Stock Tiger Update

For  Monday August 14, 2006  

The general market lost ground this past week but still above the June/July lows. The Dow was down 152, Nasdaq 27 and Russell 2000 22. The Fed left the short term rates were they were and this is the first time since May of 2004. They said that there are still inflation risks and so still uncertainty which the markets do not like. There is still a 50% chance of another hike this year priced in. There is that and now the concern over how slow will the economy get. Most of the S&P companies have now reported and they put in average 16% earnings gains over the same period last year. There was an increase in June's retails sales sp the consumer has yet to slow down it their spending.

The market is forward looking and wants to "price in" future conditions. Most all feel there is going to be a slow down but with the extent unknown the markets drift. This coming week we have PPI on Tuesday and CPI on Wednesday. To strong and economy then the Fed may tighter again and too soft then the question of "soft landing" or recession come to mind.

We watch the overall trend as when it does eventually turn up then we will be more aggressive with some buys and increase holding times.

The Dow shows it has returned to the trend line and is now at the 9-weeek EMA. It does not give us much to go on except that the buyers have come in the last coupe of short term dips.

The 60-min chart shows the support more clearly and a break of this support could trigger a sell off back to test the lows.

The Russell 2000 is not as lucky as it is much closer to testing the J/J lows.

Again - here is the longer term view of the Russell and watching the lower trend line as a break there may take it to the 38% retrace at 615.

The Dow Jones Composite broke the shorter term trend to the downside this week but is now at the lower trend line. A break below the 38% retrace could take it to the 50% in time.

The NYSE advance decline issues is still above its trend line break  though it at the moment hoes has s distinct small head and shoulders pattern.

The NASDAQ closed at the bottom of the range. if you look at the May and June congestion periods circled you see they were just under 14 trading days before a larger move. Perhaps this week we will see a bigger swing as well. The support and resistance are near.

We looked at the Biotech index back in May and it was at the 50% retrace an was a buy and it rallied to the 50-day EMA. It is again at the 50% for the 3rd time and is not looking so good. Strength in biotech is a good sign for the market as it is more speculative and is a good signal of investor confidence. I have about 55 biotech stocks on my list and look at all the charts and found no compelling buys there. Same is true for Nanotech.

The BTK chart (biotech) shows the bearish 50-200 crossover and it is now testing the spring bottoms.

Here again is the yield curve and you can see it still negative. The longer it stays then the greater the chances of a recession. In this weekends Barrons they mention that of the 8 times in the last 40 years it has turned negative, 6 of those times s a recession followed. This would not likely happen for 6-9 months is it does though.

Gold as expected is dipping again. This is seasonally a weak time for the metal and may continue all month but Autumn is generally a good time so we will watch toward the end of this moth or in September for some buying set ups.

The Gold Bugs is back to its trend line and we expect it will drop below this week. We see very few short of medium term buys in gold stocks though silver a bit stronger. There are some gold stocks that can be shorted. Maybe we will show some in the next update.

With the US markets in the summer congestion - take a look at how the Russian stock market has come back from its correction this spring. It dropped to the 50% retrace and is not now so far away from its all time highs. This is after tripling in value in a year. Amazing.

There are several Russian stocks that trade in the USA as ADRs. The most popular are VIP, TNT, ROS and MBT. A larger list of some trading on the OTC or pink is here

Another Russian play is the Templeton Russian fund. TRF on the NYSE. It also tripled in a year. It pulled back this spring an is now at a possible break out above $71.70.

Now lets get to some USA stocks. We have none this week that will be making 100% moves - maybe we can find some later but that type is hard to find now.

CRAY had a great week from the support pullback it is up $2.50 and now near a possible break out again. Volume has fallen off though so would want to see a return of larger volume.

CREE is one that had been falling quite some time and we has it on a break out watch for above 20 area. Friday it has a larger short covering rally and this may continue. Watch for a trend line break with the first target back to the 20 area.

CQB is our pullback candidate shown before. I got a bit on Friday at the 50% retrace but it closed just below that area. I am quite certain we will see a reversal but that gap can make the turning point a bit more tricky. Some may think they can wait until the gap fills but this type of gap should not fill. It will turn when finally enough buyers bring the price back up enough that it scares those on the sidelines that they may miss the boat so they pile on causing the shorts to cover. I had never played this stock before and was surprised at the size of the trades as it is not the type of company I associate with such blocks of shares.  8,000 shares in one trade is $120,000 and one expects that with high tech or Dow stocks but not bananas, but there are quite a few big trades like that.

HANS is probably not a intermediate term buy yet as it may get to the 62% in time. It may though become a bounce play for a day or a few. (see next chart)

On the shorter term chart you see that Friday volume picked up a bit with an attempt to rally. If it can get above the high of the last 4 days then it may rally up to the  gap bottom.

(as a similar play that worked we played IMAX this week buying at $5.50 for an oversold bounce and it is up 10%) These are riskier plays.

SGTL has made a nice move form its trend line break which is good for a semi  conductor stock. This is quite a nice chart now and may be one to hold a while.

CTDC is  at the moment is  at risk of delisting due to lateness of filing its annual report. This is a wild stock that went from $1 to over $5 in the July movewith no news. It is probably "worth" closer to $1 then $5 but will watch to see if it can bounce again at the lower line. Or if they file and get an "all clear" from Nasdaq maybe a rally. Or a short on a break below support.

EMC so far has worked out well and it did clear the $10. First timeclosing above the center Bollinger band for months so odds are high that it will go to the top band at $10.50.

AMCC another tech stock that is in consolidation under $2.60. If we gat a tech rally this one may go.

RFMD is another that also could move when the rally finally comes.

IN has a very pretty pennant. Could play with a break either way but the best would be break to the upside.

MEN was a fast bounce move this week one the day of the airline bomb scare. Turns out there were still some who wanted out so Friday continued the sell off. The set up is for another bounce at this level. If it break lower then we will wait though the $5.10 area has twice before shown support at well.

NXG I know I said the mining stock weak now but if this breaks out then it is at least a day trade.

EGHT is not a usual set up and actually not a set up at all actually but the recent action and Friday's candle may be a sign of a bottom. A stop would be under the lows. Or can wait for increased volume and a move above the frits trend line.

AOB is at the trend line - like a bull flag formation so a buy on a break out.

ARTX is a defense/security play and not a bad chart. A break of $3.50 shodl take it at lest to the test of $4.

We mentioned GM recently and see it is nearing the trend line so watch for a bounce play there.

GHDX could bounce from here to the lower support as drawn. This stock is in an uptrend with high volume moves up and low volume retraces.

IEAM was on or watch list in the past and it recently broke above a trend line. If it hold above $7 then looks pretty good.

One that moved Friday that will look for an entry is GROW. A pullback to $21 may be a good place.

That is all for now. Will have more on the website during the week.

Check the  message board for other good stock candidates.

Earnings season is about done but check the calendar so you will not be caught holding something unaware. Check on our website Research page under Earnings Calendar