Schaeffer's Trading Floor Blog

Into the Close

by 5/9/2005 3:53 PM
Stocks quoted in this article:

The bulls are making a push in the final minutes of the session...my alert for NYSE net ticks has once again become active and the SPX is testing its intraday high...

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Drilling Down on the IGN

by 5/9/2005 3:39 PM
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The strength noted below on the IGN caught my eye because most of my usual suspects from that group don't appear to be showing big gains...So I went to the iShares site and pulled the top ten weighted stocks in the IGN. They are listed below along with their percent change on the session...

  1. QUALCOMM Inc +1.2%
  2. Corning Inc +3.1%
  3. Motorola Inc +0.3%
  4. Lucent Technologies Inc +13.6%
  5. Nortel Networks Corp +8.4%
  6. Cisco Systems Inc +0.9%
  7. Broadcom Corp Class A -0.1%
  8. Juniper Networks Inc +0.7%
  9. Marvell Technology Group Ltd +1.0%
  10. Research In Motion Ltd +3.0%

As you can see, the action in Nortel and Lucent (which both trade in the two dollar range) is pulling the group higher...

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Stocks quoted in this article:

Here are today's top and bottom performing Exchange Traded Funds (ETFs)...

Top Performing Sector Exchange Traded Funds:

  • iShares GS Networking (IGN) = +2.44 percent
  • iShares C&S Realty Majors (ICF) = +1.52 percent
  • Oil Service HOLDRS (OIH) = +1.35 percent
  • iShares DJ US Real Estate (IYR) = +1.17 percent
  • streetTRACKS Wilshire REIT Fund (RWR) = +1.17 percent
  • iShares Nasdaq Biotechnology (IBB) = +1.07 percent
  • iShares DJ US Energy (IYE) = +0.98 percent
  • Energy Select Sector SPDR (XLE) = +0.95 percent

Bottom Performing Sector Exchange Traded Funds:

  • iShares GS Software Index (IGV) = -0.03 percent
  • iShares DJ US Basic Materials (IYM) = -0.06 percent
  • Telecom HOLDRS (TTH) = -0.08 percent
  • Software HOLDRS (SWH) = -0.15 percent
  • Pharmaceutical HOLDRS (PPH) = -0.16 percent
  • iShares GS Semiconductor (IGW) = -0.24 percent
  • Materials Select Sector SPDR (XLB) = -0.42 percent
  • iShares GS Technology Indx (IGM) = -0.46 percent

Even though the broad market indices are showing muted gains, we see an upward bias at the sector level. Oil and energy groups are so far holding their gains while networking is the strongest group. You can also see that a number of technology related groups are not participating on the upside.

Note: If you are not familiar with ETFs, make sure you read the Education and FAQ sections in our ETF center.

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In response to my post on Applied Materials, Dave says - "AMAT has a trend line from Apr 00 through Feb 05 which if broken would offer some hope. There is also a long term bullish trend line which is near 8 1/2 right now. The stock is having trouble keeping up with its falling 200ma. It would be nice for the bulls if the analysts would give up on this one. "

My response - I wanted to highlight this email because it subtly touches on an interesting aspect of trading - technicals can be a function of your timeframe. I focused on the short-to-intermediate-timeframe while Dave is discussing some intermediate-to-longer-term levels. And while different timeframes may paint different pictures, you can still use sentiment to offer insight to underlying demand and supply.

In regard to Dave's comments about analysts giving up, a monthly snapshot of ratings from Zacks shows this has not been taking place...

Since the beginning of the year, optimism has ticked up. However, as we saw in the chart from my first post, this has not been enough to buoy the shares, which hints to the selling pressure that overhangs the shares.

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Readers Respond - NOK

by 5/9/2005 2:08 PM
Stocks quoted in this article:

Bob says - "Nick, can you give me your thoughts on NOK. NOK hasn't been going anywhere for a while but seems to have recently broken above the resistance level around $17."

My response - Nokia is a stock that fell off my radar screen as it meandered sideways for the longest time. However, the recent action has been interesting...


Created with SuperCharts by Omega Research

This weekly chart highlights the action of the last year. As you can see, the shares bounced from their lows in August and staged a two month rally. But outside that burst, the action has been uninspiring....until now.

The shares recently overtook the peak from March and are now trying to overtake the peak from November. And surprisingly enough (for a large cap tech stock), the sentiment picture isn't overwhelming skewed toward optimism. Short interest is low but analysts are split down the middle and Friday's put/call ratio actually showed skepticism. This all combined to give NOK a moderately healthy equity scorecard reading of 7.5 on Friday.


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