Monday March 1 Premarket Analysis
Today in the Stock Market
Dear Fellow Traders
It was a relatively quiet end to what was a wild week. There was some strong volatility after the opening causing the Dow Jones Industrial Average to hit it’s high and low point of the session. The index hit a high of 10,353 and a low of 10,272 before settling to close at 10,325, which were just a few points from its opening level of 10,321. With employment numbers coming out on Friday, I am expecting to see a quiet trading week as traders prepare for the data. Looking at the chart I am expecting to see the Dow Jones trade in a relatively small range with support around 10,250 and resistance at 10,370. If the unemployment numbers are better than expected, I would not be surprised to see the index close the week above 10,400.
It was a better day for the NASDAQ composite as it managed to end the week on a strong note. QQQQ, the ETF for the tech sector, managed to close above $44.70, which was a resistance point for the last three sessions. The ETF started the day at $44.60 and hit a low of $44.40 before moving to its high of $44.86. QQQQ ended the week closing at $44.76. If the ETF can end this week at $45.00 it would be a very strong signal for the bulls. Even now this chart looks bullish (when you consider the low close to the Moving average at$43.84) and the way it reversed…
On Friday the U.S. dollar dropped sharply, which helped gold prices jump higher. GLD, the biggest gold ETF, managed to end the week in its previous trading channel. The ETF started Friday at $108.89 and managed to hit a low of $108.41, which was just below its 50-day moving average. That drop must have created a buy signal because investors managed to drive the price to a high of $109.60 and settled modestly lower to close at $109.43. I continue to monitor the U.S. dollar as it remains strongly inversely correlated to gold prices. Friday’s low of 80.12 in the U.S. dollar index represents its 20-day moving average and could create some short term buying momentum.
It is hard to know where to begin in the stocks we are watching. The previous week was very positive as we saw some very strong gains in our recent picks. The first stock I want to talk about was Friday morning’s new pick, LUXE. Our latest pick gapped higher at the open, starting the session at $0.042 and quickly hit a session high of $0.066. This represented a gain of 57%. The stock managed to hold most of its gains to close at $0.058. What I really like about this stock is that volume jumped higher as more than 2.7 million shares were traded on Friday. If the volume continues to grow we could see even higher sustained gains.
WDRP ended the week by holding on to most of its gains. It appears that investors are looking for buying opportunities. Any major drop in price creates a strong buy signal. On Friday the stock opened at $0.0339 and hit a low of $0.0245. However, investors jumped back in and drove the price up to close at $0.03. The chart has created a nice uptrend as the price hits higher lows. At the same time volume remains strong. These are positive signs that mean we could see consistent moves higher. But as with any trade we need to make sure it remains in uptrend, so make sure you manage this trade properly if you are still in.
There appears to be some investor indecision in our pick CBBV. However, volume has remained relatively low so I think once this consolidation period is over we could see another move higher. Friday’s price action appears to favor higher prices. The stock started the session at $0.19 and dropped to a low of $0.155. This price level was a strong support area last week and created a buying opportunity for investors and traders. The momentum drove the price to close at its opening price.
HSCO appears to be making some strong gains, but what I am more focused on is the volume. On Friday more than 600,000 shares were traded, which has been the highest volume for the last three months. Volume has been slowing increasing for the last three sessions and as a result we have seen higher prices. On Friday the stock gapped higher to open at $1.15 and quickly hit a high of $1.34. Friday’s high presented a gain of 31% from Thursday’s close. It is not surprising we saw some profit taking, which caused the stock to drop modestly to close at $1.20.
We continue to see consolidation in SNWT. On Friday the stock opened at $0.14 and hit a low of $0.12. However that price represented its 20-day moving average and created a buy signal. Investors were able to drive the stock higher to close at $0.127. I am not too concerned with the drop in price because the volume is relatively, which is a sign that there are not many sellers in the market.
Over the weekend we released a new pick SATM. This stock is showing all the classic signs of a major push higher. As we can see from the chart the stock has managed to make a higher high during the last four sessions. The trading volume has also increased substantially during that time. On Friday almost 1 million shares were traded. Looking at the price action, the stock opened Friday at $0.33, and quickly dropped to its session low of $0.315. However, investors appear to be quick to buy this stock on any dip and the price slowly recovered and hit an intra-day high of $0.36. SATM managed to hold on to most of its gains and close the week at $0.34. I am expecting the recent price movement to start to attract new investors.
We are seeing some interesting consolidation in BHWX. For the second session the stock has traded between its 20-day and 50-day moving average. Volume also remains very low so at this point the stock could go either higher or lower. A break above the 50-day moving average of $0.65 could create the bullish momentum to drive this stock to its recent high of $0.72. On Friday the stock opened at $0.64 and finished the day and the week at $0.62.
Also keep an eye on BYSD it seems ready to perk up…
Have a Great Trading Day!
Francis
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