Damaged Bull Regains Footing

Traders,

Market Bias:

NO BIAS

In this week’s edition you will find:

  • Where We Are
  • What Was Important About Last Week
  • What We Are Watching For This Week
  • A Word On Discipline

CANSLIM SETUPS

Where We Are:

Taking a look at the broader market:

The holiday shortened week gives little evidence to support a strong bias.

As the indexes climb above their 50-day MA’s we are encouraged to see Telecom, Energy and Biotechnology establish new highs.

But the broader picture portrays a damaged bull trying to regain its footing.

Though conditions lean slightly toward a positive environment for longs, it’s not enough to take a full swing at.

We’ve taken advantage of setups in Energy, as mentioned for subscribers, but few stocks are meeting our strict fundamental guidelines.

April tends to be a strong month for the indexes. We want to take things on a day-by-day basis, keeping an eye on price and volume for further clues.

Technically speaking:

The Dow Industrial Average

($INDU), +1.7%, claws its way back above the 50-day MA.

The S&P 500

($SPX), +1.6%, regains its 50-day MA.

Nasdaq

($COMPQ), +2.1%, closes at the gap left from early March’s downpour, and also conquer its 50-day MA.

Russell 2000

($RUT), +1.6%, trades above its 50-day MA for the second week in a row as it shows relative strength against the other major indexes.

Volume indications confirm an uptrend with a Follow Through Day in the books backed with an additional accumulation day across the indexes.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The U.S. Dollar Index slides to a new low for the year, trading well below its major MA’s.

The Gold & Silver Miners Index moves further above its major MA’s, coming closer to knocking out a bearish head-and-shoulders pattern.

The Consumer Index and Cyclical Index trade comfortably above their major MA’s.

The Technology Index recovers above its 50-day MA, with much work to do before regaining highs made for the year.

The Semiconductor Index consolidates in a trading range, closing just above its 50-day MA.

The Banking Index hugs its 200-day MA, trading below its 50-day MA.

The Broker Dealer Index trades between its 50-day and 200-day MA’s.

The Retail Index finds resistance at its 50-day MA.

The Software Index moves closer to a new high.

The Telecom Index hit a new high.

Healthcare cruises north of its 50-day MA, moving closer to a new high.

Biotechnology hit a new high.

REIT’s struggle below the 50-day MA and above the 200-day MA.

Transportation hugs its 50-day MA, with much to recover before regaining a new high.

The Energy Index broke out to a new high.

What Was Important About Last Week

STOCKS:

Immucor (BLUD) reported third quarter earnings of $0.21 per share, $0.02 better than consensus. Revenues rose 21.3% year over year to $57.1 million versus consensus of $55.1 million.

Micron (MU) reported a second quarter loss of $0.07 per share, $0.06 worse than consensus. Revenues rose 16.5% year over year to $1.43 billion versus consensus of $1.47 billion.

ECONOMY:

The ISM non-manufacturing business barometer (a measure of production growth in the services sector) declined to 52.4 in March from 54.3 in February. The consensus expected a rise to 55.5.

The ISM Manufacturing index fell to 50.9 in March from 52.3 in February. The consensus expected a smaller drop to 51.1.

What We’re Looking For This Week

Key earnings releases:

  • MONDAY: Schnitzer Steel Industries, Inc. (SCHN)
  • TUESDAY: ALCOA Inc (AA)
  • WEDNESDAY: Bed Bath & Beyond Inc. (BBBY), Christopher & Banks (CBK), Genentech, Inc. (DNA), Research In Motion Limited (RIMM)
  • THURSDAY: Commerce Bancshares, Inc. (CBSH), Fastenal (FAST),
  • FRIDAY: General Electric (GE), Infosys Technologies LTD (INFY)

On the economic front we have potential market movers with:

  • MONDAY: none
  • TUESDAY: none
  • WEDNESDAY: Crude Inventories, FOMC Minutes, Treasury Budget
  • THURSDAY: Export Prices ex-ag., Import Prices ex-oil, Initial Claims
  • FRIDAY: Core PPI, PPI, Trade Balance, Mich Sentiment-Prel.

The Following Sections Are On Our Home Site:

This Week’s Word On Discipline:

“When things are steep, remember to stay level-headed.” – Horace

CANSLIM SETUPS

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