Intraday Investments Stalk Sheet for July 9, 2001
The week of July 4th turned out to be a great week to be short the market. What was suppose to be a slow paced, low volume and even boring time in the market turned out to be a perfect down trend. Earnings warnings and some key economic figures fueled the fire. Coming into Monday we must exercise caution on the short side since the market has gotten blasted in the past few days. If we see a light volume gap down in the markets on Monday, we will in all likelihood fade the gap. With this in mind, here’s our thoughts for Monday.
Many sectors and consequently the major indices are near major support levels or in the danger zone. We must tread carefully as the market could reverse the downtrend soon.
The Biotech Sector broke the neckline of a head and shoulders pattern (daily chart) and looks to be headed for the 541 range.
Keep an eye on the Bank Sector Short ($BKX.X). This sector is in danger of breaking it’s trend line and is setting up to form a head and shoulders on the daily chart. The BKX looks like it wants to drop to its 200 m/a on the daily.
Longs:
NEM, Newman Mining, Long > 18.60, Precious Metals
Stock has stabilized the past two days after a multi day sell off. Tried to break below 18.00 for the second day in a row on Friday but rallied back to form a long legged doji. With solid volume and a cooperative market, above 18.60, NEM could see 19.00.
BRCD, Brocade, Long on gap down > 29.50 with light volume, Computer Storage
When a stock drops 25% in one day on over twice the average daily volume, a bounce is likely (even if it’s just a dead cat bounce). This is especially true if BRCD gaps down into support (at 29.50) on light volume.
NTAP, Network Appliance, Long > 11.90, Computer Storage
Above 11.90, NTAP breaks above the declining 40 m/a on the 15 min chart and into the gap formed on Friday. This stock closed almost at the high of the day on excellent volume in a sector that got clobbered on Friday. This is a sign of excellent relative strength. If the market rallies on Monday, NTAP should be one of the first stocks to follow.
Shorts:
DOW, Dow Chemical, Short <33.60 and then < 33.25, Chemical Sector, $CEX.X
DOW loses key Fibo support at both of these price levels. However, be aware that the $DJX is resting on a key Fibonacci support level of its own and could easily rally on Monday.
PX, Praxair, Short <45.80 then 45.30, Chemical Sector, $CEX.X
Stock closed near the low of the day on increasing volume. If stock loses 45.80 it should see 45.50 quickly. Below 45.30 PX should see 44.00.
MMM, Minn. Mining & Mfgr., Short < 113.70, Chemical Sector, $CEX.X
Sold off on increasing volume on Friday and closed near the day’s low. Below 113.70, MMM should see 112.30.
BAC, Bank of America, Short < 58.00, Banking Sector, $BKX.X
Sold off hard on Friday on serious volume. Breached up trend line for the first time since April 6th. Below 58.00 BAC should see 56.80. Will also consider shorting BAC if it rallies on weak volume to 59.00 which is a key Fibonacci resistance zone.
FBF, Fleet Boston Financial, Short < 37.98, Banking Sector, $BKX.X
Below this price FBF loses a key support zone and with a cooperative market and strong volume should see 37.00. Below the 37.80 – 37.98 range constitutes the break of the neckline of a head and shoulders pattern on the daily chart. If we do break the neckline, FBF becomes an excellent swing trade to the 34.50 area.
FTU, First Union Bank, Short < 33.52, Bank Sector, $BKX.X
Below 33.52 FTU loses major Fibonacci support and the 200 m/a on the 60 min chart. This move also constitutes a trend line break on the daily chart that was initiated on Friday. FTU should see 32.40 below here.
CRA, Celera Genomic, Short < 34.95, Biotech Sector, $BTK.X
This stock gapped down on Friday on increasing volume and is now rallying up into resistance. Will take it short below Friday’s low or on a continued light volume rally into resistance at 36.20.
ELN, Elan Corp, Shot < 59.50, Biotech Sector, $BTK.X
This stock breached its up trend line for the first time in several month on Friday. But, it did rally back up above the trend line. However, with a weak Biotech sector and weak market, ELN should see 58.20 in a hurry if it falls below 59.50.
Trade Well Today!
Ed, Deron & Steve
General Partners
intradayinvestments.com |
