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Issue #915 
Jun 8, 2025 , | Newsletter
The newsletter with chart analysis for stocks and stock indexes |
Stock Indexes Analysis/Evaluation
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| Bulls win week with slightly better than expected economic reports.
DOW Friday Closing Price - 42767 All the important reports this past week (ISM and JOBS) came in slightly better than expected, meaning that bulls continued the recent uptrend, making new 9-week highs across the board. All indexes closed near the high of the week, suggesting further upside above last week's highs will be seen this week (DOW above 42924, SPX above 6016, NASDAQ above 21891, and the RUT above 2132). The NASDAQ finds itself just 1.5% away from the all-time high but at a weekly closing level of decent resistance strength between 21774 and 21780 (closed on Friday at 21761), which if broken this Friday, would totally turn the tables around (chart-wise) on the bears in favor of the bulls. This week, the inflation report comes out and the following week, the Fed rate decision is announced. Inflation is expected to remain the same (2%) with a very slight leaning to a higher number, and the Fed is expected to do nothing (keep rates the same). One thing that could be impactful for the market is that Trump has wanted the Fed to lower rates by 1 full percentage point and has also stated that he will be making a decision on Fed Chief Powell "very soon". All of this could impact the market, with the lowering of interest rates or firing of Powell being strongly favoring the indexes to make new highs. The Tech Industry (specifically AI) has been driving the market recently, with NVDA just 4.5% from a new all-time high weekly close. Having said all of the above, the indexes (more so the SPX and the NASDAQ) are at chart levels that are of indicative resistance. With no negative news expected to come out this week, but the possibility of Trump saying something that will be short-term bullish, the bulls do have the edge. By the same token, these resistance levels are decent and computers and algorithms will be sellers here, meaning that these are the levels to watch. In the NASDAQ, any weekly close above 21780 (21900 on a daily closing basis) will give a mandate to the bulls for a new intraweek high above 22222 to be made. In the SPX and on a daily and weekly closing basis, the 5994-6001 area is the one that if broken (closed at 6000 on Friday), would give the bulls a mandate to test and break the all-time high daily closing high at 6144. The index to watch is definitely the NASDAQ as AI is bullish and leading the charts. The dichotomy between the DOW and NASDAQ should continue, if and when the market is to continue higher. If that dichotomy changes and the DOW begins to lead the way, that could be a sign that things are turning around. To the downside, here are the daily close levels to watch, which if broken would suggest the rally is likely over. In the NASDAQ, that level is 20915, though a break below 21477 would slightly weaken the chart. In the SPX, the pivotal level is 5802. In the DOW that level is at 41603, and in the RUT, that level is at 2045. The fundamental picture as it is seen now, suggests that there are 3 things that need to be watched: 1) is the inflation report on Wednesday, 2) is the Fed rate decision a week from this Wednesday and 3) is Trump's decision on Fed Chief Powell. All are expected to help the bulls, which means that any negative surprise would help the bears. On the other side of the coin, and also overhanging the market right now, are the tariffs (as they are presently), which makes new all-time highs difficult to accomplish. For that reason, the charts are of strong importance this week and next. Given that the inflation report this week is unlikely to be "out of line", probabilities favor an uneventful week with no indicative move in either direction. As such, the following week is likely to be "the one" that decides direction for the summer. HSI Index generated a positive reversal week, having gone below the previous week's low and then going above the previous week's high and closing green and near the high of the week, suggesting further upside above last week's high at 23976 will be seen this week. The week's low at 22660 did get down near a pivotal intraweek support at 22547, suggesting that the bulls not only remain in control but have also strengthened the intraweek support around that 110-point area. On an intraweek basis, there is no resistance above until 24669, meaning that another 850 point higher is the most likely scenario. In looking at the daily chart, resistance is found at 24076 and support at 23198.
GOLD(Aug 2025 chart) generated a new 4-week intraweek high, but then closed near the low of the week, suggesting further downside below last week's low at $3319 will be seen this week. If that does occur, Gold will show 2 successful intraweek retests of the all-time intraweek high at $3492. Having said that, over the past 12 weeks, Gold has built a resistance area of consequence on the daily closing chart, with a double top at $3425/$3422 and 3 successful retests of that area with closes at $3394, at $3397 and at $3399. Such a chart formation is considered strong resistance, which requires well defined positive fundamental news in order to break it. To the downside, a daily close below $3308 would further strengthen the chart in favor of the bears. Gold closed on Friday at $3346. OIL generated a minor buy signal on the weekly closing chart, having closed above the most recent high weekly close at 62.40 (closed at 64.56). Nonetheless Oil did close on the high of the week, suggesting further upside above last week's high at 64.71 will be seen this week. The intraweek high for the past 9 weeks has been 64.86 and if that gets broken this week (likely), there is open air above up to 71.55. Having said that and on a daily and weekly closing basis, there are levels of resistance (from previous low closes) that are important and indicative. On a daily closing basis, the 65.05-65.68 levels represent previous low closes of consequence, which would need to be broken in order for Oil to reach the previous low weekly close at 67.02/67.04 that would generate a failure signal. On the same chart, a weekly close above 68.90 would suggest the $71.50 level would be visited. To the downside, a daily close below 60.79 would negate all of the above. The fundamental picture has not changed much, meaning that this outlook is not reliable/dependable.
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Stock Analysis/Evaluation
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CHART Outlooks
Under the present scenario, the only thing that makes any sense to do is to short positions. Nonetheless, shorting anything right now is a gamble (not a probability trade), given the uncertainty that Trump's words and actions regarding the future of Fed Chief Powell staying on as head of the Federal Reserve provide. This is likely to be resolved during the next 8 trading days, but for now, I am not providing any mentions.
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Updates
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Closed Trades, Open Positions and Stop Loss Changes |
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AAPL generated a 2nd green weekly close but it was an uneventful week, given that no resistance levels on any chart were broken. On the daily chart and on an intraweek basis, the short-term levels of pivotal support and resistance are clear. To the downside, support is found at 193.75 and to the upside, resistance is found at 214.50. Whichever gets broken first, movement of some consequence will occur. Presently and across the charts, the bears have the edge. BCTX generated an uneventful week, having closed at the same price as the week before and in the middle of the week's trading range, suggesting equal chances of going above last week's high at 3.69 or below last week's low at 3.23. It is important to note that just 16 months ago, the stock was averaging weekly trading ranges of over $10, last year, it was averaging weekly trading ranges of $5 and this year, it has been averaging trading ranges of $.50 cents. This is suggestive that the sellers have lost control and that the stock is building a support base from which to start generating an uptrend. A weekly close above 3.47 (3.55 on a daily closing basis) would likely start the process. A daily close below 3.07 would negate this outlook. Stock closed on Friday at 3.44. LXRX generated a new 4-month high daily and weekly close, and a new 3-month intraweek high, and closed on the high of the week, suggesting further upside above last week's high at .794 will be seen this week. There is now open air up to the .96/.97 level, where the 200-day MA is currently at, as well as the previous intraweek high. A close above those 2 levels would offer a rally up to at least 1.09. To the downside, the .61 level is now pivotal intraweek support. Nonetheless and considering the breakout that occurred, the .73 level (on a daily closing basis) should now offer support. MMM generated a negative red week, with a close near the low of the week, suggesting further downside below last week's low at 143.91 will be seen this week. The weakness that occurred in spite of the strength seen in the index market, is a negative sign. Then again, pivotal weekly close support is found at 144.98, and it was not broken (stock closed on Friday at 145.50), meaning that the bears do not yet have any control. There is an open gap at 142.62 that is a magnet that will likely be targeted for closure this week. There is intraweek support at 141.76 and again at 140.75. The 200-day MA is currently at 138.61, and it is possible that line could be seen sometime over the next 2 weeks. The 137.30 level (on a weekly closing basis) is indicative. Short-term daily close resistance is found at 150.74. TXN generated a new 14-week intraweek, daily and weekly closing highs and closed near the high of the week, suggesting further upside above last week's high at 194.84 will be seen this week. This move generated several bullish signals as a new buy signal was given on the daily and weekly closing chart, as well as a break above the 200-day MA, currently at 189.70. The stock has mostly open air above 200.64. This move was reason enough to cover the short positions (which I was going to do on Friday) but given that the stock closed on the low of the day on Friday, and further downside below Friday's low at 192.26 is expected to be seen on Monday, I decided to wait until then, to cover the shorts. In addition, a retest of the 200-day MA is a decent possibility and as such, I do plan to cover the shorts around the $190 level. On a daily closing basis, the 188.71 level is now pivotal support. A close below that level any day this week, would negate the breakout. VWDRY generated a green week and did close near the high of the week, suggesting further upside above last week's high at 5.52 will be seen this week. The action seen this past week was positive but not necessarily indicative. An intraweek break above 5.64 would be considered short term indicative, given that it would be a new 30-week high. A weekly close above 5.94 would negate all the weakness seen during this time. The 4.95 level is now indicative support. ZLAB generated a positive reversal week, having gone below last week's low and then rallying 24% to close on the high of the week, suggesting further upside above last week's high at 38.45 will be seen this week. There was news that supported this rally, in the form of updated clinical trial results that showed consistent success with one of the cancer drugs. Having said that, the stock finds itself as a resistance level of note at 39.77, which includes a 14-month intraweek high, as well as the 200-week MA (currently at 38..07), which has not been broken to the upside for the past 42 months. If the bulls can break above both of those two levels (on an intraweek and weekly closing basis), the upside target would be a minimum of up to the $50 level. Intraweek support is now found at 33.33, which if broken, would weaken the chart once again.
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1) ZLAB - Averaged long at 65.50 (7 mentions). No stop loss at present. Stock closed on Friday at 38.11. 2) VWDRY - Averaged long at 8.68 (4 mentions). No stop loss at present. Stock closed on Friday at 5.45. 3) LXRX - Averaged long at 1.513 (7 mentions). No stop loss at present. Stock closed on Friday at .767. 4) BCTX - Averaged long at 7.825 (2 mentions). Stock closed on Friday at 3.44. 5) TXN - Shorted at 189.62. Stop loss now at 190.35. Stock closed on Friday at 192.42. 6) AAPL - Averaged short at 205.62 (2 mentions) Stop loss is at 214.66. Stock closed on Friday at 203.92. 7) MMM - Shorted at 151.23. Stop loss at 156.35. Stock closed on Friday at 145.50. 8) RBLX - Covered shorts at 87.54. Shorted at 73.11. Loss on the trade of $1443 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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