Wednesday March 17 Premarket Analysis
Today in the Stock Market
Dear Fellow Traders
An expected move by the FOMC provided a small push higher for the Dow Jones Industrial Average. After their meeting, the Fed left interest untouched and reiterated that rates will remain “exceptionally low for an extended period.” Trading was relatively quiet as the index remained near its opening price for most of the day.
The Dow started Tuesday at 10,642 and in the morning dropped to its low of 10,621. However the market quickly recovered and hit a high of 10,682 and then once again fell back towards its opening price ahead of the interest rate decision. Following the announcement, investors were able to drive the index back to a new high of 10,693, then it closed only slightly lower at 10,685.
On Tuesday the tech sector managed to recover from Monday’s weak performance. QQQQ, the ETF of the NASDAQ Composite, gapped higher Tuesday morning and opened at $47.39, but selling pressure caused the stock to dip below to Monday’s closing price, and hit a low $47.23. The FOMC rate decision created some traction for QQQQ because following the announcement, the ETF hit a high of $47.61 and managed to close modestly lower at $47.54.
Gold prices appear to be on a rollercoaster ride which caused very high volatility in GLD, the biggest gold ETF. For the previous four sessions, the ETF has found support around $108. This must have created a strong buy signal because Tuesday morning investors quickly jumped into the precious metal and the ETF. GLD opened at $110.02, which has been a strong psychological level. Some selling pressure caused the ETF to fall to a low of $109.70 but that must have created another strong buy signal because investors were able to drive the price to a high of $110.46. GLD ended the day only 6 cents lower, closing at $110.40.
BONZ appears to be running into some selling pressure, but I don’t know how accurate Tuesday’s price action was. The stock opened at $0.036, which was also its high. Investors quickly drove the stock to a low of $0.023. However, bulls were able to regain some control and drive the price slightly higher to close at $0.03.
The reason I say I don’t know how accurate the price action was is because volume was low compared to the action we saw on Monday. On Tuesday, 375,000 shares were traded whereas on Monday more than 1.5 million shares were traded. Also, every time the stock had a positive day it was accompanied with strong volume. I will be watching the stock closely today.
A stock we were actively trading two weeks ago is back on our watch list today. I like the price action I am seeing in WDRP. We made some pretty good profits off this stock in early February but it has been losing ground since the beginning of the month. The price action on March 11 could have confirmed the reversal of the pullback and the stock has managed to hold on to most of those recent gains. On Tuesday the stock opened at $0.017 and hit a low of $0.015 before rallying to a high of $0.024. It managed to hold on to most of those gains and closed at $0.023. With more than 9 million shares traded on Tuesday, volume is good, but I am not going to go rushing into this trade right now. I am expecting to see some consolidation around the $0.02 level.
I continue to watch KATX as it consolidates between its 20-day and 50-day moving average. At the moment it does not appear to favor any particular direction. It does appear the stock is trying to test resistance at $0.06 but I don’t have a lot of confidence, so I will wait on the sidelines for now. I want to see a definitive move in any direction. On Tuesday the stock gapped higher and opened at $0.057, which is the stock’s 20-day moving average, and managed to rally to a high of $0.059. However the stock was not able to break its resistance level and fell to a low of $0.052. The stock closed only slightly higher at $0.054, which is its 50-day moving average.
CTDBQ remains on my watch list as the selling pressure appears to be easing. On Tuesday the stock opened at $0.036 and fell to a low of $0.03. However this could be a strong support point as the stock managed to bounce off that low and close slightly higher at $0.033. Another sign that the pressure could be easing is the fact that volume is dropping – more than 3 million shares were traded but that is well below the volume of the last seven sessions.
Finally, the last stock I wanted to mention is GETA. The stock lost significant ground last week and I took it off my watch list, though it continues to be active stock. On Tuesday the stock managed to snap a six-day losing streak. This could be the start of a bounce or the stock could just be taking small breaths before it resumes its downtrend. The stock opened at $0.07 and hit a low of $0.069 before it managed to find some traction and rallied to a high of $0.075. The stock closed slightly lower at $0.072.
Have a Great Trading Day!
Francis
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