Issue #921
Jul 27, 2025 , | Newsletter
The newsletter with chart analysis for stocks and stock indexes |
Stock Indexes Analysis/Evaluation
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| Important and likely short-term indicative week is here.
DOW Friday Closing Price - 44491 Once again and for the 4th week in a row, the SPX and the NASDAQ made new all-time intraweek and weekly closing highs, and closed on or near the highs, suggesting further upside above last week's highs (SPX at 6388 and NASDAQ above 23326) will be seen this week. The DOW got within 57 points of the all-time intraweek high and closed within 9 points of the all-time high weekly close, meaning that the bulls have more to do this week to accomplish a breakout. From a fundamental view of the market, this coming week does have some important and possibly pivotal reports, with the Fed announcing their rate decision on Wednesday July 30th (at 2:00pm), META announcing earnings that same day after the market close, AAPL and AMZN reporting earnings on Thursday afternoon, and the ISM Index reporting on Friday morning at 10:00am. In addition, Trump has announced that on Friday (August 1st) he will announce the new tariff changes. These reports could generate new buying or selling interest of some consequence. In addition to the above, the monthly closes occur on Thursday, and though at this time it does seem that those closes are highly likely to suggest further upside will be seen in August, it does bear mentioning that seasonally August is a down month. With all the indexes now in a highly overbought condition and with the price-to-earning ratio (P/E) at all-time record highs, the scenario is set for something of indicative consequence occurring starting this week. Evidently the index to watch is the DOW as the index is on the edge of a breakout. The dichotomy between the index and the NASDAQ did begin to shift back at the beginning of the week but then it reversed, with the DOW rallying 1.3% and the NASDAQ rallying 2.9% by the end of the week. With the latter having 3 of its major companies reporting earnings this week, that dichotomy could be the sign the traders need to continue higher or begin a correction phase. In looking at the intraweek lows, last week's low are short-term pivotal. If broken, computer and algorithm selling will kick in. Last week's lows in the indexes were DOW at 44272, in the SPX at 6281, NASDAQ at 22953 and in the RUT at 2224. That is it for this moment. This week is all about earnings and economic reports. Those are likely to be the indicative factors in play. HSI Index made a new 46-month intraweek and weekly closing high and closed in the upper half of the week's trading range, suggesting further upside above last week's high at 25846 will be seen this week. There is quite a bit of established weekly close resistance between 25727 and 26161 and on a monthly closing basis, at 25752 (index closed on Friday at 25388). Like with the U.S. indexes, the HSI is also strongly overbought and likely to be ready for a correction. There are no pivotal economic reports due out this week, suggesting that it is highly likely to be an up week but then in August, a correction occurring. Presently, there is no level of intraweek support close by, meaning that this week is not likely to be eventful.
GOLD(Aug 2025 chart) generated a negative reversal week and closed near the low of the week, suggesting further downside below last week's low at $3325 will be seen this week. If Gold does go below last week's low this week, the chart will show 2 successful retests of the all-time intraweek high at $3492. Gold does have pivotal intraweek support at $3250, which if broken, would strongly suggest that a top has been found. The daily and weekly closing charts now show a potential Head & Shoulders formation, which if broken (a daily or weekly close below $3287, would offer a downside objective of $3120 (on a closing basis). Indicative daily close resistance is now found at $3399. Gold closed on Friday at $3335. OIL generated an uneventful inside week but did close red, meaning that the weekly close resistance at 67.04 (seen 3 weeks ago) has not only been confirmed (as short-term indicative and pivotal resistance) but strengthened. This does mean that the probabilities now favor the bears and possibly for a decent move down. Short-term pivotal weekly close support is found at 64.07 and mid-term pivotal at 58.29. Any daily close above 68.25 would negate this outlook.
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Stock Analysis/Evaluation
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CHART Outlooks
I looked for the same thing as last week (companies reporting earnings this week), which turned out so well last week. but among the potential 8 of them (of any consequence), I could not find one that offered a good risk/reward ratio or a chart that leant in one direction of the other. As such, I have no mentions for this week. I do expect to have a few for next week.
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Updates
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Closed Trades, Open Positions and Stop Loss Changes |
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BCTX generated a totally uneventful inside week that had a $.06 trading range and a close at the same level as the previous week. In looking at the "intraday" 10-minute chart, a rally above .84 will generate some buying interest. Evidently, resistance will now be found at 1.25 (share dilution price) and the all-time low at .69 (after the announcement of dilution of shares) is pivotal support. This stock is no longer tradeable for the short-term, but it is a buy and hold product (if you believe in the fundamental outlook for the drug). LXRX generated a relatively uneventful inside week but it did close red and on the low of the week, suggesting further downside below last week's low at 1.08 will be seen this week. The target seems to be a retest of the breakout level at .99/1.01. If that retest is successful (likely) new buying will be seen with a 2.03 target (200-week MA). Any confirmed daily close below .99 will negate the breakout and bring in new selling interest. Buying additional shares around 1.01 is an action that should be considered. TCEHY generated a new 4-year weekly closing high and closed near the high of the week, suggesting further upside above last week's high at 70.94 will be seen this week. The intraweek high seen 4 months ago at 71.82 was not broken and as such, is still considered resistance. If broken, the next Intraweek resistance of some consequence is found at 72.90. There is a weekly gap down at 73.84 from June 2021 that is potentially a magnet. Nonetheless, with the Chinese index also close to indicative resistance, which is not likely to be broken at this time, it does suggest the gap will also not be closed at this time. On a monthly closing basis (Thursday), the stock shows indicative resistance at 71.89. On a weekly closing basis (Friday), there is also indicative resistance between 69.85 and 70.32, meaning that since the stock closed this past Friday at 70.18, this week is looking to be short-term indicative. Probabilities slightly lean in the favor of the bears. On a daily closing basis, the previous multi-year high was 69.79, so a confirmed daily close below that level would generate a failure signal against the bears. Overall and considering the next 4-6 weeks, a drop down to as low as $60 could be seen. Then again and on a weekly closing basis, there is support at 63.84. This is a stock that should now be considered for covering of the short positions, with the question being "at what price?". VWDRY generated a 2nd failure signal against the bears having closed below another important and pivotal support at 6.51 (closed at 6.54). Nonetheless, a close by only $.03 cents is not dependable. Having said that and in looking at the daily closing chart, the stock had a short-term indicative failure signal against the bears when it closed above the 6.01 level and that mini breakout was tested successfully on Monday and a more indicative failure signal (on the same chart) was given when it closed above 6.37 low daily close seen in October 2023. In addition, the stock also gave a new buy signal on Thursday when it closed above a minor but indicative daily closing high at 6.51, which was confirmed on Friday. Overall, the bulls have accomplished quite a bit, suggesting more upside is to come, with potentially the 200-week MA (currently at 8.05) being the target. Any daily close below 5.94 would now negate all of the above. YUMC generated a new 16-week intraweek and weekly closing high but then proceeded to close in the lower half of the week's trading range, suggesting further downside below last week's low at 47.24 will be seen this week. The stock did generate a new buy signal, as well as a break of the 200-week MA (currently at 47.61) when it closed on Friday at 47.85. Then again, the buy signal and break of the MA line were only by $.25 and considering the weakness seen at the end of the week, those signals were not necessarily the kind of a statement the bulls wanted to achieve. On an intraweek basis, the 46.25 level is short-term pivotal support. To the upside, there is no close by intraweek resistance, though going above last week's high at 49.37 would give the bulls further ammunition for a rally as high as 51.44 being probable. The 200-day MA is currently at 46.70 and given that the stock has traded above that line for the past 15 trading days, means the probabilities favor the bulls. ZLAB did not follow through to the downside (as expected by the previous week's close) and did generate a green weekly close, a close in the upper half of the week's trading range, suggesting further upside above last week's high at 38.77 will be seen this week, as well as a close above the 200-week MA, currently at 34.45 (closed at 37.17). On the daily closing chart, the stock did generate a new buy signal (having closed above 3-previous daily closing highs seen over the past 6 weeks). All in all, it was a positive for the bulls that did give the edge back to them. Having said that, this is (at this time) short-term positive but not entirely meaningful yet. Short-term pivotal daily close support is now found at 36.01 and to the upside, it is found at 38.35. Probabilities favor the stock trading within that range this week. An intraweek break above 39.77 would give the bulls new ammunition.
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1) ZLAB - Averaged long at 65.50 (7 mentions). No stop loss at present. Stock closed on Friday at 37.17. 2) VWDRY - Averaged long at 8.68 (4 mentions). No stop loss at present. Stock closed on Friday at 6.54. 3) LXRX - Averaged long at 1.513 (7 mentions). No stop loss at present. Stock closed on Friday at 1.10. 4) BCTX - Averaged long at 7.825 (2 mentions). Stock closed on Friday at .798. 5) TXN - Covered shorts at 187.88. Averaged short at 194.95 (3 mentions). Profit on the trade of $2121 per 100 shares (3 mentions. 6) YUMC - Shorted at 44.37. No stop loss at present. Stock closed on Friday at 47.85. 7) TCEHY - Shorted at 66.15. Stop loss is at 66.37. Stock closed on Friday at 70.18. 8) GM - Shorted at 54.20. Covered shorts at 50.15. Profit of $405 per 100 shares. 9) IBM - Shorted at 287.65. Covered shorts at 254.21. Profit of $3344 per 100 shares.
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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