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Issue #901 
March 2, 2025 , | Newsletter
The newsletter with chart analysis for stocks and stock indexes |
Stock Indexes Analysis/Evaluation
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| Important week ahead, given that Trump administration's action will start to show in the economic reports
DOW Friday Closing Price - 43840 This past week was a wild week with high volatility and some dichotomy. The DOW outperformed all the indexes, having dropped only .6% (from the previous week's close to the low seen last week) and then generating a positive reversal week, having made a new 6-week low and then closing green. On the other side of the coin, the NASDAQ and the RUT both dropped 5% from the previous week's close to the low last week and both closed red. The SPX dropped 3% and also closed red. The dichotomy was evident with the DOW closing on the high of the week and the NASDAQ closing in the lower half of the week's trading range, suggesting the dichotomy will continue this week. This does suggest that the traders are taking a "safe" (not speculative) approach to what is coming this week, which is the start of the economic numbers that will begin reflecting the Trump's administration actions and its effects of the economy. One important chart thing that happened this week, is that the SPX got down to the bottom of the up channel it has been in since November and bounced up to close in the upper half of the week's trading range, meaning that if it does go above last week's high at 6043, a successful retest of the channel will have occurred, suggesting that up channel remains in place. Having said that, the channel is exclusively chart oriented, meaning that the fundamental picture remains the driving force of the market. With this week's important economic reports of the ISM Index and Jobs reports due out (Monday and Friday), those will determine if the channel remains or is broken. On a positive note to all of this, the channel will clearly give us that information, because if the index breaks the bottom of the channel (currently at 5834) and then confirms the break (going below 5773), the chart will clearly paint the picture that we are now in a down trend. Having said all of the above, these two economic reports may not yet be catalytic as they represent what happened in February. The results of Trump's action may not yet be reflected strongly in these reports, meaning that some upside can still be seen without the uptrend resuming. Once again, the SPX will be the key. The all-time high at 6147 has not yet been tested successfully and if the economic reports are not conclusive, such a retest is likely to occur. As such, if the index does get above last week's high and closes green, such a retest could be happening. If that is the case, the index could get up intraweek as high as 6099 and then close out the week on Friday at 6040. If that occurs, the following week's inflation report will take on much meaning and would likely be decisive. These are some of the chart levels to watch this week. In the DOW intraweek resistance should be found at 44486. On a daily closing basis, it is at 44293 and that level is indicative. To the downside, a drop below last week's low at 43100 (daily close below 43239) would be indicatively negative. In the NASDAQ, there is presently intraweek resistance at 21182, which if broken would suggest that 21702 would likely be seen. With the index likely to go lower this week, the downside objective could be as low as 20200, which is where the 200-day MA is currently at. The 19880 level is pivotal intraweek support. In the RUT, the picture is presently negative as the index has broken (and confirmed the break) of the 200-day MA (currently at 2204). A confirmed daily close above that level, would be a short-term positive if the weekly close is above 2207. Such a close would open the door for 2263 to be seen. To the downside, there is no support below until the 2080-2090 level is reached. Things are unclear at this time, given that there are a lot of very game-changing things occurring in the Trump presidency, which the results of, are not yet known. Overall, speculation is leaning to a bearish conclusion but it is still to early to say how high those probabilities are. The reports this week and the next, will start to paint a clearer picture. Expect the high volatility that has been seen of late, to continue. HSI index generated a negative reversal week, having made a new 3-year intraweek high and then closing red and near the low of the week, suggesting further downside below last week's low a 22798 will be seen this week. The reason for the reversal was the announcement from Trump that a "further" 10% tariff would be instituted on China. That announcement likely signals that the 6-week 22.5% rally has ended and that a period of consolidation and of finding and building a new support level has begun. Other than the negative reversal, no other signals were given, suggesting that this is not a game-breaker but simply a pause in the action until more fundamental information comes out. The index does have a short-term intraweek support level at 22716 that if broken this week, will confirm that a correction to the rally is occurring. If that does happen, a drop all the way down to the 21000 level will likely be seen. A daily close above 23477 would weaken the hands of the bears and a daily close above 23787, would negate this outlook.
GOLD(Apr 2025 chart) generated a key negative reversal week, having made a new all-time intraweek high (at $2974) and then closing red and below the previous week's low. Gold closed on the low of the low of the week, suggesting further downside below last week's low at $2859 will be seen this week. The action seen is indicative that for now, a top to this uptrend has been found and that a period of consolidation and support-building has begun. On an intraweek basis, there is minor support at $2855 and then nothing until $2802. On a daily closing basis, there is no support of consequence found until $2800 is reached. That support is decent and indicative. On the other side of the coin, on the weekly closing chart, there is no support until $2749 is reached (on the daily closing chart, "that" support is found at $2741. What this means is that on a short-term basis, the $2800 level is important. By the same token, any confirmed daily close below $2800 would suggest that the all-time high would not be at risk of being broken for at least 3 months, but likely 6 months or more. The probabilities at this time, do favor the $2800 level holding up and a rally to at least test the all-time high to occur within the next few weeks, with the possibility of breaking it and making a new all-time high. Having said that, the $3000 militarized zone would still be a difficult level to break above. On a daily closing basis and for the next week or two, the $2900 level is now resistance. OIL continued lower (a new 9-week intraweek and weekly closing low) but then closed in the middle of the weeks' trading range, suggesting equal chances of going below last week's low at 68.36 or above last week's high at 71.26. This entire area around the $70 level has been support for the last 42 months and is likely to require some strong fundamental event to occur to break it. Having said that though, Oil has been down to this level on "so many" occasions during this period of time (meaning multiple bottoms), that chart-wise, the probabilities do favor a break occurring (rather than not). Having said that, the charts do not support such a break occurring this week, meaning that there is a slightly better chance of a rally than a breakdown. The 71.00 level is short-term indicative. A break above that level would suggest a rally up to the 72.88 level would be seen. A break above that, would suggest 76.18 would be seen. To the downside, the 69.88 level is presently short-term support, which if broken would suggest a drop down to 65.27 would be seen. Probabilities for the week are that a 69.28 to 72.88 trading range will occur. Then again, this is a week with fundamental news for the economy will come out, and that can always generate movement.
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Stock Analysis/Evaluation
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CHART Outlooks
I have no mentions for this week as it is a fundamental week where the charts cannot predict with any degree of certainty what will happen. Having said that, the mention I have had for the past 4 weeks finally got down to the desired entry point this past week. I did not buy it because it got down to that level late in the week and closed near the low of the week, suggesting a better entry point could be seen this week. This is a stock with a strong chart picture that is not necessarily tied into the economic scenario.
PURCHASES
PRAA Friday Closing Price - 20.93
PRAA is a financial services company that works with non-performing loans. With Trump keying on economics, the outlook for this company is positive. The stock broke down in May 2023, having broken a long standing monthly close support at 24.14 and dropped down to 12.31 (all-time low monthly close) in October 2023. It then bounced back up to 26.20 and has since shown 2 other monthly closes at 26.08 and at 26.65. Those 3 monthly closes were all above the 24.14 monthly close support, meaning that failure signals against the bears have occurred on 3 different occasions. It also means that there is a triple top in that $26 area and that is a magnet for breakage occurring.
During the past 14 months, PRAA has set up 2 monthly close support levels at 19.66 and 20.16, which means that the 12.31 low has now been tested successfully twice and given that the monthly close was this Friday and the stock closed at 20.93, the chart suggests it is a good purchase this week. On an intraweek basis, the stock shows a double low at 18.64/18.71. The stock did generate a negative reversal month and a close near the low of the month, suggesting further downside low last month's low at 20.46. With the previous month's low being 19.17, and likely a level that if broken would generate new selling interest. buying the stock below 20.46 with a stop loss at 19.07 and having an objective of 31.59, will offer a very attrative 8-1 risk/reward ratio.
To the upside and using the same monthly chart, the objective is the 200-month MA, currently at 33.23. The 200-week MA is currently at 31.59 and that is certainly a magnet should all these chart support building is valid. >
On a fundamental basis, there are 6 rating companies following PRAA and 2 of them rate the stock a hold, 3 of them rate the stock a buy and 1 of them rates the stock a strong buy. None have the stock as a sell.
PRAA is an attractive purchase this week. The chart suggests that a drop down to anywhere between 19.75 and 20.26 will occur. Stop loss will be at 19.07 (mental) and the objective is 31.59. Such a trade offers at least an 8-1 risk/reward ratio. My rating on the trade is 3.75 (on a 1-5 scale with 5 being the highest).
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Updates
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| Monthly & Yearly Portfolio Results
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Closed Trades, Open Positions and Stop Loss Changes
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Status of account for 2007: Profit of $9,758 per 100 shares after losses and commissions were subtracted. Status of account for 2025, as of 2/1 Profit of $4,133 using 100 shares per mention Closed out profitable trades for February per 100 shares per mention
QTWO (short) $162
Closed positions with increase in equity above last months close. NONE Total Profit for January, per 100 shares. $162 Closed out losing trades for February per 100 shares of each mention.
TXN (short) $133
TXN (short) $433 Closed positions with decrease in equity below last months close. NONE Total Loss for February, per 100 shares $566 Open positions in profit per 100 shares per mention as of 3/1
A (short) $1044
Open positions with increase in equity above last months close.
ZLAB (long) $6097 Total $7,641 Open positions in loss per 100 shares per mention as of 3/1
FSLR (long) $3452
Open positions with decrease in equity below last months close.
BCTX (long) $133 Total $7,085 Status of trades for month of February per 100 shares on each mention after losses subtracted.
Profit of $152
Status of account/portfolio for 2025, as of 2/28Profit of $4,285 per 100 shares.
A made a new 14-week intraweek and weekly closing low and closed near the low of the week, suggesting further downside below last week's low at 125.81 will be seen this week. The company reported earnings and they disappointed, supporting the fall in price. The stock did get down to a decent and established area of intraweek support between 124.16 and 126.75, that chart-wise will not be easy to break. Nonetheless, if broken there is open air down to the $112-$113 area, which was the objective given on the mention. In looking at the monthly chart, it does suggest a drop down to that level will be seen in March. In looking at the daily chart, there is a breakaway/runaway formation that is supported by the news. This does suggest that if the runaway gap is closed (at 133.65), that the breakaway gap at 141.42 would become an objective. This means that a mental stop at 133.65 should be used. A daily close above 130.19 would increase the chances of that occurring. AEP generated another new all-time high, confirming the breakout that occurred the previous week. The stock did close in the lower half of the week's trading range, suggesting further downside below last week's low at 104.66 will be seen this week. Having said that and seeing what happened to the stock indexes this week, the chart does not at this time promote staying with the short position. Nonetheless, the stock should go below last week's low and that means that the bulls still need to do some work to keep the stock from giving a failure signal, which would then suggest the short positions should be kept. The level to watch this week on the daily closing chart is 104.96. A confirmed close below that level, in conjunction with a close next Friday below 104.17, would mean "stay short". The short position is presently in profit (small), so the trade either way is not likely to be a loser. On the other side of the coin, a daily close above 107.64 would be reason enough to cover the short with a small loss. BCTX made another new all-time weekly closing low and closed near the low of the week, suggesting further downside below last week's low at 3.57 will be seen this week. Nonetheless, the all-time intraweek low at 3.33 was not broken, meaning that this move down could end up being the required/needed retest of that low, which if successful would mean short-covering and new buying would be seen. There was one piece of news this week and that was that a rating company (named Wedbush) initiated coverage on the company and gave it an outperform rating with an objective of $15. The 3.92 level is presently intraday resistance, which if broken would likely bring in some new buying interest. A close above 5.17 would generate a new buy signal. Evidently an intraweek move below 3.33 would keep the downtrend intact. BTZI generated a sell and failure-against-the-bulls weekly close signal this week when in closed below the .007 level (closed at .005). Nonetheless, the chances of this signal being negated this coming week are high, due to the fact that the 200-day and 100-week MA lines (at .004 and at .007) did not get broken but will likely be reached this week and a bounce from them occur. Any daily close above .007 would negate the break and a close above .092 would generate a new buy signal. A close below .0026 would give control back to the bears. FSLR generated a 14% drop in price this past week (due to downgrades in price that were announced by 4 different rating companies). The stock closed below the 200-week MA convincingly, which if confirmed this week with another close on Friday below 149.11, would be damaging to the chart. Having said that, the downgrades in prices were from high levels to lower but still high levels (such Morgan Stanley's from $297 to $237). No other company offered any price downgrade below $237 and one rating kept its objective at $305. As such, and with the stock closing at 136.18 this week, the probabilities of the stock negating the break of the MA this week are high. The stock closed near the low of the week, suggesting further downside below last week's low at 133.90 will be seen this week. Pivotal intraweek support is found at 129.50. In looking at the intraday 10-minute chart, a rally above 137.57 will likely mean that new buying will come it. A daily close above 147.42 would generate a failure signal against the bears. LXRX generated a new 12-week intraweek low at .63. but then turned around to close in the upper half of the week's trading range, suggesting further upside above last week's high at .746 will be seen this week. On a daily and weekly closing basis, nothing of consequence occurred but if the stock closes green on Friday, a double bottom will have been built at .69/.695, which if confirmed with a weekly close above .784, would generate short-covering and new buying interest. The reality of the situation is that this stock has been "mired" for 12 weeks around the .70-.80 level without any indication of what will happen from here. The company is set to announce earnings on the 10th, and that will likely generate movement. This week could give us a hint as to what to expect. A drop below .62 or above .82 this week, would be indicative. TNC generated an uneventful inside week with a close in the middle of the week's trading range and nowhere near any levels that would generate new movement. It did generate a new 3-month high on the monthly chart that confirmed the break of decent resistance that occurred in January. Then again, it also closed in the middle of the month's trading range, also suggesting equal chances of going above last month's high at 90.44 or below last month's low at 82.23. Having said that and in looking at the daily chart, the stock now shows 2 successful retests of the multi-month low at 79.73, strengthening the bull's hands. Short-term pivotal daily close support is found at 85.03 and short-term pivotal daily close resistance is found at 89.16. VWDRY generated a green weekly close, making the previous week's close at 4.51 into the needed/required retest of the multi-year low weekly close at 4.26. Nonetheless, the stock closed in the lower half of the week's trading range, suggesting further downside below last week's low at 4.52 will be seen this week. Short-term pivotal intraweek support is found at 4.41, which if broken would suggest 4.31 would be seen and would put the bears back with the edge. Short-term pivotal resistance is found at 4.86 and mid-term pivotal at 5.18. ZLAB generated a new 22-month weekly closing high and closed near the high of the week, suggesting further upside above last week's high at 35.90 will be seen this week. On an intraweek basis, the 36.60 level is pivotal resistance, which if broken, would suggest the $42 level would be the next objective. The monthly chart does strongly suggest this will happen in March. In looking at the daily chart, any confirmed daily close below 33.18 would now be considered a short term negative.
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1) ZLAB - Averaged long at 65.50 (7 mentions). No stop loss at present. Stock closed on Friday at 34.64. 2) VWDRY - Averaged long at 8.68 (4 mentions). No stop loss at present. Stock closed on Friday at 4.63. 3) LXRX - Purchased at .93 Averaged long at 1.513 (6 mentions). No stop loss at present. Stock closed on Friday at .70. 4) BCTX - Purchased at .775. No stop loss at present. Stock closed on Friday at 3.67. 5) FSLR - Purchased at 149.13. Averaged long at 155.50 (3 mentions). No stop loss at present. Stock closed on Friday at 136.18. 6) TNC - Purchased at 82.42. Stop loss is at 78.47. Stock closed on Friday at 86.56. 7) A - Shorted at 138.36. Stop loss now at 138.69. Stock closed on Friday at 127.92. 8) AEP - Shorted at 106.35. Stop loss at 107.84. Stock closed on Friday at 106.05.
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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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