Friday March 4 Premarket Analysis
Today in the Stock Market
Dear Fellow Traders
The Dow Jones Industrial Average was able to overcome weaker housing data to close near strong resistance levels. Thursday morning the National Association of Realtors reported that pending home sales dropped 7.9% between December and January. However the news did not have a major impact on investor sentiment. Thursday’s price action highlighted the tight range the index has been trapped in the last few days. The Dow started the session at 10,396 and fell to a low of 10,390. Investors were able to drive the stock to a high of 10,452 and settled slightly lower at 10,444. Friday’s open will be very interesting as U.S. nonfarm payrolls are scheduled to be released in the morning. The major employment report will cause some strong volatility and if the numbers disappoint we could see a test of the initial support at 10,350 and if the data is very bad a run towards 10,300. If the data is positive I would expect to see a run towards 10,500. However, there is not a lot of resistance between 10,450 and 10,550 and we couldn’t rule a move that high if the data is extremely positive.
It was a slightly more volatile day for the NASDAQ Composite as it traded in a wider range compared to the general market index. QQQQ, the ETF of the NASDAQ, continues to claw its way higher. The ETF has made impressive gains over the last five sessions and the bulls remained in controll on Thursday. QQQQ opened the day at $45.64 and fell to a low of $45.40. A late afternoon rally helped to push the ETF to a high of $45.81 and finally closed slightly lower at $45.75.
The U.S. dollar made gains against the Euro which caused a slide in gold prices. GLD, the biggest gold ETF dropped over a dollar on Thursday before finding some support. Although the ETF sold-off it continues to hold most of its gains from the previous four sessions. This means more investors see value and higher prices and are signs of higher prices in the future. GLD started the day at $111.25 and managed to hit a high of $111.37 before the bears took control and dragged it to a low of $110.22. The ETF closed modestly higher at $110.83.
First on our list today is CBBV. We saw a very strong open on Thursday following Wednesday’s major news announcement. The stock opened at $0.19 and quickly rallied to a high of $0.21. The move in the morning represented a gain of 31% which caused some profit taking. Strong selling pressure drove the stock down to Wednesday’s price of $0.16. Investors took control in the afternoon and managed to push the stock back to $0.19 and finally close at $0.185. Thursday afternoon CBBV announced another contract which could create total revenues of $100 million over the next 10 years. We expect this new to cause another jump in the stock and the strong fundamental news should help to sustain these gains.
Our pick BHWX continues to consolidate and trade in a very tight range. Although the stock is not able to make new gains it also is finding strong support at $0.63. The stock opened at $0.645and managed to hit a high of $0.65 before testing support at $0.63. The stock ended the day at $0.6401.
It was an interesting day for WDRP as it continues to hold on to most of its recent gains. So far support at $0.02 is holding and creating a buying opportunity for investors. The stock opened at $0.0221 and hit a high of $0.0239 before selling pressure pushed it to a low of $0.02. The stock managed to end the day at $0.022, which was very close to its opening price.
I am seeing a flag formation in SNWT and with volume dropping off we could be close to a breakout. The stock had a strong rally from Feb. 12 to 18. Although the stock retraced those gains volume has dropped significantly. The stock could try to test support at $0.10 but a break of $0.11 could signal a reversal of the consolidation period. On Thursday the stock opened at $0.11 and because of low volume closed at $0.106.
LUXE is managing to hold on to most of its gains after its strong move on Feb. 26. Volume remains fairly high so that should help to support its new price level. On Thursday the stock opened at 0.042 and managed to hit a high of $0.044 before the bears took control. The selling pressure drove the stock to a low of $0.035. LUXE managed to make some modest gains near the end of the day to close at $0.038.
Finally I wanted to end the day by adding a new stock to our watch list, MBTG. On Wednesday the stock gapped higher and rallied 0,008. Even before Wednesday’s move the stock has made consistent gains since February. The stock sold-off on Thursday but I think this was more due from profit taking than a reversal of the trend. Volume was incredibly low compared to Wednesday move. I want to make sure that volume remains strong and wait out the consolidation period.
Have a Great Trading Day
Francis
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