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Strength Could Accompany the First of May

If we are up tomorrow for the fourth day in a row, I think the mood will be cautious, not giddy.

The Market

Well, finally we got the Dow at a new high, and therefore a Dow Theory confirmation. Those who say, "Who cares about the Dow Theory?" may be correct that few people care. But all the same, I believe that CNBC would have made more of a fuss over it had the broadcaster not thrown itself a self-indulgent 25th anniversary party.

The problem I have with this new high in the DJIA or any of these indices is that the number of stocks making new highs continues to fall short. Today's reading of 103 new highs on the NYSE is less than yesterday's score of 122! How can we call this an uptrend when so many stocks are not joining the party?

I probably should not even discuss the fact that there were 140 new highs a week ago and 180 in early April. Nor should I mention that there were 500 several months ago. But this is what happens in a chop fest.

So what if the DJIA actually breaks out and gets through this 16,600 area? Well, we can measure one target at 17,200 and another near 17,800. But that would mean a stock like 3M (MMM) - Get Free Report would have to soar over $140. That IBM (IBM) - Get Free Report would not stop in this $200-$205 area but instead push its way to $220 and then some. That Boeing (BA) - Get Free Report -- and Goldman Sachs (GS) - Get Free Report -- would have to get going again.

Of all of these names, I would vote for Goldman to start acting better. (The GS chart is shown below.) One reason is that when the financial stocks were at their highs everyone loved them, but now all I hear is "What is the catalyst to get them going?" Well heck, I would respond, what was the catalyst at the highs? And why didn't people wonder what was the catalyst at the highs?

Tomorrow is the first day of the new month, so it is not out of the question to expect strength. But do keep in mind that if we are up tomorrow, that will mark four days in a row, and one day before the employment number. My guess is that if we are up, the mood will be one of caution, not giddiness.

Read Helene's latest column here.

New Ideas

As noted above, the chart of Boeing (B) - Get Free Report is one I am watching. If the DJIA is to break out and go further then I think, BA will have to fill that gap and be a part of it. That means a breakout around $131 and a move to $135. IF BA fails, I would expect the DJIA to fail.

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The other DJIA stock that needs to be watched is Goldman Sachs (GS) - Get Free Report. The chart should stop here. However, as noted, there is a lot of negativity toward the financials, which leads me to believe that not many investors are long them. This $160-$162 area on GS is solid resistance, so if the stock can get through it, that would be impressive.

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Concerning stocks outside the DJIA, I was asked to follow up on Con-Way (CNW) , a trucking stock I highlighted here in early April. CNW is up a bit from then, but the base is still present. That spike high at $44 is still resistance. But overall, there is a longer-term target around $47, should the stock ever break out.

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Today's Indicator

The volume indicator remains in the low 50s, so it is leaning to the overbought side.

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Q&A

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.

If I do a basic measurement on the chart of the iShares 20+ Year Treasury Bond Fund (TLT) - Get Free Report, I can get a measured target near $114. I find it hard to believe that stocks can make much progress on the upside if TLT is going to $114. But crazier things have happened in this market!

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That is a breakout on Sanofi (SNY) - Get Free Report. But look at all the resistance it will run into in this $54-$55 area. If I were to like this stock, I would want to see it retest that $53 area in the next few weeks and then launch another move higher. If it does not do that, it might just exhaust itself in the $55 area. Longer term it should measure to the $60 area.

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Sandridge Energy (SD) - Get Free Report keeps trying to get going and break out. When stocks are priced this low, it is difficult to get a decent target. For SD, the target would be around $7.50-$8. But what we should focus on is a move up and over that peak just over $7, which would be a breakout. I do not want to see it reverse back under $6.40.

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