Oversold | stockbee

3/04/2009

Oversold

  • The market is way oversold but it continues to get weaker. It was a 500 plus day to the downside on Market Monitor, that indicates very high selling pressure. This is 5th day of 500 plus selling after a brief one day upside last week. 
  • The futures are indicating bullish open like yesterday. The overnight markets were up on speculation about new Chinese stimulus package. 
  • Given the fact that we are down for so many days a reflex bounce is logical move but we have seen that this market is so weak that even a tradable bounce has been difficult proposition. . Sentiment, bad news, despair, and price levels all point to one for sometime. 
  • The sectors leading to the upside currently are:
    • MG113,Agricultural Chemicals
    • MG132,Copper
    • MG352,Tobacco Products - Other
    • MG528,Medical Practitioners
    • MG725,Broadcasting-Radio
    • MG738,Auto Parts Stores
    • MG741,Sporting Goods Stores
    • MG747,Apparel Stores
    • MG834,Semiconductor-Integrated Cir
    • MG850,-Internet-
    • MG852,Internet Information Providers
  • The sectors leading to the downside currently are:
    • MG313,Housewares & Accessories
    • MG328,Office Supplies
    • MG425,Credit Services
    • MG431,Life Insurance
    • MG444,Reit-Hotel/Motel
    • MG447,Reit-Retail
    • MG523,Health Care Plans
    • MG629,Textile Manufacturing
    • MG637,General Contractors
    • MG712,Resorts & Casinos
    • MG771,Major Airlines
  • Very few stocks are trading closer to the top of their one year range. A scan I ran on stocks within top of their 52 week high range and with sufficient average daily volume has only 21 stocks in it. They are:
    • AIPC
    • AZO
    • CECO
    • COCO
    • CVTX
    • CYCL
    • DLTR
    • GMCR
    • IDEV
    • INSM
    • IWOV
    • MIN
    • MYGN
    • NFLX
    • OCN
    • ORLY
    • PCG
    • PSD
    • TEVA
    • TNDM
    • VR
  • Some interesting possibilities on long side out of these are : NFLX, TNDM , AIPC, MYGN. 
     
  • With 10 to 11 days of active selling, there are very few low risk shorts and a possibility of reflex rally makes it difficult to short here. But some of the shorts showing up on my short scans are :
    1. ARCC
    2. BKUNA
    3. CMS
    4. CNL
    5. DPZ
    6. EEE
    7. EXP
    8. FL
    9. HUN
    10. JCG
    11. MENT
    12. MLM
    13. NDN
    14. OMTR

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