Intraday Investments Stalk Sheet for Friday, August 9, 2001
The market action was choppy on Thursday with a the Nasdaq Futures caught in a trading range of 1611 – 1648 and the S&P Futures trapped between 1178 – 1189. The S&P futures seem to have formed an inverse head and shoulders on the 15 min chart. Above 1189 on the S&P would constitute the penetration of the neckline and implies a run to 1198 with resistance along the way at 1194.
In after hours action, as of 10:50 pm edt, the Nasdaq Futures are up 5.50 pts and the S&P Futures are plus 2.20 pts. We expect to see a rally in the markets tomorrow but we are only mildly bullish.
There are no companies reporting earnings from our sector model for Friday August 9, 2001.
Economic data due out Friday includes: PPI and Core PPI numbers for July.
As a general comment, I did not like the set ups (either long or short) coming into Friday. Although it appears that we should see a relief rally on Friday, there was a lot of overhead resistance created by the sell off in the markets on Wednesday. The violent nature of the sell off has created many price spikes/head formations and thus significant upside resistance. The best play may be cash or shorting stocks that rally into major resistance zones. Be careful to watch volume carefully and be prepared to take profits quickly on the long side.
LONGS:
JNJ, Johnson & Johnson, Long >54.05, Drug Sector-Major Drug Co’s, $DRG.X
JNJ closed the day near the high on solid, increasing volume. This stock held up well exhibiting good relative strength during the blow-out in the markets on Wednesday. Above 54.05 we break a key resistance zone that has been tested 3 times in the past 4 days. Will see some resistance at 54.20 – 54.40 zone but above this JNJ should see 55.00.
SBUX, Starbucks, Long > 18.30, Retail-Consumer Non-Cyclical, $RLX.X
This stock saw its first significant reversal day in 3 weeks on Thursday. Above 18.30 we break the high of the day and a key Fibonacci resistance zone.
NTAP, Network Appliance, Long >14.28, Computer Storage-Storage Hardware
This stock recovered off a morning sell off to close near Thursday’s high. An increase in volume is critical. Above 14.28 we break the 200 ma on the 15 min chart and the 40 ma on the 60 min chart. First resistance at 14.55 then 15.00.
STJ, St. Jude Medical, Long > 64.60, Healthcare-Equip and Supplies, $HCX.X
After 7 days of relentless selling this stock finally formed a base and a reversal candlestick pattern (doji) on Thursday. Above here we break Wednesday’s high, the 20 and 40 ma’s on the 60 min chart, the 40 ma on the daily chart and the 200ma on the 5 min chart. Volume must be strong for the rally to succeed.
SHORTS:
AFCI, Advanced Fibre Communications, Short < 25.16, Networkers-NGPS & ME, $NWX.X Perfect head and shoulders set up on the daily chart. Below 25.16 we begin the break of the neckline with the last leg of support around 24.91. There should be some support on the daily at the 200 ema at 24.50. Below 24.50 we fill the gap to 22.75.
MOT, Motorolla, Short < 17.76, Cell Telephone HW/SW
Motorolla broke below key support on the daily by closing below the 200 and 20 ma’s. Below the Thursday’s low of 17.76 we break the 200 ma on the 60 min chart and should see 17.00.
INKT, Inktomi, Short < 5.25, Internet- B2B, $IIX.X
Below here we break a 6 day trading range on our way to Fibo support at 5.05 and then 4.80. INKT closed near the low of the day on Thursday on strong volume.
Trade Well Today!
Ed, Steve & Deron
General Partners
intradayinvestments.com |
