– James F. Taulman, former Editor-in-Chief of the first independently licensed website to offer stock reports and services based on the CAN SLIM® investment system.
9:00 AM – MORNING MARKET UPDATE & WATCH LIST
NOTE: Today’s watch list can be found here.
After a run to new highs for the major averages, each pulled back to support this past week as a rout in the technology and internet sector weighed on the market for most of the Labor Day-abbreviated week.
QUOTE OF THE DAY:
“There are three stages of an actor’s career. Young, old, and ‘You look good.'”
– Burt Reynolds
By Friday, the technology sector fell by -2.9%. Among the major decliners, Microsoft Corp. MSFT, logged a weekly drop of -3.7%, while Google-parent Alphabet Inc. represented by GOOGL and GOOG skidded -4.4%. Facebook Inc. FB was among the biggest losers, tumbling -7.2%.
The negative action had it biggest impact on the Nasdaq as it lost -2.6% overall, and registered its worst week in more than five months. However, the tech-laden index continued trading thus far in its uptrend and above support of its 50-day moving average (7826). (see chart)
Chart courtesy of stockcharts.com.
The S&P 500 closed down -1% on the week, the biggest weekly decline in two months, but it still remains roughly within -1% from the record set on Aug. 31st. The benchmark maintained its breakout point of 2,873 which I noted last week as new support.
The Russell 2000 lost -1.5% and remained above coinciding support offered by the previous summer highs of 1,700, and its 50-day moving average, currently at 1,693.
The Dow Jones, which was the only index of the four not to set a new record high recently, and is less affected by tech names, lost the least as it edged down just -0.2% to first support (25,888) early Friday, before closing the session higher.
We had another buyable breakout on Friday as shares of QTWO traded above their TRIGGER PRICE on nearly twice the normal volume.
Chart courtesy of stockcharts.com – Click chart to enlarge.
This morning, things are looking up as U.S. stock futures are significantly higher with the Dow’s up 88 points.
I ran my routine stock screens over the weekend and added 1 new stock to our watch list.
We now have a lucky 13 stocks which we will be watching for the next buyable breakout – see here.
The newest additions to our watch list is MNRO which is building a base near new highs. This Auto Parts leader is highly ranked.
Chart courtesy of stockcharts.com – Click chart to enlarge.
Standard rules apply – any gains above the stock’s TRIGGER PRICE while the day’s volume is at least on pace to make the TRIGGER VOLUME would have any of these set ups confirming a BUY signal up to their MAX BUY PRICE by default.
Keep in mind that when a stock breaks out – becomes potentially buyable – there are other factors to consider.
Volume on the breakout. A stock that is breaking out through resistance, with an increase in volume of +50% above the stock’s average volume (50 DAV), is showing more conviction and more demand. This is not saying – all lower volume breakouts will fail. Actually, we’ve seen many continue higher. If you have found that you did buy a stock that showed lower daily volume or volume under 50%, going forward – simply treat it a regular trade.
Earnings BreakOuts. Many stocks from our watch list will break out during earnings season. Earnings breakouts can be more rewarding, however, these trades carry much more risk then traditional (non-news) breakouts. One needs to also consider – the strength/weakness of the fundamental news that was just released along with the forward-looking guidance the company gave, investors response to the conference call, etc. For anyone who is not familiar with – buying earnings breakouts – I suggest that they sit through a few seasons to study, paper trade, and show some profits, before applying actual capital.
Current Portfolio Members can access all watch lists with updated trading criteria including – TRIGGER PRICE, TRIGGER VOLUME, and MAX BUY PRICE for every stock here.
Missed any of these morning reports? You can find all previous reports here.
As always, if anyone has any questions – please feel free to email me at email@example.com as I would be glad to assist you. _________________________________________________
About the Founder: James F. Taulman – James served as Editor-in-Chief of the first independently licensed website that offered stock reports and services based on the CAN SLIM® investment system. He has developed a knack for being able to quickly and accurately analyze high-ranked stocks based on this winning investment strategy. Over the years, Mr. Taulman has enjoyed assisting individuals from professional money managers to private investors with their needs in relation to implementing this investment approach on a daily basis in the current marketplace. Each Sunday you could hear him deliver his weekly market report as part of the “Your Money Matters” radio program on ABC and CBS radio networks. _________________________________________________ Disclaimer: James Taulman is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The independent contractors and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company’s website, or in its publications, are made as of the date stated and are subject to change without notice. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company’s products (collectively, the “Information”) are provided for informational and educational purposes only and should not be construed as investment advice.