Monday March 15 Premarket Analysis
Today in the Stock Market
Dear Fellow Traders,
It was a good week for the bulls as the Dow Jones Industrial Average ended the week up 58 points. 12 of those points were made on Friday. According to some of the commentary, positive U.S. retail sales helped to boost the positive sentiment.
The index started Friday at 10,611 but brief selling pressure caused it to drop to a low of 10,594. However, the bulls were quick to take control and the index rallied to a high of 10,644. The market settled modestly lower to close at 10,624. The fact that the index wasn’t able to make major gains last week could mean we are in for a period of sideways trading. Traders will be hesitant to take any major positions ahead of the FOMC interest rate decision, which will be announced on March 16.
The tech sector, after making new highs for the year, could be running out of steam. QQQQ, the ETF of the NASDAQ Composite rallied by 2% last week. On Friday the ETF gapped higher and opened at $47.50 and managed to hit a high of $47.53 before the bears took over. The selling pressure caused QQQQ to drop to a low of $47.10. However the ETF was able to rally higher to close at $47.36, which was close to Thursday’s closing point.
Gold prices continue to be pushed around and we are seeing another drop in prices. Last week GLD, the biggest gold ETF fell by 2.5%. On Friday the ETF opened at $108.56 and managed to rally to a high of $108.77, which represents its 50-day moving average. However, this must have created a strong sell signal pushing the ETF to a low of $107.45. GLD managed to close slightly higher at $107.95. There are a lot of behind-the-scene factors affecting gold prices. Very few people have faith in the U.S. dollar, but they are not ready to give up on it quite so soon, especially as the Euro remains so weak. The big players are able to talk down gold prices and then buy them back at a lower price.
We saw an interesting move in CIST on Friday. The stock is trying to make new highs but continues to run into selling pressure. On Friday the stock gapped higher and opened at $0.37. It managed to rally to a high of $0.40 before it was hit with some selling pressure. The stock slid to a low of $0.30, which appears to be a support point. CIST managed to rally off that price and closed at $0.32.
SNWT remains under pressure. On Friday the stock traded between its 20-day and 50-day moving averages. It opened at $0.131 and hit a high of $0.1325, which is its 20-day moving average, before the price started to slide. The stock hit a low of $0.112, which is its 50-day moving average, and closed slightly higher at $0.116. I am not reading too much into Friday’s sell off because volume was well below the daily average. The volume still supports higher prices.
I have been doing a lot of reading and KNDR remains on many watch lists so I think it is still prudent to talk about it briefly. The stock could be finding a new trading range in the near term. KNDR opened on Friday at $0.047 and hit a high of $0.049 before falling back and closing at its opening price. I would expect that the stock will find strong support at $0.045 and trade in a new range, with resistance at $0.055.
We saw an interesting move in KATX, which is on our watch list. The stock gapped lower and opened at $0.0495 then hit a low of $0.049, which created a buy signal. Investors were able to drive the stock to a high of $0.054 and it closed slightly lower at $0.0521.
Over the weekend we released a new pick, BONZ. Although we haven’t been very successful in junior mining stocks, I do like this area. I think it is only a matter of time before gold prices move higher and when they do, small cap mining companies will see the biggest benefits. On Friday BONZ opened at $0.025 and hit a low of $0.020 before a strong wave of buying drove the price to a high of $0.032, which is where it closed.
Finally there is another stock I would like to add to our watch list, MMUH. The stock is testing long term support around $0.01. MMUH tested this level in December and January. We could see the stock push higher off this level but it appears to be in a consolidation period. MMUH has traded in a tight range for the previous three sessions. On Friday the stock opened at $0.01 rallied to a high of $0.012 and closed at $0.011.
Have a Great Trading Day!
Francis
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