The week ended on a flourish with a solid volume close - likely the last of the action until the New Year rolls in. Joe Reed is looking at Friday with more hope than substance. His housing index chart shows next support down at 90-100. His comparison with the retail index is excellent as it shows clear potential for a shorting opportunity in the sector. Friday's gains may not all be good news. Ted Burge has marked in a couple of resistance levels for the Nasdaq 100: With an additional resistance level from October lows for the Nasdaq (on a second look there is a similar resistance level in the Nasdaq 100 - except Ted hasn't marked it in): The semiconductor index was also tagged by resistance at 417.32 and the 20-day MA - future action in this index will be critical for the continued health of the Nasdaq and Nasdaq 100: Leadership could emerge from small caps which cleared dual resistance of the declining resistance line and 50-day MA. Robert New sees a further upside for Sm...

There is no question as to the trend E*Trade ( ETFC ) has 'enjoyed' for the past few months. And with the avalanche in full flow there would be little desire to want to jump into the snow and play, but the stock must be near an attractive price for a takeover bid from the likes of T.D. Ameritrade. If there was a takeover interest it probably would be the interest of the buyer to make an offer sooner rather than later, to at least stem the flow of brokerage (its key asset) cancellations/transfers which is no doubt underfoot. From a technical perspective the stock lost $3.69 support on Thursday to end with a $3.37 close. Supporting technicals remain bleak, but the real interest here is less on the short term and more on what the future might bring. If the stock was to receive a buyers bid I suspect it would be over the next 12 months (certainly the stock price couldn't last another 12 months shedding as much as it has). This makes the January 2009 $2.50 strike call at $1.9...

One of the few bright spots over the past few days has been Fuel Cell Energy (FCEL). The stock made a strong volume, gap breakout, on the back of earnings . The gap failed to fill on the backtest of support, in itself a bullish confirmation signal. Wednesday's follow through came on slightly disappointing volume, likely an artifact of holiday trading. I wouldn't be surprised to see it drift into the $11.50-12.00 range before pushing higher. You can get a 15-min delayed data chart for FCEL here ; if you like the chart please give it your Vote at the bottom of the chart - TY. On the options front, July 2008 $5 strike Calls were showing the same ask ($7.60) as April's 2008; that's a measly $0.26 time premium for a stock which has added $4 in a month. Good value.

A review of some of the Gold stocks I follow saw an interesting opportunity in Couer D Alene Mines Corp ( CDE ). There is a strong confluence of support marked by the 50-day MA, and the lows of the large white candlestick from early November, created by a Bear Stearns analyst comment that the stock was underpriced , helped later by JP Morgan's upgrade . Given the stock is trading near the price prior to these announcements should be of interest to buyers. Earlier tests of the 50-day MA since October have seen buyers step in - so now shouldn't be any different. The Base metal is making a similar test of its 50-day MA support. The "Golden Cross" between the 50-day and 200-day MAs is a long term bullish signal. Technicals could be better; a mild distribution trend in on-balance-volume isn't helped by the scrappy action in the MACD, or Directional Index. But at least the MACD is holding above its bullish zero line. The point-n-figure has an interesting chart showi...

The bounce off November lows has many questioning the validity of the recent market bottom. As I have mentioned before, I like to study the internals such as the bullish percents to get an idea of the quality of reversals as they occur. The big advantage of using internals is their relatively smooth oscillations from oversold to overbought conditions. They are not perfect, but it is relatively easy to filter out noise. Monday's declines with the loss of 200-day MAs for both the Nasdaq and Dow will have driven a knife through many bull's hearts. But how has the (now) six day decline changed the rally off November lows? First up is the Nasdaq Composite Bullish Percent Index. The clearest illustration of the bullish percent working in tandem with trendline support was the August-November rally. Harder to classify is the current November-December decline. Based on the initial (bearish) trendline drawn from the two peaks in late October and early November, December's break was...

MicroStrategy ( MSTR ) was drawn from a new short scan I am developing. Friday saw a combination break of support, with a nicked loss of 50-day and 200-day MAs. The latter may be enough to generate a swell of buying back to the 20-day MA - an alternative entry point. A loose stop is marked at $105.11, but a tighter one could be placed around $102.62 (just above the 20-day MA). Downside targets are the 2 breakout gaps and August support at $61.00. Technicals have aligned in support of weakness with a fresh 'sell' in on-balance-volume - marking a shift to distribution, combined with a bearish crossover in trend strength (-DI > +DI). Deep in the money puts for April 2008 can be bought with little time value; Optionetics shows the ask for a $150 strike Put at $55.20, with good value for $120 strike puts for the same expiration at $27.50, and the $125 strike at $31.70.

This was the start of a big test for bulls. A bottom looks to be in place, but how will it hold on the eventual test? Joe Reed is not seeing a bullish or bearish market: But has a bullish call on the AMEX: Following the earlier one for the S&P: His Summation Index points to a another (unmarked?) bottom: Ted Burge shows 'Ted-line' support for the Dow at 13,350, with resistance at 13,659. Ted's lines show convergence of support and the 20-day MA for the Nasdaq 100 at 2,070-2,074: Maurice Walker has his usual good summary: 12/13 Commentary: Today the Labor Dept. released the Producer Price Index (PPI) figures, and wholesale prices rose by 3.2 percent in November, which is the biggest increase in 34 years and the largest monthly gain in wholesale inflation since August 1973. From November 2006 to November 2007, prices for finished goods rose 7.2 percent. Core prices which exclude food and energy rose 0.4 percent in November, which is double the .2 percent expected. The p...

Moving averages are the simplest trend measuring tool to be found. The following two charts show clearly how market health has changed from a cyclical bull market into a more bearish, counter rally structure. Plotting the percentage of stocks which trade above their 50-day and 200-day MAs, for both the Nasdaq and S&P, gives a good indication to the overall health of the market. When the market is in healthy bull form the percentage of stocks trading above their 200-day MA should be greater than the percentage trading above their 50-day MA. Why? In bullish markets, the faster moving average trades above the slower moving average. In this situation, it is not uncommon for a stock to trade below the 50-day MA, as it might do during a bullish consolidation, without violating the slower, longer term average (200-day MA). In a bearish market environment, the slower moving average trades above the faster moving average. During counter bear rallies it is common for the faster moving averag...

Jack Haddad's feed should be on everyone's feed reader. His trade posts are twitter-like in structure, but convey all the information you need in real-time. His feed is part of Blain's excellent StockTradingToGo blog. For reference I have marked in Jack's Goldman Sachs Group ( GS ) trade based on when he published it on his blog - unfortunately, I wasn't able to get a clear 1-min chart for the morning which would have detailed the trade better, but grab his feed and you'll see today!

Capstone Turbine ( CPST ) was one of the few bright lights in a volatile session. The stock completed a healthy 4-month base, with decent buying spikes into the right-hand-side of its base. On Wednesday, it cleared two resistance levels: $1.37 and $1.43 (well - finished bang on the latter) - to make it a good buy with a limit order at Wednesday's closing price. Stop placement can be set below yesterday's lows. Some may prefer to fish for fills using GTC buy order orders inside $1.25-1.35 price congestion, taking advantage of any intraday weakness on a backtest of support. Technicals are in good shape with a resistance break in the MACD trigger line and steady accumulation as measured by rising on-balance-volume. Slow stochastics [39,1] are above the bullish mid-line (= rising bull momentum) on increased trend strength as measured by the directional index above 20 and climbing. As for a price target; the projected target from the base is $1.95. The point-n-figure chart still ha...

The Fed made it's hardly unexpected 25 basis point rate cut, and the market reacted like it was a big surprise. Too much hope and not enough reason priced into the market, contributed to the large decline. The 50-day MAs were there in the end to be the bull spoiler, and the warning sign for trouble. The reason for the reversal will eventually fade to memory, and we will be left with a chart which said the 50-day MA was resistance. But that would only tell half the story. Yesterday was a great example of how key market events and technical parameters can work together. The presence of 50-day MA (or 200-day MA, even the 20-day MA) was a flag to suggest the market was susceptible to a significant news event - even one as expected as the Fed announcement. The chance for a ho-hum response to the Fed announcement was never going to be high. The Dow could have just as easily added 200 points if the perception for what the rate change meant for the stock market was positive. Had the mar...

With an expected rate cut on our hands lovers of income yielding bonds are getting squeezed once more. However, income lovers don't have to fret as there is plenty of value out there if you know where to look. Utilities and REITs are one such option, but the best plays are to be found in the unloved financial sector. Not all have suffered at the hands of sub-prime losses, but nearly all have been tarred by the same brush. The following stocks were screened for a yield greater than 5%, trading at the lower Bollinger bands. The best way to take advantage of the firesale is to split your allocated capital into 12 portions and dollar cost average over the year. Reinvest the dividend and let these stocks work for you. Symbol - Name - Close - Industry - Yield CORS - Corus Bankshares Inc - $12.04 - Bank - 8.31% NCC - National City Corp. - $20.20 - Bank (Midwest) - 8.12% FHN - First Horizon National - $23.49 - Bank (Midwest) - 7.66% CRBC - Citizens Republic Bancorp - $15.38 - Bank - 7...

It has been over a month since I was last able to do a review of the weeks action as per the Stockcharters. There has been no shortage of water under the bridge since. Eric Muathe has a big outlook for the markets. He is looking for 25,000 in the Dow by 2011 based on the following: With a Nasdaq at 6,000: Dr. Joe opens with his usual point summary. He looks to be calling a bottom in the market: His AMEX chart is interesting for the lack of trading volume since mid-2006 to the present day: No surprises for his S&P and Nasdaq 100 chart - both of which show a November bottom. Currently, the Nasdaq 100 has reached overbought full stochastics, while slow stochastics for the S&P still have room upside. His Nasdaq Summation Index shows the current (December) bottom nicely with respect to the Nasdaq and Qs: Ted Burge shows current resistance for the Dow very cleanly: But for the Nasdaq there doesn't appear to be much in the way of resistance up to 2,818 (other than the 50-day MA...