 |
 |
 |
 |
 |
 |
Issue #927 
Sep 7, 2025 , | Newsletter
The newsletter with chart analysis for stocks and stock indexes |
Stock Indexes Analysis/Evaluation
|
| Once again, bulls turn the cart around!
DOW Friday Closing Price - 45400 This past week was expected to be eventful (news-wise) but more questions were raised than answered. The ISM Manufacturing index came in slightly higher (48.7 vs expected 48.5) and the JOBS report came in lower than expected (25k vs expected 75k). The news did not clear anything up, given that none of the reports clearly showed a strong trend in either direction. On the other hand, Gold rallied strongly (4% above the previous week's all-time intraweek high), meaning that inflation "expectations" (due to the tariffs) continued to move higher. The SPX made a new all-time intraweek and weekly closing high and the DOW made a new all-time intraweek high. All indexes generated and outside week (higher high and lower low than the previous week). Nonetheless and adding to the confusion, The DOW closed red but slightly in the upper half of the week's trading range, while all other indexes closed green and near the highs of the week, suggesting further upside above last week's highs will be seen this week. All of this continues to suggest that confusion reigns, though because of the trend and the momentum being up, the traders continue to lean to the bull side, even though all signs point to the economy slowing down (which normally is a negative sign). This coming week has 3 additional eventful economic reports, with the PPI and CPI (inflation) reports) coming out on Wednesday and Thursday morning and the Consumer Confidence number coming out on Friday. The inflation estimates are the same as last month at .3% and the Confidence number is expected slightly lower (58% vs 58.2% last month). If the reports come out as expected, nothing will be cleared up. If that occurs, the indexes are likely to move higher but slightly, as they await the Fed rate decision on the 18th. Having said all of the above and with last week being an outside week, last week's lows (DOW at 44948, SPX at 6360, NASDAQ at 22977, and RUT at 2329) are now considered short-term pivotal supports. One thing to closely watch this week (on a daily closing basis) is the 6501/6502 level in the SPX. There is a double high there that if not broken this week and a daily close below 6415 occurs (the double high confirmed as a double top), indicative and new selling interest will be seen. At this moment though, the Index market is awaiting fundamental information that would clarifies things, meaning that the probabilities do not favor any "chart" signals (especially negative ones) to occur. By the same token, and also due to the uncertainty, upside action likely be strongly "limited". HSI Chinese index made a new rally weekly closing high, having closed at 25417 and above the previous one at 25388. Nonetheless, it was not all that convincing as the index had an inside week and a close in the middle of the week's trading range. The sell signal on the daily chart given the previous Thursday and confirmed the next day, was negated this week and the negation was confirmed. One of the reasons for the sell signal negation is that the PMI number that came out this past week, showed unexpected growth. As such, the direction of the index is back to sideways. A daily close above 25829 or a daily close below 24998 would change the outlook. It closed on Friday at 25417 (middle of those two levels).
GOLD(Dec 2025 chart) continued the uptrend in an impressive and convincing way, having made a new all-time intraweek high at $3655 and a new weekly closing high at $3640. This was almost a 4% rally from the close the previous week and left no doubt that this week the trend-up will continue. The next economic reports that could have some impact on Gold is the inflation report due out this week and then the Fed rate announcement the following week on the 18th. There are no chart points nearby that could be of any consequence in favor of the bears. OIL generated a negative reversal week, having gone above last week's high and then closing red and below last week's low. Oil closed on the low of the week, suggesting further downside below last week's low at 61.47 will be seen this week. The negative reversal came after it was announced that OPEC was considering getting rid of (or cutting down) some of the production cuts that have been in effect for months. As such, Oil renewed the downtrend and gave a new sell signal, having closed on Friday below the previous low weekly close at 62.80. The downtrend continues but the door was left slightly ajar for the downtrend not to get aggressive. Oil closed at 61.87 and still above 2 other weekly close supports (though minor) at 61.50 and at 60.79. On the daily closing chart, there was a support at 61.93 that did get broken, and if confirmed on Monday with another red daily close, a drop down to at least 60.79 will occur. Nonetheless, that support is minor and as such, the next but a bit stronger support at 59.58 would likely be targeted (on a daily closing basis). To the upside, a daily close above 63.25 would ease some of the selling interest and suggest that the 64.68 level might be visited.
|
Stock Analysis/Evaluation
|
MENTIONS For this week
Based on what happened this past week, doing anything this week makes very little sense as nothing is likely to be decided until the week after.
I did make 2 mentions last week and both with very good individual reasons. Nonetheless, neither got up to the desired entry point and did not get filled The reasons for shorting the stocks remain in place but due to the action seen this past week, only one of them could get filled this week. As such, the 2nd mention has been removed for this week.
I have no new mentions for this week, but plan to have some new one's next week.
GILD Friday Closing Price - 115.05
GILD is a bio-pharmaceutical company that has been on a 15-month uptrend from a low of 62.07 to 121.83. Nonetheless, the stock made that high 4 weeks ago and has been closing red the past 3 week, with the first week being a negative reversal week. The stock has given back 8% in value. It is interesting to note that 3+ weeks ago, the company received 3 upgrades from rating companies giving it a $130-$135 objective and that the short interest in the stock is only 1.6, and yet, the stock continued to fall, contrary to what the index market did and what normally happens when rating companies raise their objectives. This is a sign that perhaps the stock has reached a high to the rally.
GILD chart has not yet shown a successful retest of the all-time high and without any negative news, that rarely happens, meaning that a recovery rally to this 8% drop (in order to retest the high) is highly likely to occur. This also means that this mention is not for this week but for any week when such a rally occurs.
GILD has intraweek resistance at 119.96 that should be seen (or close to it) before shorting the stock is considered. Such a retest will not only fulfill the chart requirements to short but also offer a very good risk/reward ratio on the trade.
The downside chart objective of GILD is the previous all-time high weekly close at 96.57, which also fits in with the monthly close support at 94.26
One last thing that makes this trade very attractive is that GILD made a new 10-year intramonth high in August but failed to break the previous monthly high from 114.31 (from 7-month ago. In addition, the all-time intramonth high is at 124.37 and this past intramonth high was 121.37 and then the stock closed in the lower half of the month's trading range, suggesting that further downside below last month's low at 108.54 will be seen this month.
Sales of GILD between 117.86 and 119.96 and using a stop loss at 121.47 and having a downside objective of 96.57 will offer at least 5.9-1. My rating on the trade is a 3 (on a scale of 1-5 with 5 being the highest.
|
Updates
|
Closed Trades, Open Positions and Stop Loss Changes |
|
|
BCTX did nothing this past week, given that it closed at the same price as the previous week. Nonetheless, it did close near the low of the week (after having made a new 7-week high at 8.82), suggesting that further downside below last week's low at 7.61 will be seen this week. This does suggest that the weekly close breakout point at 7.44 is likely to be tested this week. A daily close below 7.30 would negate the breakout. A daily close above 8.47 would give additional ammunition to the bulls. Stock closed on Friday at 7.87. GRPN generated another red weekly close and closed in the lower half of the week's trading range, suggesting further downside below last week's low at 22.65 will be seen this week. Nonetheless, the stock did generate a positive reversal day on Friday, suggesting the first course of action for the week, will be above Friday's high at 24.05. On the intraweek chart, there is no resistance above until 26.74 is reached but on the intraday 10-minute chart, the 200 10-minute MA is at 24.82, and that line should hold up. On that same chart, there is resistance (minor) at 24.66. Any 10-minute close below 23.66 would give intraday control back to the bears. LXRX generated a 3rd in a row red week close and once again closed in the lower half of the week's trading range, suggesting further downside below last week's low at 1.03 will be seen this week. Overall though, the week was uneventful as no levels of support were broken. On a daily closing basis, a close below .99 or above 1.35 would generate action of some consequence. There has been no news on the company and none is scheduled at this time, meaning that this is all about the chart right now. The stock has been in a 6-month recovery period which will not end unless the .93 level is broken. Having said that, the stock generated an inside month, suggesting that the probabilities do not favor anything of consequence occurring in September. VWDRY generated a 2nd red weekly close in a row but the bears failed to close the runaway gap at 6.14 (low last week was 6.31) and closed near the high of the week, suggesting further upside above last week's high at 6.64 will be seen this week. If that does happen, a successful retest of the runaway will be deemed to have happened, and the uptrend is likely to continue. Intraweek resistance is found at 7.22 and if that is broken, the retest of the gap formation will be confirmed and the 200-week MA at 7.86 will become the next target. Closure of the runaway gap at 6.14 would be a negative. ZLAB generated a new 16-week intraweek low and did close in the lower half of the week's trading range, suggesting further downside below last week's low at 28.71 will be seen this week. Nonetheless, the stock remained above the pivotal weekly close support at 28.84 and did hold up the minor but also indicative daily close support at 30.14, with a close on Thursday at 30.00, followed by a close on Friday at 30.76. Nonetheless and on a negative note, the stock did break the 200-day MA at 31.91, and though it is likely to go up and test that line on Monday, the fact remains that the bulls have lost control of the stock and even the short-term edge. The reason for the unexpected weakness this past week is that one of their drugs that is on Phase 3 testing, is related (or partly based on) a drug from a partner company called Amgen, and that drug showed this past week that the results of it were not as good as they originally showed in past trials. As such, ZLAB announced that they would await further results of that drug before filing it and going forward with it. This was not a case of failed results but less results than anticipated. This means more of a delay than an actual negative. Having said that, the charts are clear. A daily close below 28.14 would be a clear negative, while a daily close above 33.34 a clear positive. A confirmed daily close above the 200-day MA would give the bulls a slight edge.
|
1) ZLAB - Averaged long at 65.50 (7 mentions). No stop loss at present. Stock closed on Friday at 30.76. 2) VWDRY - Averaged long at 8.68 (4 mentions). No stop loss at present. Stock closed on Friday at 6.56. 3) LXRX - Averaged long at 1.513 (7 mentions). No stop loss at present. Stock closed on Friday at 1.09. 4) BCTX - Averaged long at 78.25 (2 mentions). Stock closed on Friday at 7.87. 5) GRPN - Shorted at 26.66. Stop loss at 27.89. Stock closed on Friday at 24.01.
Previous Newsletters
|
Encyclopedia of Chart Patterns. A must have for chart aficionados! |
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. |
|
|
|