Market averages.
Here's an interesting article from Barrons on several good contrarian indicators. The CBOE volatility index, equity put/call ratio, and volume of S&P 500 puts are good contrarian indicators when they reach extremes like we have now.
exchange2000.com
The low on the Nasdaq Friday just touched it's upward sloping lower daily bollinger band. It bounced and closed near the intraday high, and higher on the day. This is extremely bullish short term. I'd look for a move to 1670 and then 1760 if it closes above that.
The DJIA traded slightly below it's lower daily bollinger band on Friday but closed well above it. This too is bullish. My target is 7925 and then 8170 if it closes above that.
The SPX, OEX, and SOX all held support at their lower daily bollinger bands as well. My targets are SPX: 1025 and 1070, OEX: 497 and 520, SOX: 215 and 228.
The bottom line is that a lot of things are lining up at the same time for a rally. The indexes all tested and bounced off important support levels on Friday and the put/call ratio and VIX are signaling a rally. Several individual issues that I follow also tested and bounced off support levels on Friday.
Here are some of my favorites based on where they are trading relative to support and resistance, risk to reward, and chart patterns. I think each of these stocks has 10 to 15 percent of upside potential versus about 5 percent of downside risk.
Banks: BKB, CCI, ONE
Retail: AZO, BBBY, CC, DDS, IBI, LTD, SKS (riskiest)
Medical Technology: ADAC
Semiconductors: ADI, ATML, LRCX, LSI, TER
As always, comments are welcome.
Dan |
