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  James Brown   4/27/200,  4:05:00 PM
Ouch! A reader has pointed out that the body armor maker CRDN has produced a big failed rally today. After four big days in a row the stock was due for some profit taking. The question now is where will bulls step in to buy the dip? Old resistance at $32.50 should now become support however the $30.00 mark may be a better spot to look for a bounce.

 
 
  Jim Brown   4/27/200,  4:00:28 PM
Earnings After the Close - Reduced List:

AFL est = +0.54, actual = +0.57
MCD est = +0.40, actual = +0.40
NET est = +0.11, actual = +0.10 miss
ABGX est = -0.50, actual = -0.47
COHR est = +0.06, actual = +0.07
FLEX est = +0.11, actual = +0.13 raising guidance
MXIM est = +0.31, actual = +0.31 rev higher
MSTR est = +0.29, actual = +0.60 GAAP
MNST est = +0.10, actual = +0.11 up guidance
NETE est = +0.01, actual = +0.03
NTIQ est = -0.01, actual = -0.03
RFMD est = +0.04, actual = +0.04 low guidance
SINA est = +0.27, actual = +0.29
UTSI est = +0.39, actual = +0.40 up guidance
WEBM est = -0.03, actual = +0.01
WBSN est = +0.20, actual = +0.22

 
 
  Linda Piazza   4/27/200,  3:31:15 PM
Today's OEX behavior established this top trendline as the applicable one to watch, so we've now got some important information in our arsenal: Link Many of us distrusted an upside breakout of this triangle, even though classic technical analysis would suggest that the breakout would be to the upside. I distrusted it because of known strong historical support beginning at about 559.50, but the OEX broke through that level and traveled high enough to break into that resistance zone. It was that upper trendline that it was testing, however, as shown by that chart.

 
 
  Linda Piazza   4/27/200,  3:21:13 PM
The current OEX five-minute pattern looks like the expected bear flag rise into resistance. The bounce came as the OEX hit the 30-minute 100/130-pma's.

 
 
  James Brown   4/27/200,  3:17:55 PM
The stock doesn't move very fast but Gillette Co (G) is close to breaking out over resistance at $40.00. Covered call candidate?

 
 
  James Brown   4/27/200,  3:13:14 PM
The 3:15 PM ET update is posted: Link

 
 
  Linda Piazza   4/27/200,  3:13:04 PM
As of a few minutes ago, declining issues were higher than advancing ones on the Nasdaq, with the adv/dec ratio at 14:17, and down volume was 1.9 times up volume. Advancing issues were ahead on the NYSE with a 17:16 ratio, and up volume was also only slightly higher than down volume.

 
 
  Linda Piazza   4/27/200,  3:03:09 PM
A few minutes ago, BLUD hit the stop that would have been suggested by Jeff's 5MRT system. Although I worried at the time that my higher stop was hit that BLUD would turn around and achieve the upside target after all, with the play stopped out, but that higher stop made more sense to me. Now, in retrospect, I'm glad that I adhered to the higher one. I've been watching many plays lately using Jeff's 5MRT system and respect the clear-cut entries and exits it provides, and the insight into possible daytrades, but this was one that just didn't work, unfortunately. That's not Jeff's fault, but mine for choosing the stock to which to apply the method today.

 
 
  Linda Piazza   4/27/200,  2:48:31 PM
Lower Keltner channel support on the OEX is now at 553.94, and is turning lower, but Keltner support is trying to snake below the OEX now. Those of you who watch pivots will also note that the weekly OEX pivot is at 556.09 (according to Q-charts) and the daily at 555.66, so the OEX just sliced through those levels, too.

 
 
  Jim Brown   4/27/200,  2:44:24 PM
Love those AC130s. Puff the magic dragon!

AC130 gunship is a flying gun platform with multiple calibers of weapons all firing out the side. The airplane flies in tight circles well above the target while pouring tens of thousands of rounds down onto the target. Link

Sample picture of cone of fire finding its target. (tracers represent only 1 for every five rounds) Link

 
 
  James Brown   4/27/200,  2:43:17 PM
Fox news is reporting that they believe the huge fire seen in Fallujah is an insurgent's munitions dump that has been targeted by Coalition AC130 gunships.

The cease-fire deadline was through April 27th. The Coalition didn't waste any time moving in after midnight.

 
 
  Linda Piazza   4/27/200,  2:43:03 PM
The OEX is trying to hang onto central Keltner support in the 556.89-557.34 range. A drop much below 556.89 would set up the possibility of a fall to lower-channel support at 554.03 but beginning to turn lower. Note: A plunge began as I typed.

 
 
  James Brown   4/27/200,  2:41:32 PM
MMM has certainly been a pillar of strength for the Industrials these last few days. The stock has been able to maintain its gains after breaking out to new all-time highs last week.

 
 
  James Brown   4/27/200,  2:36:34 PM
Another stock aiming for new highs is Mineral Tech (MTX). Shares broke out above resistance at $60.00 on huge volume yesterday and the stock hit a new all-time high today above its previous highs in December. Earnings are due out on April 30th.

 
 
  Jim Brown   4/27/200,  2:34:30 PM
I will go with C: Fed meeting ahead in 4 days.

 
 
  James Brown   4/27/200,  2:34:16 PM
L-3 Communications (LLL) reported earnings this morning that beat the street by 3 cents with revenues up almost 40% to $1.52 billion, which was above estimates. The stock ran toward its highs near $62.50 and failed, although shares remain up 1.6% to $61.80.

 
 
  James Brown   4/27/200,  2:30:54 PM
Hmmm.. so is the violence in Iraq the cause for the sudden drop in the stocks? (or the Syrian news...)

 
 
  Linda Piazza   4/27/200,  2:30:26 PM
The OEX is now approaching this morning's breakout zone, a possible zone from which it might gain support for a countertrend bounce. Doesn't look as if it's going to slow as I type, however.

 
 
  Linda Piazza   4/27/200,  2:18:30 PM
I was just preparing a post about how the OEX was showing bearish divergence from previous approaches to the top of this ascending regression channel, no longer hitting the top of the channel on the advances, when the OEX began to drop. It's dropping through the channel as I type, but I thought I'd show the chart anyway. Note how the last approach to the top of the channel did not hit the top and the OEX instead flattened. That's bearish divergence: Link

 
 
  Jim Brown   4/27/200,  2:13:42 PM
EBAY - Hearing that a rumor of a possible 2:1 split is providing the bounce in EBAY. Shorts getting squeezed again and at this point it is just a rumor.

 
 
  Jim Brown   4/27/200,  2:02:36 PM
Explosions and gunfire heard near the British embassy in Damascus Syria.

 
 
  Linda Piazza   4/27/200,  2:00:23 PM
We're ending the time of day that often sees a stop-running push without seeing such a push in the OEX, at least. A push did occur in the Russell 2000, beginning right on time during that 1:35-1:55 EST period. The COMPX saw a similar push, but the Dow and two S&P's didn't participate.

 
 
  Jim Brown   4/27/200,  1:57:18 PM
EBAY bubble - dear jim, i would like to short ebay 10000 shares today,as ebay is up to 84.09,as it is approaching bubble.P/E is 120 and google is coming.give me your thoughts ASAP.your advice is very valuable to me. thank you.

I would be very careful shorting any stock moving higher like EBAY. I would always wait for weakness to appear. We saw weakness yesterday from last weeks bounce but the stock took off like a rocket today. While I think the Google IPO will take money out of EBAY it will not happen until we get some definite news from Google. They are continuing to delay any specifics.

A better target today would have been DNA. Always wait for weakness to confirm your decision.

 
 
  Linda Piazza   4/27/200,  1:42:25 PM
Marketwatch.com is reporting that LU is leading the NYSE volume today, trading lower by more than 2%.

 
 
  Linda Piazza   4/27/200,  1:40:50 PM
The OEX is right back at the resistance that has stopped it since that first burst higher this morning. That Keltner resistance is from 559.27-559.31. Of course, we have the historical 559.50-560 resistance just above that.

 
 
  Linda Piazza   4/27/200,  1:38:58 PM
BLUD just hit the $26.65 stop, and hovers near that level now. It may try to bounce, but it's now established a descending regression channel in which it's been trading since forming the head of its H&S formation on its 2-minute chart. We can't blame Jeff's 5MRT system which triggered the trade, especially as I set the stop closer than that system would have set it. I wish this trade had worked out better, but I wasn't willing to give it much downside wiggle room beyond the downside target of that small H&S on the 2-minute chart.

 
 
  James Brown   4/27/200,  1:23:45 PM
Hmm.. I can't find any specific catalyst but Lafarge (LAF), a supplier for cement, concrete and drywall, is up 2.3% and shooting toward highs not seen since early 2002. The company doesn't report earnings until May 4th but the rally from mid-April has been powered by strong volume.

 
 
  Linda Piazza   4/27/200,  1:21:34 PM
Resistance continues to look firm just above the current OEX position, with that gathered Keltner resistance now at 559.17-559.21. That looks firmer than the support just under the current OEX position, with the strongest support now gathering at the mid-channel level, between 556.81-556.97. So far, the OEX has been caught by a channel line that now lies at 558.46 whenever it retreats, but that channel line may be trying to turn lower. This is all just micro-managing at this point, however.

 
 
  James Brown   4/27/200,  1:13:24 PM
JetBlue Airways (JBLU) is certainly doing well after its earnings announcement last week. The stock is trying to breakout over resistance at $30.00 and its simple 200-dma. Shares are currently up 3.29% to $29.50. Its P&F chart looks very bullish after its bounce from P&F support. The P&F price target is currently at $43.00.

 
 
  James Brown   4/27/200,  1:10:00 PM
Another stock I have on my watch list is Pixar (PIXR), famous for its Finding Nemo and Toy Story films, the stock has been consolidating its recent breakout over its simple 200-dma but is still under resistance at $70.00. Earnings are expected on May 6th.

 
 
  James Brown   4/27/200,  1:06:43 PM
Ceradyne (CRDN) may be one for the watch list. The company, a body armor manufacturer, reported earnings last week that were above estimates and the stock has been on fire. Shares are up four days in a row on heavy volume. Today is another new all-time high.

 
 
  James Brown   4/27/200,  1:01:37 PM
Looking at Jane's (12:57) comments about energy... I read something a day or two ago about researchers who had designed a way to produce electrical energy from human waste. It was still in the early stages of development but it's an interesting concept.

 
 
  Linda Piazza   4/27/200,  1:00:10 PM
Reader Question: Is there such a thing as a capitulation UP day before a down reversal. What I mean is back in March we had that one big down day where it seemed the market tanked right from the start and flushed everything out and then the rally started into April the next day. Today I see the Vix almost near its yearly low (right before that big March drop). Also, I see the QQQ's daily 21,3,3 - 14,3,3 - 5,3,3 stochastics all preparing a bearish cross yet action seems to be showing a decent up day. How does one make sense of it (can you)?

Response: Great question. Yes, there can be a day when volume expansion is actually a contrarian indicator. We haven't seen a day like this lately, but a day when breadth indicators show the volume wildly skewed to the buy side may actually be a contrarian indication. (We're not seeing that kind of skewing or volume expansion today.) That may be indicating that everyone has lined up on the same side of the trade, all the shorts are covering, and everyone who might possibly want to buy is buying. There's no one left to drive it higher, and some weak hands jumped into the fray, weak hands that will be quick to bail on any hesitation.

In fact, one important factor in a key reversal day is that volume expands wildly as trade moves in the direction of the prevailing trend (up, for the purposes of this discussion), before the index in question turns and heads lower, closing lower, too. However, with advancing issues only 1.6 times declining issues on the NYSE as I type and 1.1 times declining issues on the Nasdaq, and with up volume only about twice down volume on the NYSE and lower than down volume on the Nasdaq, we're not seeing any kind of buying crescendo. Total volume is not great, either.

As far as the stochastics evidence is concerned, the stochastics and some other oscillators are showing tentative bearish divergence on the QQQ's with yesterday's higher high but lower highs showing up on the oscillators, but such divergence offers a warning and not a promise of weakness, and can still be erased. ADX is low enough that we should be able to trust that oscillator evidence, so it's wise to be watchful, but MACD is flattening above signal and trying to tentatively turn higher, too. Essentially, oscillator evidence is mixed, as is often true when an index settles into some type of consolidation pattern. No matter what the ADX tells us we should or should not trust, we may not get a lot of helpful market-timing information from oscillators when an index is consolidating. The same is true of the volatility indices. We've all been debating the significance of the recent lows reached on the volatility indices, and they're warning us to be mindful of that "when the VIX is low, it's time to go" jingo, but we've been watching that since last year as those volatility indices hit level after level that should have been turnaround points for the markets and weren't. You're doing a great job of paying attention to all these factors, and keep paying attention, but let price be your guide.

 
 
  James Brown   4/27/200,  12:59:39 PM
Uh-oh.. Bears are moving in on Varian Medical Systems (VAR) as the stock breaks down through technical support at its simple 50-dma. Shares are trying to bounce from the $84 level and are trading at $85.20 but the next support level is near its 100-dma just above $80.00.

 
 
  Jane Fox   4/27/200,  12:57:46 PM
WASHINGTON (CBS.MW) - The way energy is produced and consumed in the United States could change dramatically in the next years in response to higher prices for oil and natural gas, Federal Reserve Chairman Alan Greenspan said Tuesday.

Link

 
 
  James Brown   4/27/200,  12:54:18 PM
The 01:00 PM ET update is early: Link

 
 
  Linda Piazza   4/27/200,  12:17:29 PM
You know that I watch the OEX with regard to the 100/130-pma's that Jim and others have taught us to watch. On many indices, I've found that a 30-minute chart is the best with which to watch these averages, but on the OEX, I've found a 120-minute chart particularly helpful. However, I've never found a chart that felt right for the Russell 2000, as neither the 30-, 60-, or 120-minute chart showed that the Russell's action was particularly correlative to the 100/130-pma's on that chart. However, this morning, I was thinking about Mark P's recent article about using Fib numbers either for the averages or for the chart intervals, so I started playing around. Here are the 100/130-pma's as seen on the 19-minute (corresponding to the 19.1% Fib level) chart: Link According to that chart, 588.71-589.13 should be strong support on the Russell, but then we knew that from historical S/R, too.

 
 
  Linda Piazza   4/27/200,  12:15:35 PM
By the way, I forgot to mention BLUD's new 52.5 bullish price objective on its P&F chart.

 
 
  Linda Piazza   4/27/200,  12:14:40 PM
BLUD finally broke to the upside out of that bullish falling wedge on its five-minute chart, traded sideways for a while, and now heads up again. Whew! Let's see if it can achieve a new day's high, however. Otherwise, I might advise bailing on this risky daytrade.

 
 
  James Brown   4/27/200,  12:08:59 PM
The DFI defense index and the RLX retail index are both hitting new all-time highs this morming.

 
 
  Linda Piazza   4/27/200,  12:03:30 PM
The OEX is hitting strong Keltner resistance right now, with that resistance at 558.88-558.91. The OEX may be able to nudge that Keltner resistance a bit higher, but it looks as if it may soon need to retreat toward 558.30 or 557.73.

 
 
  Linda Piazza   4/27/200,  11:43:45 AM
The OEX is now actually a little below the apex of that symmetrical triangle it established on the five-minute chart, but not falling far and rising up to test the broken rising trendline that had described the bottom line of the triangle. I'm not reading too much into the slight dip below the apex of that triangle.

 
 
  Linda Piazza   4/27/200,  11:40:48 AM
OEX Keltner support is beginning to gather at 557.08-557.33 and then at 556.34, while resistance is looking stronger, at 558.54-558.73. Upper channel resistance is at 560 while mid-channel support is at 556.34.

 
 
  Linda Piazza   4/27/200,  11:37:26 AM
The OEX prices are just issuing out sideways out of that symmetrical triangle it established on the five-minute chart. The candles are at the apex of that triangle now, or perhaps a little beyond the apex. The formation hasn't been particularly helpful in establishing direction.

 
 
  James Brown   4/27/200,  11:36:37 AM
Markets are still generally green but we're starting to see some weakness in select sectors. Slipping lower:
TRAN transports: -0.93%
GHA hardware: -0.64%
NWX networking: -0.55%
HMO healthcare: -0.95%
UTY utilities: -0.07%

 
 
  Linda Piazza   4/27/200,  11:32:53 AM
BLUD's pattern on its 2-minute chart looks like a falling wedge, which is a bullish formation, but so far it's not showing any inclination to break to the upside.

 
 
  James Brown   4/27/200,  11:30:10 AM
Trimble Navigation (TRMB) is up 11.4% to $25.47 after reporting Q1 earnings this morning. Analysts' estimates were 21 cents per share and TRMB reported 27 cents (ex-items). Revenues jumped almost 23% to $156.5 million, also above estimates. The company also raised its full year earnings estimates from 86-92 cents to 98-104 cents per share.

 
 
  Linda Piazza   4/27/200,  11:22:43 AM
The OEX has settled into a symmetrical triangle on its five-minute chart, too, and is narrowing to its apex.

 
 
  James Brown   4/27/200,  11:21:11 AM
BAC also cut disk drive maker Seagate Technologies (STX) to a "sell".

 
 
  James Brown   4/27/200,  11:20:03 AM
Western Digital (WDC) hit new relative lows this morning after Bank of America cut the stock to a "neutral". WDC has been very weak the last few days after reporting earnings that only beat by a penny last Thursday.

 
 
  James Brown   4/27/200,  11:13:32 AM
The 11:00 AM ET update is posted: Link

 
 
  Linda Piazza   4/27/200,  11:02:07 AM
BLUD is confirming a H&S on its 2-minute chart, downside target $26.89, so just above the daytrading stop. Let's see if the downside target is hit.

 
 
  Linda Piazza   4/27/200,  10:59:09 AM
That OEX 556.78 Keltner channel line that I mentioned needing to hold in my 10:23 post did hold, at least so far. By the time that the OEX dipped to that line, it had risen to meet the OEX. Keltner resistance lines string out above the current OEX position and support lines string beneath it, none clumping in such a way as to signal that the support or resistance will be particularly strong.

 
 
  Linda Piazza   4/27/200,  10:46:54 AM
Feel like a risky daytrade? This is for gunslingers only, but Jeff's 5MRT system is signaling a long daytrade in BLUD, upgraded today to an outperform rating by Piper Jaffray. Enter now, at $28.50, target $31.95. Stop $26.65. (This is not where Jeff's stop would be, but mine.)

 
 
  James Brown   4/27/200,  10:42:14 AM
The OIX oil index (+0.86%) is very close to a new high while the OSX oil services (+3.35%) is near its March highs.

Bullish traders may want to keep an eye on ChevronTexaco (CVX), ExxonMobil (XOM) and ConocoPhillips (COP). COP is just now breaking out to a new high over resistance near $73.50. XOM is a slower mover but nearing its 52-week highs and resistance at $44.00. While CVX has broken out above resistance near $92 and is approaching all-time highs.

 
 
  James Brown   4/27/200,  10:42:07 AM
Thanks!

 
 
  Jim Brown   4/27/200,  10:41:28 AM
PHM - That was correct. 300-400 basis points. He also said they were growing at 3-4 times the rate of the home market. At $7.25 earnings guidance for the year and $51 stock price that is only a PE of 14. He also said they controlled 290,000 lots. Amazing. Definitely a leap candidate - maybe Jan-2005 $55 calls for $5.20, XLZ-AK. I would probably wait for it to pull back a little before entering.

 
 
  James Brown   4/27/200,  10:39:17 AM
Did anyone catch that last sentence from homebuilder Pulte's CEO on CNBC just a minute ago? It sounded like he said it would take a 300%-400% rise in interest rates before they would impact their business but I didn't quite hear it...

 
 
  James Brown   4/27/200,  10:36:29 AM
The XAL airline index is up 1.54% in spite of the spike higher in crude oil prices to $37.50 a barrel.

 
 
  James Brown   4/27/200,  10:35:43 AM
The DJUSHB homebuilder index is up 2.44% and trading above minor resistance at 620.

 
 
  Linda Piazza   4/27/200,  10:31:23 AM
The OEX is currently challenging another version of a descending trendline on the daily chart, and is having difficult with the trendline: Link

 
 
  Linda Piazza   4/27/200,  10:23:26 AM
What do the five-minute nested Keltner charts show about support for the OEX? They show support at 558.89, stronger at 557.83, good support at 556.78, and even stronger support between 555.78 and 556.04. All those support levels are climbing, however. If the 556.78 line is breached, there's a danger that the OEX could be working its way back to mid-channel support again, near 555.78 currently.

 
 
  Linda Piazza   4/27/200,  10:19:31 AM
I see lots of talk about the Google IPO, but no mention of any IPO's to be released today. That means we won't have an opportunity to study them using Jeff's 5MRT.

 
 
  Linda Piazza   4/27/200,  10:15:59 AM
The OEX has breached upper-channel Keltner resistance on the five-minute chart. Bulls, follow the OEX higher with your stops. Such breakout signals can be valid, but this signals that the OEX is overbought on a short-term basis, and vulnerable to a pullback toward central-channel support, currently at 555.73, but rising.

 
 
  Linda Piazza   4/27/200,  10:14:01 AM
The OEX is moving above 559.50 resistance.

 
 
  Linda Piazza   4/27/200,  10:12:33 AM
The OEX is now bumping above the descending trendline off the 3/05 high and has moved above the right-shoulder level of the potential H&S on the 30-minute chart, negating that formation from consideration. It has not yet moved above yesterday's high or 559.50 resistance, confirmations of the breakout, however. Bulls should exercise caution as that 559.50 level is approached.

 
 
  Linda Piazza   4/27/200,  10:07:40 AM
The OEX is dropping back toward right-shoulder level on the possible H&S, continuing the possibility that the pattern could continue to form, but not dropping quickly enough to give anyone confidence that could happen.

 
 
  Linda Piazza   4/27/200,  10:05:12 AM
The purpose of building a scenario is to test whether the market action fits that scenario or not. The OEX is spurting higher than the shoulder level of the possible H&S on the 30-minute chart, so unless there's a sharp drop quickly, we can consider the H&S negated. Watch for a rollover, continuing the consideration of that H&S, or a push through the top of the symmetrical triangle. The OEX now challenges the descending trendline on the symmetrical triangle. Bulls, be watchful as 559.50 is tested.

 
 
  James Brown   4/27/200,  10:03:10 AM
Immucor Inc. (BLUD) is up 18.5% to $25.85 and hitting what appears to be new all-time highs. The catalyst for the move is an announcement last night that the FDA had approved BLUD to market its Galileo instrument; which according to the press release is their second generation, bidirectional, fully automated walk-away instrument for the hospital blood bank transfusion laboratory, donor centers and reference labs. (If you just read that and still don't know what it does you're not alone). The Galileo product is a testing device that can process 224 different samples at once. Piper Jaffray has upgraded the stock on the news from "market perform" to "out perform".

 
 
  Jim Brown   4/27/200,  10:00:12 AM
Consumer Confidence = 92.9, (est 90.0, last 88.3)
Existing Home Sales =6.48M, (est 6.18M, last 6.12M)

 
 
  Jonathan Levinson   4/27/200,  9:58:48 AM
A large 9.25B overnight repo replaces 4B expiring for a net 5.25B addition from the Fed.

 
 
  James Brown   4/27/200,  9:55:12 AM
J. Alexanders Corp (JAX) is a restaurant chain that's seeing a 5.9% gain in its stock price this morning after announcing that Q1 same-store sales were up 8.3%. The company is guiding earnings into the 13-15 cent range up from 9 cents a year ago (they report in May). Oddly enough investors are completely ignoring management's comments that higher food costs are pressuring profit margins. (I don't suggest trading the stock due to its extremely low volume).

 
 
  Linda Piazza   4/27/200,  9:55:01 AM
If that H&S scenario for the OEX on the 30-minute chart is going to play out, then we may have as much as an hour or so while the OEX lingers near the day's high or even makes a slightly higher high before it begins rounding down, or it could do so immediately. If we get too much past 557.25 post-consumer-confidence, then the formation will be put into question.

 
 
  James Brown   4/27/200,  9:48:35 AM
DaimlerChrysler (DCX) has received its second upgrade in two days. Today's rating outlook to "over weight" comes from Morgan Stanley. Last Friday the stock rallied strongly after announcing it would stop pouring money into its struggling Japanese partner Mitsubishi Motors. Yesterday Lehman Brothers upgraded DCX along with F and GM. The ADR shares that trade on the NYSE are now up six days in a row.

 
 
  Linda Piazza   4/27/200,  9:45:33 AM
During the first five-minute of trading, the OEX spanned a distance from 554.62 to 556.08.

 
 
  James Brown   4/27/200,  9:44:39 AM
It's not much but the SOX is just barely edging up past its 200-dma.

 
 
  James Brown   4/27/200,  9:43:09 AM
Ryder Systems (R) is down 3.66% to $37.90 after Bear Stearns downgraded the stock to "under perform". Yesterday Ryder beat estimates by a penny and only guided inline for the next quarter. The drop this morning is under what should have been support at $38.00 but still above technical support at the 50-dma.

 
 
  Linda Piazza   4/27/200,  9:41:39 AM
Here's the H&S formation I'm watching on the OEX 30-minute chart: Link

 
 
  James Brown   4/27/200,  9:40:01 AM
Whoa! There is a lot of GREEN on my screen this morning. The Dow Transports (TRAN) is the only sector index in the red!

Biggest Winners
OSX oil services: +2.14%
DJUSHB homebuilders: +1.33%
XAL airlines index: +1.56%
IUX insurance: +0.71%
BTK biotechs: +0.73%

 
 
  Linda Piazza   4/27/200,  9:35:08 AM
Depending on how you draw the neckline for that inverse H&S on the five-minute OEX chart, the OEX just opened slightly above the neckline and zoomed right up to meet the 556.00 upside target on that formation. This so far fits the scenario I've been building, but that scenario would now include perhaps a steadying or another slight rise, up to 557.25 or so and then a steadying as a possible right shoulder forms on the 30-minute chart. Let's see, though.

 
 
  Jane Fox   4/27/200,  9:17:50 AM
Dateline WSJ Google exists to make information accessible and useful. But when it comes to its initial public stock offering, the Internet-search powerhouse has created an ultrasecretive process the likes of which Wall Street has never seen.

Google Inc. executives banned investment bankers from its Mountain View, Calif., campus last year. Those bankers lucky enough to be briefed on the plans had to sign affidavits swearing they wouldn't leak details to the press. Some early Google investors say they still are in the dark about the IPO plans.

Google is a rare start-up that wields so much power it has insisted on carving its own path through the well-established IPO process. Its distinct culture and desire for control have reshaped the normally staid system, creating tension between the company and its bankers. The company's expected stock offering comes at a time when Wall Street still is recovering from a series of IPO scandals that reduced the number of new offerings after the tech bubble burst, making the bankers more amenable to Google's demands.

 
 
  Linda Piazza   4/27/200,  9:17:31 AM
As occurred yesterday, today has us on the lookout for a breakout from the symmetrical triangle on the OEX daily chart. When talking about such a breakout yesterday morning, I mentioned that we often see a false breakout or two and some increased volatility as a triangle narrows enough to allow prices to move from one boundary to the other during the course of a single day. While the OEX didn't span that entire distance yesterday, it certainly gave a false breakout.

All that advice from yesterday should be repeated today, with yesterday's trading pattern reinforcing my conviction that 559.50 may be tough resistance for the OEX. OEX 561.23 is the 38.2% retracement of the bear-market decline and 563 has been known historical resistance. Still, charts from 120-minute down to 5-minute show the possibility of an early bounce today, but perhaps a lower bounce than yesterday's. The OEX hit support from the 30-, 60-, and 120-minute pma's yesterday and bounced from that support. That's usually a buy signal, but one problem exists. The 30-minute chart shows the possibility of a H&S forming with a near-554 neckline and with a right shoulder yet to be fully formed, suggesting a possible bounce up to form that right shoulder, up to 556-557. The five-minute chart shows a possible inverse H&S, albeit a roughly formed one, suggesting the possibility of a bounce if the steeply descending neckline near 555 is violated to the upside. That five-minute inverse H&S may be suggesting the move that could form the right shoulder on the larger chart.

All of this is speculation, of course, building a scenario to be tested against market action this morning. According to that scenario, there's a possibility that we'll see another test of the upper boundary of the symmetrical triangle, perhaps in the period leading up to the release of the consumer confidence number at 10:00. The release of that number complicates our decisions today, as it's common to see the first move after an important economic release not be the final reaction. Will we then see a break out of the symmetrical triangle at about the time the consumer confidence number is released? If so, will it be the real deal or another fake-out move?

By the nature of symmetrical triangles and the way oscillators behave during such formations, we just don't have a lot of clues as to direction, so traders who want to participate in a move are left with the need to follow the prices, being prepared to jump out quickly if they're proven wrong. Before deciding that I needed to participate, however, I'd sure want to have volume patterns and other collaborating evidence that I was taking the right side. As several writers mentioned yesterday, the pop in the volatility indices gives us a heads-up, but I often notice them rising as important resistance or support is reached so that's far from conclusive evidence as yet. I'm also keeping my eye on those inverse H&S's displayed on several indices' daily charts. Although I don't trust a continuation inverse H&S, we did see some perform well over the last year, so they bear watching.

 
 
  Jonathan Levinson   4/27/200,  8:04:58 AM
We await the 10AM release of Consumer Confidence for April, est. 88.5.

 
 
  Linda Piazza   4/27/200,  7:06:31 AM
Good morning. Good news was apparently bad news in Japan, too, with one article crediting the strong U.S. new homes numbers with sending exporters lower in Japan. By the close of the morning session, the Nikkei was down 138.68 points, and it closed the day down 119.01 points or 0.98%, at 12,044.88. Those strong U.S. home sales supposedly advanced the sooner-rather-than-later rate hike theory, causing many to worry about a slowdown in demand in the U.S. Exporters weren't helped, either, when Nissan revealed record net profits for the year just ended but forecast that operating margins would decline. Exporters headed lower, with car makers leading the pack, credited with 15% of the decline at one point in the morning session. As it's been doing lately, Mitsubishi Motors bucked the trend, but this time the troubled company was on the up side of the seesaw, headed up as buy-the-dippers finally felt ready to face that falling knife. Most banking issues closed lower.

Most of the losses were attributed to profit taking after Monday's new high, but some issues reacted to other pressures. Advantest perhaps at least partially declined due to a sell-the-news reaction after Monday's report of a profitable year, but it was also likely reacting to a recent decrease in DRAM prices, one analyst theorized. Kyocera, a chip equipment maker, and Sony headed lower ahead of their after-the-close earnings reports, with both closing lower, too. Sony said that profit for the next year would increase 13% due to rising demand, but one article noted that profit forecast fell below analysts' estimates. All Nippon Airways announced that it would be the first airline to buy Boeing 7E7 Dreamliners, with an order for 50 new planes, and the news sent it lower by 1.2%. Finally, as a heads-up, the Nikkei will be closed on Thursday of this week and Monday-Wednesday of next week.

Other Asian bourses turned in mixed performances. The Taiwan Weighted lost 0.95% and South Korea's Kospi declined 0.46%. Singapore's Straits Times gained 0.23%, however, and Hong Kong's Hang Seng gained 0.18%. China's Shanghai Composite lost 1.45%.

Most European bourses currently trade lower with profit-taking or a need to consolidate gains being pegged as the reason for declines in Europe, too. In stock-specific news, both Aventis and Sanofi-Synthelabo showed mild gains in early trading after yesterday's news that Aventis had agreed to be acquired by Synthelabo. Software AG, a Germany business software producer, raised its operating profit outlook, with one article mentioning cost-cutting efforts as being at least partially responsible. Today Credit Suisse Group restated its 2003 results in U.S. GAAP accounting standards. The move had been expected and was intended to make it easier to compare its results to those of its peers. Results of the switch included the following, according to the bank and other sources: unaudited net income fell 85% from the Swiss GAAP result, the Group's net loss for 2001 and 2002 declined, and net profit for 2000 increased. In other stock-specific news, BP is said to be considering introducing an IPO for an unprofitable unit of its petrochemicals business.

As of this writing, the FTSE 100 trades lower by 20.20 points or 0.44%, to 4551.60. The CAC 40 trades lower by 5.51 points or 0.15%, to 3780.04. The DAX trades lower by 8.34 points or 0.20%, to 4117.49.

 
 
  OI Technical Staff   4/26/200,  6:57:13 PM
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