Stockbee: Oversold

3/04/2009

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 :