Skip to main content

Half Way There. Wherever There Is

We have some positive and some negative indicators, and here’s what to watch now as the market let’s us choose our own adventure.

The Market

Let’s not be surprised at the up/down aspect of the market this week. I would not be surprised if it continues.

As noted last week, the 30-day moving average of the advance/decline line is oversold. The Volume Indicator got to the top of oversold. The Hi-Lo Indicator still sits at 50%, which is not oversold. We also had anecdotal evidence that things got too bearish and we saw firm indicators that showed complacency had backed off, but no panic.

To me, that puts us in a sort of half-way spot. That means there are some positive indicators and some negative indicators. So let’s talk about what to watch.

New lows. They obviously stopped increasing this week. The oil stocks are on the verge of making new lows — well, many of them are. There is some support at this area for the Energy Select Sector SPDR Fund (XLE) - Get Free Report. If it breaks, I think the number of stocks making new lows starts cranking upward again.

Image placeholder title

Then there are the retailers. Macy’s (M) - Get Free Report broke down, but it is coming into support in that $5-$5.50 area. That’s the best you can say about it. The stock hasn’t had a bounce in a month, so it’s getting oversold, but these are tax-loss selling candidates.

Image placeholder title

Nordstrom (JWN) - Get Free Report has such minor support here that the best I can say is there is a measured target around $10.

Image placeholder title

The flip side is that the PHLX Semiconductor Sector (SOX:Nasdaq) relative to Nasdaq has been superb in September, which is typically a bullish sign. The SOX itself has been green for four straight days, which might not sound like a lot, but it hasn’t gone to five in over a year, so it probably is due for a red day shortly.

Image placeholder title

It’s as if the market has decided you can choose your own adventure.

New Ideas

Let’s look at two retailers. Abercrombie and Fitch (ANF) - Get Free Report broke from a small top. The top only measures to $13 and there is an uptrend line that comes in around $12.50, so I’d expect a bounce from there, should it get there.

Image placeholder title

Then there is Walmart (WMT) - Get Free Report, which I was quite fond of a while back and am now warming up to again. I would love to see it back in that $132-$133 area, or at least closer to $135 in the next few weeks. That’s where I think it becomes interesting on the long side again.

Image placeholder title

Today’s Indicator

The McClellan Summation Index is still heading down. But a net differential of positive 1,200 advancers minus decliners would halt that decline. Two days ago that was at positive 2,000. A week ago it was at positive 3,100, so there is improvement there.

Image placeholder title

Q&A/Reader’s Feedback

Helene welcomes your questions about Top Stocks and her charting strategy and techniques. Please send an email directly to Helene with your questions. However, please remember that TheStreet.com Top Stocks is not intended to provide personalized investment advice. Email Helene here.

Gosh, was it really six months ago that I first recommended United Parcel Service (UPS) - Get Free Report? I was asked if I liked it up here, and the answer is that it is so hard for me to get on board here, because it has achieved its upside target of around $160, but I will note that there is a secondary target at $175 so it probably makes a try for there.

Image placeholder title

The question is if I have a short-term upside target for Pfizer (PFE) - Get Free Report and I don’t, because I am looking at it as a longer-term play. As long as it holds over that support around $35, I think it has a good shot at first resistance $38-$39 and then after a correction/consolidation, a breakout.

Image placeholder title

Amgen (AMGN:Nasdaq) continues to consolidate the big run it had last spring/summer. It might take some more time, but as long as it stays over that $230 area, I expect it to head toward $280 on an intermediate-term basis.

Image placeholder title
Dow is the Most Vulnerable to Profit Taking

Dow is the Most Vulnerable to Profit Taking

Despite the newfound focus on the Dow Jones Industrial Average last week, it turns out we may be seeing the last gasp of outperformance here.

How Hungry Is This Market?

How Hungry Is This Market?

Here's what I'd like to see happen with this rally -- I'd like it to show some FAANGs. Here's why -- and a look at Microsoft's chart, news highs and more.

Sloppy With a Chance of Rallying

Sloppy With a Chance of Rallying

Here's why I see another rally before the weekend, even amid the messiness, and a bump for Amazon.

Sloppy With a Chance of Rallying

We Can Rally Just a Bit More

Energy stocks have a lot of complacency in them.