We are back in the range | stockbee

5/28/2009

We are back in the range


Market Monitor  




TypeIndicatorValue
Daily# of Stocks Up >4% on high volume137
Daily# of stocks down >4% on high volume  319
Primary# of stocks up >25% in a quarter3146
Primary# of stocks down >25% in a quarter 357
Secondary#of stocks up >50% in a month56
Secondary#of stocks down >50% in a month2
Secondary#of stocks up >25% in a month332
Secondary#of stocks down >25% in a month35
Primary fast  MM 34/13 + 2461
Primary Fast  MM 34/13 - 1054


  • The missing piece in the market is follow through, so we go back to range.
  • It is  frustrating when such intra day reversal happen. Buyers step aside and so a good stock can also take a hit.
  • What probably happened was that there was a big asset allocation move by someone  big on Tuesday. It was followed by someone big deciding to take profit.
  • To look at where selling was concentrated I looked at top 50 stocks by dollar volume in 4% breakdown scan. ( 100 * (C - C1) / C1) <= ( - 4) AND V >= 1000 AND V > V1
  • What does it tell you, that selling was mostly in financials. Which to me is no big deal. Frankly most of them went up so much during first phase. They are not leadership stocks. They had junk of bottom rally and such big moves in them were anyway suspect. They do not have earnings fuel to take them higher. 
  • I don't see any major growth stocks in the top 50 list. Some of the stocks witnessing selling like APOL, MON, GME, DLB, etc were not big growth stocks. many of them were laggards or had specific catalyst for their down move. 
  • Lets look at same list sorted by "Year" column which basically ranks stocks by % change in a year from 260 day low. 100 * ((C + .01) - ( MINC260 + .01)) / (MINC260 + .01) . Again if you look at the top 50 stocks you do not see major break down barring in few stocks like ZLC, IOC, AAI, ZZ. Now again these are not stocks which should worry you. Most of them are junk stocks. 
  • I also sorted the same list by MDT ranking and looked at top 50 stocks ranked by MDT showing up in the breakdown scan. Again I see no major breakdown barring IOC. IOC has a specific news of dilution which is responsible for that move. 
  • Then I looked at "EP Short" scan. It is a reverse of EP Bullish scan.  (( 100 * (C - C1) / C1) <= ( - 8) AND V > 3000 AND (100 * V / AVGV100) >= 300) AND C > 1
  • 8 stocks show up in the above scan  OPWV, SEED, VRS, WOLF, DLB, NPD, CSA, GM. None of these stocks are rally leaders. 
  • So based on all this analysis I do not as of yet see any cause for big concern. When market starts breaking down after a big move, you see lot of high volume breaks down. Those kind of things I do not see in this tape currently. I do this kind of analysis daily and I see very measured and orderly pullbacks in this market. Looks like stocks are taking a pause after a big up move. The formations on charts are all continuation move formations , not topping formations. Market is forming a range here. Most likely move from such range is up move continued

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