Intraday Investments STALK SHEET for Friday, June 15 2001
As yesterday's weak performance of the Networkers and Semiconductors predicted accurately, the Nasdaq broke the rather critical support area of 2050 – 2075 today and closed at the lowest price seen since April 26. If the Nasdaq declines neatly, the next big test would be the 2000 level (COMPX), which the Nasdaq needs to hold in order to avoid retesting the lows of early April. However, the market is a tricky animal we are not yet confident that we’ll head straight down in an orderly fashion, despite today’s selloff.
The Dow broke below support of 10,800 today, which had previously served as support since the end of April. Sitting below its 50-day MA and just above the 200-day MA, it will be interesting to see whether the Dow holds its 200 MA, which currently resides at 10,635. If not, it could get real ugly in the Dow very quickly. The most likely scenario, however, is that we attempt to bounce off of the 200 MA for a few days before going below it.
Once again today, the Banking sector is on our Stalk List in the advent of a reversal in the Dow. The BKX is oversold here, with seven consecutive days of lower closing prices. In addition, the BKX has crossed down into the 200 period MA on the daily, which should serve to give the sector at least a one to two day bounce. The exception to this would be if we gap down well below the 200 MA, which would subsequently cause the 200 MA to become resistance instead of support.
The Semiconductor index closed just above support of 600, which means we are likely to see a bounce in the semis tomorrow unless we just blow through that 600 level to the downside. Watch the large cap semis to lead the way of the index.
A reminder -- Friday is Triple Witching Options Expiration. As a result, beware of erratic price movements and stock manipulation as the institutional powers attempt to move stocks to their desired strike prices. It will be a good day to use reduced share size in your trading. There is nothing wrong with taking a well-earned Friday afternoon off, although we’ll be at the battle stations to serve you!
On a personal note, we'd like to offer our sincerest thanks for our tremendous customers that uncloaked to stick up for us in to the attack on our credibility from two grossly under-informed thread-hacks. They arrived on our thread today seemingly to display some kind of advanced case of personality/anger dysfunction -- in full, glorious bloom on their very first posts. That seems to be an evil lurking close at hand on many SI threads... and gave us serious pause before starting a forum here. Our attitude about it is summarized well in our thread summary. Anyone violating rule #1 or rule #2 (in our thread summary) flagrantly will be permanantly banned from posting on this moderated thread. We have already accumulated a dunce-cap rollcall of three "anger/attack cases" -- including the two new ones who distinguished themselves today.
We think it would be pretty hard for us to "fake" our real-time stock and option trading service since it's done live, with a a lot of experienced fellow traders watching our every move every day and all of our trade entries, adjustments, and exits going onto our position minder board throughout the day. That makes it quite impossible to fake the daily trading summary! As for a financial relationship with MB Trading, there is none. We simply think they're great! But there are always a lot of the psychologically unstable types looking for the Black Helicopters. But then again, maybe we're missing something -- hey, what is that Black thing hovering over our building? ;))
Your moral support is especially appreciated by us after putting in months of 18 and 20-hour days to build the room up into an high-quality, top-class operation. Your comments strongly energize all three of us to once again redouble our efforts!
Here's to a great trading day for each and every one of you on Friday!
Deron, Steve, & Ed
General Partners
Intraday Investments
---
Potential Longs:
JPM, J.P. Morgan Chase Long > 43.80, Banking Sector, $BKX.X
On a 50% fibo retracement from its lows of June 12 to the highs of June 13, which is where the stock will turn around and head higher if the reversal off the lows is to continue. More tails than a pack of dogs. Entry depends on strength of the Dow and the BKX.
BAC, Bank of America Long < 57.00, Banking Sector, $BKX.X
We will look to go long on a light-volume gap down to just below its rising 40 MA, which the specialist will try to do in an attempt to take out stops. Therefore, we are only looking to buy on a gap down below 57. Stock has been showing relative strength to the banking sector, as it has not broken below its rising 40 period MA on the daily. This is a high-risk play as BAC just broke down out of a trading channel, so we’ll only take it if market conditions are just right.
WFC Wells Fargo Long > 43.80, Banking sector, $BKX.X
High volume selling on Thursday after five consecutive down days, which brought this stock right down to the lower channel support of its downtrend line started in January. Just looking to play this one for a technical bounce once it trades above Thursday’s close on strong volume.
PVN Providian Long > 52.70, Banking sector, $BKX.X
We will look to go long once it trades above its 200 period MA on the daily, which is just above today’s close. This one could produce a nice bounce if we trade up!
DELL, Dell Computer Long > 26.25, Computer Hardware sector, $HWI.X
If alert is triggered, DELL will have broken above its converging 20, 50, and 200 MA’s for the first time in a year. Stock has tried to break through 200 MA three times in recent months, and the odds of breaking through on the fourth attempt are good. High volume would likely ensue, generating a strong rally above that price.
SANM, Sanmina Corp. Long > 22.80, Computer Hardware sector, $HWI.X
Stock formed a “doji star” on heavy selling volume today, after four consecutive down days. We will look to go long on a meaningful move above today’s close.
Potential Shorts:
SUNW, Sun Microsystems Short < 15.40 or light volume gap-up to > 15.90, Computer Hardware Sector, $HWI.X
Stock lost support of 16 today and doesn’t have any major support until 14 area.
AMD, Advanced Micro Devices Short < 27, Semiconductor sector, $SOX.X
AMD is sitting right at the neckline of a head and shoulders that was formed on the daily. If it breaks below the neckline at 27, this will likely lead to a multi-day move down with our logical target being the 200 MA at around 24.
=== |
