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Stocks look to reverse 4-session slide

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Spurred by some renewed strength in technology sectors, the major indexes look to reverse a recent 4-session slide with the Networking Index (NWX.X) 159.11 +3.18% building on an earlier morning gain after Lucent (NYSE:LU) $1.78 +5.95% reported a narrower than expected loss and said it was on track to return to profitability later this year.

While the Dow Industrials (INDU) 8,422 -0.23% continue to linger in the red with a 19 point decline, a recovery has taken hold after this major average reached its weekly S2 support level this morning at 8,361. From here, weekly levels of resistance from pivot analysis is 8,474 and then at this week's pivot of 8,672.

The NASDAQ-100 Index (NDX.X) 1,025 +1.61% continues to be a bit of a bright spot among the major indexes. This morning's low of 1,003 came right at our daily S1 level of support at 1,003, and the reversal back above the daily pivot of 1,016 served as support on a pullback just before noon and the break to a session high above 1,022 looks to have spurred some renewed enthusiasm from bulls.

Shares of software maker JDA Software (NASDAQ:JDAS) $11.78 +31.3% are surging higher and giving spark to the GSO Software Index (GSO.X) 108.84 +2.08% after the company reported Q4 (December) earnings late yesterday of $0.11 per share, which was 4-cents above analyst's expecations. Brokers Wachovia and Piper Jaffray both upgraded the stock today on the upside earnings surprise.

Bank of America (NYSE:BAC) $71.29 +0.79% have reversed earlier losses and bucks weakness in both the S&P Banks Index (BIX.X) 285 -0.46% and KBW Bank Index (BKX.X) 763 -0.42% after the company announced during market hours that it was stepping up its stock buyback program and said its board of directors approved the repurchase of an additional 130 million shares. With 1.5 billion shares outstanding, today's additional buyback announcement of 130 million equates to a rather hefty 8.6% of shares outstanding.

On the downside, shares of AsiaInfo Holding Inc. (NASDAQ:ASIA) $4.71 -41.5% are being pummeled to the downside on volume of 2.5 million shares after the company reported earnings of break-even for its recently completed Q4, which was a penny below consensus (1 analyst surveyed). After nearly quadrupling from its October lows, today's action looks to be that of profit taking from speculators. With just one analyst following the stock, I'd expect institutions to be somewhat scarce in the stock.

A quick look at the market statistics has both the NYSE and NASDAQ approaching the 1 billion shares traded mark.

Despite some mixed gains and losses from the major market indexes and various sector, internal breadth is negative. The NYSE shows decliners having the upper hand on advancers by a 17 to 14 margin, while NASDAQ breadth is equally negative at 16 to 13.

The number of new highs versus new lows shows a somewhat surprising shift today. What has tended to be rather bullish from this indicator of breadth at the extreme ends has the NYSE showing just 63 stocks trading new 52-week highs compared to 49 stocks hitting new lows. The "biggest change" from this indicator is in the NASDAQ where for the first time this year, I note that new lows of 54 currently outnumbers new highs of 50. yesterday we noted some "softening" at the lower end of the new lows category for the NASDAQ, and today's lack of bullishness at the new highs end of things is viewed as a negative and hints that NASDAQ bulls may indeed be losing some of their aggressiveness.

Jeff Bailey

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