News of a response to Syria’s use of gas can come at any time, most likely tonight or over the weekend and last for several days.
It would be risky to buy a “gap” open on the upside if the initial response in the market is a huge rally. Gap opens often give an investor the high for the day, or a poorly positioned buy.
Next week we get the Employment Situation report, which may have a bearing on the decision to taper, or not, by the FOMC during its two-day meeting ending on September 18 followed by a Bernanke press conference at 2:30.
Playing on investor sentiment at the same time will be bitter debate over raising the nation’s borrowing limit (debt ceiling) expected to deadline in mid-October.
CONCLUSION:
I have my doubts about taper beginning in September if the economy doesn’t gain traction in the interim.
I have my doubts about a U.S. government shut down over a refusal of Congress to raise the debt limit.
Most of the stocks listed below have taken big hits, that’s one of the reasons I added them to this list. Most have a little bit further to go on the downside, IF the BIG money stays on the sidelines.
This is a good time to prepare a list of buy candidates, since opportunity to strike may be brief.
TODAY: Minor resistance starts at DJIA 14,858 (S&P 500: 1,637). Breaking that, the DJIA can move up to14,906 (S&P 500: 1.643).
A break below DJIA 14,760 (S&P 500: 1,627) calls for a test of the June 24 lows –DJIA: 14,551 (S&P 500: 1577).
Investor’s first read– an edge before the open
DJIA: 14,824.51
S&P 500: 1,634.91
Nasdaq Comp.: 3,593.35
Russell 2000: 1,016.50
Thursday, August 29, 2013 (9:12a.m.)
TECHNICAL OBSERVATION – STOCKS:
The following are observations based solely on technical analysis and don’t give consideration to fundamentals or changes in brokerage ratings which can have an immediate impact on stocks, justified or not. The idea here is to give readers insight into the likely trends and turns in the stock’s price, short-and long-term.
I picked up on AAPL and FB last year when they were in a tailspin, and picked up on IBM, Pulte, First Solar, Target, and Hewlett-Packard recently for the same reason. These are not buy or sell recommendations, and are not stocks I have recommended.
NOTE: Expect support and resistance levels to change more frequently under adverse and uncertain conditions like those we are experiencing presently..
WARNING: This market is highly “news sensitive,” with everything at the present negative. Any break for the better in the mid-East, taper, or in the threat of a government shutdown in October will trigger a rally, especially in stocks below, since they have been hammered already.
Apple(AAPL: $490.89 )
Note: Targeted at $385 the Turn around Apr. and Jun. 2013 (double bottom). This is a follow up.
Pattern: Positive, consolidating recent up move.
Resistance: $493
Support: $487 – 489 – AAPL still in consolidation and probing for a level that discounts new negatives in overall market. Icahn must like this. Can’t get in his head, but I’d guess he’ll nibble a shade below $490, which I am upgrading here.
Facebook (FB – $40.54 )
Note: Targeted below $18 for a turnaround Sept. 2012, this is a follow up.
Pattern: Positive –
Support: Yesterday’s rally indicated buyers at $39.50. I can see a slip below $40 to $39.50.
IBM ($ 182.16 ) No change from Friday
Note: Started coverage Aug. 7, 2013 after big plunge in stock
Pattern: Negative
Resistance: $182.40
Support: Got down to my target on of $181. Look for break below $180, but after attempt to hold at $180.75. Be aware that IBM has ranged four times up and down between $185 and $215 over the last two years. Unless the fundamentals are horrendous it is due for institutional buying, most likely in this area and possibly at or a smidge below $180.
Right now, there are sellers that must be taken out.
Each point up or down impacts the DJIA by about 13 points.
PulteGroup (PHM- $15.38 ) Alert –
Note: Started coverage Aug. 12, 2013
Pattern: Neutral, but weakening
Resistance: $16
Support: $14 – The price of lumber is dropping, not a good sign. Mortgage rates at two-year high. Should pause briefly at $15.24, but odds favor $14 before the weekend.
First Solar (FSLR:$36.92)
Note: Started coverage: Aug.: 22, 2013
Pattern: Negative, ran into sellers at $40, again at $39. Big gap between $46 and $42 will be hard to work through. Yesterday’s action hurt chances for near-term rally.
Resistance:$37.40, possibly $38.
Support: Got some buying at $36.75 yesterday but still vulnerable to drop to $32.75
Target (TGT:63.27)
Note: Started coverage Aug: 22, 2013:
Pattern: Negative
Resistance: $63.40
Support: $61.20
Market action last 4 days was ugly ! Stock needs big buyer or it is headed for $61 – $62. TGT’s drop from $73.50 is unnerving and may suggest the consumer is temporarily tapped out.
Hewlett-Packard (HPQ:22.61 )
Note: Started coverage Aug. 23, 2013
Pattern: Negative, probing for comfort level
Resistance: $22.85.
Support: $22 was tested yesterday and HPQ looks like it can hold in this $22 – $23 area. $19.85 is possible in a bad market.
eBay (eBay:50.43) Needs good news, or breakdown likely
Note: Started coverage Aug. 28, 2013
Pattern: Neutral/bearish
Resistance: $50.88
Support: $49.90 Stock should get a buyer in here as it has on five occasions when it ranged between $50 and $58 this year. If that happens, the intensity of that rally must be studied. Failure to develop heavy volume suggests a break below $50 and drop into the mid-40s. If there are bulls out there, they should find this price attractive and make their move. If $50 isn’t attractive, the stock has a big problem.
Amazon.com (AMZN: 281.58)
Note: Started coverage Aug. 28
Pattern: Bullish, but correction must find support soon
Resistance: $283
Support: $268 – $272 is the “risk” here. Even though yesterday’s action was unimpressive, there is some buying interest at 281.
I do not own, nor am I short AAPL, FB, IBM, PHM, FSLR ,TGT, HPQ, EBAY, AMZN.
ECONOMIC REPORTS:
Heavy schedule this week, also speeches by Federal Reserve officials
For a detailed account of past and current economic reports, including charts go to: mam.econoday.com – www.mam.econoday.com
MONDAY:
Durable Goods (8:30) Down 7.8 pct vs. projection for a 4.0 pct decline, Ex transportation was a drop of 0.6 pct.
Dallas Fed Mfg (10:30) August index dropped to 7.3 from 11.4. New orders were 5.4 vs 10.8.
TUESDAY:
ICSC Goldman Store Sales (7:45) Index rose 0.2 pct for week ended 8/24
S&P Case-Shiller Home Prices (9:00) June +12.07 pct. y/y vs. +12.20 pct May
Consumer Confidence (10:00) August index better than expected at 81.5 vs. 81.0 July
Richmond Fed Mfg. Ix. (10:00) Up big in August with index plus 14 from a minus 14 July. New orders index plus 16 vs. minus 15
WEDNESDAY:
Pending Home Sales (10:00) July down 1.3 pct. vs. drop of 0.4 pct June
THURSDAY:
Q2 GDP (8:30) +2.5 pct. at annual rate. Comparisons affected by annual revision
Jobless Claims (8:30) down 6,000 to 331,000 for week ended 8/24 vs. 336,000 for prior week.
Corporate Profits (8:30) No proj.
Bloomberg Consumer Comfort Ix. (9:45) No proj.
Fed’s Jeffrey Lacker speaks (2:00)
Fed Balance Sheet (4:30) Proj.:
Fed’s James Bullard speaks (7:45 p.m.
FRIDAY:
Personal Income/Outlays (8:30) Proj.: Jul. PI +0.2 pct., Expenditures +0.3 pct
Fed’s James Bullard speaks 9:00)
Chicago PMI (9:45) Proj.: Aug. index 53.0 vs. 52.3 Jul.
Consumer Sentiment (9:55) Proj.: Aug. index 80.0
RECENT POSTS: 2013
Aug 15 DJIA 15,337 “October Buying Opportunity at Much Lower Levels”
Aug 16 DJIA 15,112 “Fed Pressed for Clarification – Rallies Suspect”
Aug 19 DJIA 15,081 “Will Fed Intervene to Stop the Carnage ?”
Aug 20 DJIA 15,010 “Rally Ahead of Wednesday’s FOMC Minutes”
Aug 21 DJIA 15,002 “No September Taper = Bad For Stock Market”
Aug 22 DJIA 14,897 “Street’s Angst Not About First Taper, but……”
Aug 23 DJIA 14,963 “Big Day: Rebound or Rally Failure ?”
Aug 26, DJIA 15,010 “Fed Policy Change – Big Impact on Stock Market ?”
Aug 27 DJIA 14,946 “No Quick Solution for Market’s Negatives – DJIA 14,250 ?
Aug 28 DJIA 14,776 “What Now for AAPL, FB, AMZN, FB, IBM, HPQ, etc. ?”
George Brooks
“Investor’s first read – an edge before the open”
……………………………………………..
The writer of Investor’s first read, George Brooks, is not registered as an investment advisor. Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. Readers are expected to assume full responsibility for conducting their own research pursuant to investment decisions in keeping with their tolerance for risk. Brooks may buy or sell stocks referred to herein.
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