Stock Tiger Update For Tuesday January 16, 2007

Stock Tiger Update

For Tuesday January 16, 2007

Close Friday

Dow +41.10 at 12556.08, Nasdaq +17.97 at 2502.82, S&P +6.91 at 1430.73

For the week it was the Nasdaq that was the leader as it broke out of its 3 month trading range. The top 100 market caps in the Nasdaq had the largest % gains with 3.3%. We have seen new interest in tech several times in the last few years and each time it looks like maybe a rotation into the sector is taking place but it doesn't seem to really get going. Maybe that isn't not worded so well. Yes the Nasdaq is up over 100% from the October 2002 low but so many of the techs are still not showing any real major recovery. Maybe it will take more than Windows Vista. Like when all people decide to get video phones. (I do not understand why they have not become a must have yet)

Regardless of that, so far this year the Nasdaq has been the leader. The media says the continued gains are from folks believing the economic slowdown will have a soft landing. It may be only that in January so much money from bonuses goes into mutual funds or retirement accounts and then into stocks. There was also a lot of money coming out of oil and commodities and had to go somewhere. The week before the Martin Luther King holiday is also historically positive while the week after is typically weak

Here are the weekly gains for the major indexes. For fun the biggest weekly gainers for our picks is also there. Little INNO that we had as a buy at $0.70 broke out on Tuesday and got as high as $1.22 Friday for a maximum gain of 74% and closed up for the week 59%.

Of the "also-rans" the Nasdaq 100 put in the largest gain at 3.2%

Here are the active sectors and how they did for the week.

Friday was also a big day perhaps in part because the December retail sales came out with the biggest gain (+0.9%) since July so the consumer is still spending well. The idea is that as the housing sector is off then spending will slow down and this only shows it has not yet had a big effect.

We have a lot of charts as several are sector charts of interest right now. But first lets take a look at the major indexes.

First is the World Stock Index and it is almost back to its all time high. The drop below the trend line earlier looked as though it may at least get to the 50-day EMA but it has come back well. Now to see if it breaks out or makes only a double top.

The Dow made a new closing high a little above the December high but the 50-day EMA is getting flatter which suggests that it is running out of gas or at least much slower motion.

S&P 500 is very near a new high. In December I put in the Fibonacci lines and they lined up so well that they predicted a likely top. The pullback got near the 50-day EMA and at the trend line so a normal place for a move back up though many of us would prefer a larger correction as this brings stock prices back to a level where they can make larger gains as long as the economy stays good. The next couple of weeks there will be a lot more earnings announcement so we will soon know if it is a sell-the-news situation or if buyers want even more.

The New York Stock Exchange bounced at support and the 50-day EMA and may join the others at a test of the highs.

Here are two views of the Nasdaq 100 and the first here is of the tracking stock QQQQ. It had a very nice break out but is overbought so will pullback this next week or at a minimum consolidate.

On the longer term chart of the Nasdaq 100 you see that it is now at the top of the trading channel. A solid break out here on increasing volume would be very bullish and could suggest a rally of several weeks to a couple of months. Stochastics are lower now then at the former high but you could also take that to mean the it is not too overbought. As shown in Friday's video though in the short term it is overbought as the candle is above the top Bollinger band.

Here is the Nasdaq and the long awaited breaking of 2500. (still down 50% from the high of 7 years ago)

On the longer term chart it is also at the top of one trading channel and a break out here we would think will take it to the yellow channel top. Caution is always in order at major trend lines as failure is also a good possibility.

The Nasdaq to Dow ratio chart shows the Nasdaq again taking the lead but it is also at the bottom of the broken trend line so a place where a pullback would be expected. The stochastics are now over 80 also indicating a pullback to come.

While the Nasdaq had been making new highs though the NASI is going lower so this is also a red flag. It may be ready to turn up but it should have done that already.

And the SOX semi conductors. Now sitting just under resistance and then the underside of the broken trend line. Stochastics bounced at the 50 line so we will wait to see if it can regain the broken trend line at a bit above 500.

Gold had a strong day on Friday but in looking at the gold stocks there are not many that now have a good risk/reward buy point. We are watching ones like BGO as it is in a nice looking triangle but has not broken out. At some point this year we still think we will see the moving average line (blue) tested and a turn up from there we will be more bullish in the sector.

To put the Friday move in perspective - the longer term weekly chart of gold. The triangle has room for it to drop to test the bottom again and the moving average then move to make a break out later.

Oil weekly closed at the 50% retrace and the 200-week EMA so a good bounce point. This may be the low but I read that much may depend on Saudi Arabia. I guess there is about 2.5 million barrels a day of oil in extra capacity in production and they is expect it to go to 4 million barrels a day in 2008 as more production is coming on line. To help prop up the price OPEC may cut production more but hard to control if everyone actually does cut. The countries made money at $30/barrel and it is the same product as was then so sure they may not want to cut but only agree to it in words. I read that Saudi Arabia generally cuts more to help to make up for those who don't but if they did not cut so much they could let the price fall another $10. On the chart it is for sure at a valid bounce point but the stochastics are not yet under 20 so for long term is seems better to wait.

Now a look at sector charts and first the biotech tracking stock BBH on the weekly chart. You can buy this like a stock and it had a nice move the last couple of weeks and we have some biotechs on our watch list allready.

Now here are 15 sector charts. We are using the Dow Jones charts as they are a good way to review all the major sectors. We are showing the ones that have not yet broken out so if the market rally continues these sectors may offer good gains on break outs while not being as overbought as others. Many of you have the day off Monday so an extra day to pick a sector of interest and explore. We include stochastics RSI and MACD on these charts so you can look for MACD crossovers and so forth. I am not making comments on these charts as you can see they are all in good shape for break outs. Many are thinking that the market is soon to make a major pullback ( and I hope we at least get a minor one) but looking at so many sectors on the verge of new break outs seems unlikely that they all would fail.

The link on the top of each chart opens that sector at Market Watch where they list all the stocks in each sector so you to look for candidates.

The first one has already broken out and we include it to show what may take place in many of the others.

Travel & Leisure

And here are the others.

Health Care Providers

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basic mat.png

Building Materials & Fixtures

building mat.png

Telecommunications Equipment

Containers & Packaging

food and bev.png

Steel this pulled back to support so maybe a buy again at a minor break out level shown but it may pullback again so wait and see.

The economic calendar from briefing com

So far this month 44 of our picks triggered the buy point and 43 of them closed above the buy point on the first day. One closed 6 cents lower. That is a pretty impressive track record.

Here are some new additions for our watch list.

RNVS is one we looked at in the chat room. It does not have a nearby exact buy but $3.50 may work out. This one for more aggressive traders.

BHIP is another aggressive stock that can move a lot in a day so at the moment a good one for day traders at least. For others it may work our with a buy near the trend line and a stop at maybe $1.96 area.

PCNTF is a high risk trade on a break of $10 at the moment as it has two gap opens in a row. Instead one to watch for a pullback.

CYPB looks pretty interesting above $8.50 and break of the trend line.

ATHR above $25.00

QDEL in in a trading channel and now at the top and under the 50-day EMA so a move above on increasing volume would be a buy.

There was an article posted in the chat room mentioning how bird flue may get interest again as it often returns at the same time as traditional flue. I looked at all the "bird flue" stocks and found none that have a current well defined buy point. When I saw AVII (one we have traded in the past) it looked interesting. It does not need to move on bird flue news as they do a lot but note how it moved 30% in August then pulled back and moved 70% the pulled bask and in October moved 60%.

This is not a pick but one to keep a small eye on as if it does start moving it has a history of good moves.

HLIT likely over bought now but has had good volume so next break ot at $8.65

SIX now above the 200-day and near the gap. Could take a few days for an attempt but a buy over $6.52

Airlines of course will benefit with lower fuel prices. LUV has a level at $16.33

AMTD into the gap would be at $17.77.

We showed the SOX chart and TSM tried a break out Friday and failed but had huge volume so may try again. Watch it as it may pullback.

I may make some additions before the open on Tuesday so check the site.

The fountains is turned off but it need not be as it is still above freezing in Moscow and of course no snow. This is very strange indeed.

bdnx

That's a full lid - will see you during the week. Enjoy the extra day of if you have one.

Earnings season has started so do not forget to check stocks you hold.

That reminds me - also to Vote often - once a day on the words "Vote for It!"

Check the current Earnings Calendar on all overnight holds.

Check the current message board also for other good stock candidates as there are several there right now.

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