock closed on the low of the week and further downside below 1.29 is likely to be seen. The chart levels are very clear for this week. A daily close above 1.35 will take some ammunition away from the bears and a daily close above 1.42 would give the edge back to the bulls. Any daily close below 1.25 would give the bears control. NB generated an uneventful inside week but did close red and near the lows of the week, suggesting further downside below last week's low at 6.00 will be seen this week. The recent multi-week low at 5.03 has not yet been tested and if the stock does go below 6.00 this week, such a retest is likely to have started or be done. On the daily closing chart, the stock did generate a failure signal against the bulls, having closed on Friday below the daily close breakout level at 6.25 (closed at 6.18). This did take away the ammunition the bulls had gotten and puts the chart back on a chart building basis. There is daily close support at 5.69 that should not be broken. Any daily close above 6.50 would give back control to the bulls. VWDRY continued the uptrend, making yet another new 17-month intraweek and weekly closing high and in the process, generated an indicative failure signal against the bears, having closed above a previous low weekly close at 8.34, which when broken caused the stock to fall to the $4 level. The stock now has open air up to the 9.70 level, from which a small correction back down to the 8.34 level will likely be seen. Pivotal intraweek resistance is found at 10.62, which is broken would open the door for $12. Any daily close below 8.49 would temporarily halt the rally. ZLAB continued the downtrend, making yet another new 15-month intraweek and weekly closing low and closing on the low of the week, suggesting further downside below last week's low at 17.72 will be seen this week. Having said that though, there was some buying interest seen this past week, given that on Friday, the stock rallied to 18.67 and then fell back to the low of the week, which was originally made on Thursday. The Friday rally did take the stock up to the 200 10-minute MA, which had not been broken to the upside for the past 6 trading days, but when they failed to break the line, the bears came back in and the stock fell to the week's low. The bears were able to break an old weekly close support at 18.68 that should have held if the stock was ready to recover. Now, the bulls are facing a pivotal and indicative weekly close support at 16.26, which if broken, would be a big game changer. A drop down to 17.52 is likely to be seen this week but I do expect that level to hold up and a new attempt to stage a recovery rally to ensue. If Friday's high at 18.67 is broken, there is open air above to 19.52. If a daily close above that level occurs, short-term pivotal resistance is found at 20.47.
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1) ZLAB - Averaged long at 65.50 (7 mentions). No stop loss at present. Stock closed on Friday at 17.74. 2) VWDRY - Averaged long at 8.68 (4 mentions). No stop loss at present. Stock closed on Friday at 8.89. 3) LXRX - Averaged long at 1.513 (7 mentions). No stop loss at present. Stock closed on Friday at 1.30. 4) BCTX - Averaged long at 78.25 (2 mentions). Stock closed on Friday at 9.54. 5) GSTRF - Purchased at .42. No stop loss at present. Stock closed on Friday at .274. 6) NB - Purchased at 6.88. No stop loss at present. Stock closed on Friday at 6.18.
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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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