Pre-Market Analysis for Wednesday, July 28
Today in the Stock Market
Despite recent gains, the Dow Jones Industrial Average was unable to break through the wall at 10,600. Volume was relatively low during Tuesday’s session so we think that this price area will continue to hold in the near-term. At the same time, we are not expecting to see any major sell-off. Confidence is starting to build and that will provide some buying pressure. We are expecting support to hold at 10,400 in the near-term.
The rally in the tech sector came to a halt on Tuesday. QQQQ, the ETF of the NASDAQ Composite gapped higher at the bell and opened at $46.69. Investors used that strength as an opportunity to take some of their profits. Volume was relatively low so we don’t think this sell-off represents a reversal of the uptrend. We could see more minor selling pressure at the open but we think $46.00 should hold as near-term support.
GLD’s price action on Tuesday is one big reason why we’re sitting on the sidelines and not buying the ETF. GLD gapped significantly lower on Tuesday and it did not take much to drive the price below near-term support at $114.50. The ETF hit a low of $113.21 before investors decided to jump back into the market. For now we are going to wait for buyers to return to the marketplace. It doesn’t pay to try to catch a falling knife.
USO broke through support at $35.00 but we are not paying much attention to the short-term volatility. We are still bullish in the long-term for oil prices and it is only a matter of time before prices move higher. There is still strong support at $34.00 and we are expecting that price to continue to attract investors.
We were expecting to see a strong open in PCBC but even we did a double take when we saw the opening price of $1.02. The fact that the price hit a high of $1.38 is an indication of just how undervalued this stock is. Moving forward, we think there is a high probability of the price falling in the near-term. We recommended investors buy this stock at $0.75 on Monday, which represents a gain of $84%. In these market conditions, that profit will be too attractive to pass up.
We warned that selling pressure in SILA was starting to build and that it would struggle to test resistance at $1.20. On Tuesday the stock opened lower and continued to tank throughout the morning. We think this stock could hit a low of $0.71 before it starts to attract new buyers.
We also received a sell signal in AEHI yesterday morning. We held on to this stock on Monday but we were looking for selling opportunities. The fact that this stock could not test resistance at $0.70 Monday was a sign of weakness. On Tuesday, the stock opened lower at $0.65 and triggered our sell signal.
ADLS is a good learning experience for investors – teaching the importance of patience. The stock gapped higher Tuesday morning and represented a strong selling point for investors. In the morning, the price dropped from a high at $0.0495 to a low of $0.043. The selling did not trigger a sell signal, so we held on. Volume was incredibly low and we were expecting that as volume picked up, so would the price. By the end of the day, ADLS traded 1.6 million shares and closed at $0.048.
ABK was another exciting trade yesterday. After the price broke $0.80 on Monday, we knew there was a very good chance this stock would test $1.00 in the near-term. The rise in volume was a good indication that prices would continue to climb. So Tuesday’s high of $1.03 represented a great opportunity to take some profits. That is a gain of 37%. ABK was able to hold on to some of its gains and closed at $1.01, which is above resistance. We could see another push higher this morning but we don’t know if this jump is sustainable over the medium-term.
ESLR provided our members with another opportunity to make modest profits. In early July, we recommended investors buy shares when the price was hovering at $0.65. It rallied to a high of $0.75, which we said was a good short-term profit area. Last week we recommended investors jump on the trade again at $0.65. On Tuesday the stock hit a high of $0.74. That represented a gain of 13.8%. In total this month, ESLR provided our members with gains of over 28%.
PARD is holding on to its recent gains despite modest selling pressure on Tuesday. It’s holding support at $0.61, which was previously a resistance point. If this price holds and volume starts to pick up, we’re expecting it to test its next resistance point at $0.70.
We managed to make some quick profits in CBIS on Tuesday. We pointed out that the stock triggered a buy signal when it broke $0.07 on Monday. On Tuesday, the price hit some strong resistance at its high of $0.095 and the selling pressure triggered a sell signal. CBIS’s negative close at $0.076 should create some selling pressure this morning. Look for some support at $0.065 in the near-term.
Our scanner alerted us to SKPI and if volume is any indication, we think it should continue to move higher in the near-term. We jumped on this stock when it was trading at $0.40, which represented a medium-term resistance point. Momentum continued to build and the price broke through long-term resistance at $0.50 then closed at its high of $0.505. We are expecting to see a strong open this morning.
We recently took TDGI off our watch-list because there was a higher risk for the price to drop. However the recent price action is starting to grab our attention. The stock made some decent gains on Tuesday, rallying from its open at $0.036 to a high of $0.044. TDGI ended the day at $0.042, which is just below our entry point. We would like to see some follow through buying today, which could trigger our buy signal.
We also like TITL and there is potential for the price to test resistance at $0.05 in the near-term. On Monday, the stock opened just below $0.01 and closed at $0.0205. We saw some follow through buying Tuesday morning and received a buy signal when it moved back above $0.021. Volume is the key to this trade – as long as volume remains strong, the price should continue to move higher.
Have a Great Trading Day!
Your Hyper Growth Stock Team
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