Harry Boxer, author of TheTechTrader.com (www.thetechtrader.com), selected Energy Conversion Devices (ENER) Monday after the close as his Chart of the Day. Harry describes the technical outlook for this stock:
ENER had a terrific session Monday after releasing their earnings. Although the stock opened down and bounced and then made a lower low at 23.82, after the conference call the stock started to run, as apparently traders liked what they heard. It had a multi-wave advance that took it from 23.82 to about 27.33, a nice 3 1/2-point gain. It platformed and then jumped to a higher high, getting up over 29 to about 29.30, before pulling back and retesting and then coming on again late in the session.
Net on the day it gained 2.41 on 6.3 million, the heaviest volume on an up-day since last June. The stock had broken the declining tops line and declining channel in January, retested the Nov-Dec highs but couldn't get through, then retested the rising trendline, and then over the course of the last 4 months formed a nice, mini base and spiked up. As you can see from the chart, the volume increased in the last three sessions to the highest level in several months.
But there is overhead resistance, and what we need to watch now is the 30.30 range in this area. If we get a move over the next couple days and take that out, I can see it surging to my trading target in the 39 area, beyond that 45 and 51 as intermediate and longer-term targets. But certainly has more work to do, although the On-balance Volume and Money sSream are starting to surge. I'm optimistic that that could lead ot a break out of o this base pattern.
See Harry's Chart of the Day Video Analysis on ENER.
http://www.thetechtrader.com/info/charts/
Gary Dean, author of MarketsPath.com (www.marketspath.com), maintains the market must move lower before the much-anticipated rally:
As I type this report I have one ear listening to President Obama plead the need for the stimulus package. He is painting a pretty gloomy outlook, and even when it is passed, I am not so sure the Street will back the proposed plans. The Democrats already have enough votes to pass the bill, but they aren't getting any buy in from the Republicans on the proposed stimulus package. A plan that would have had both parties approving-would send a jolt of confidence throughout our economy. With the Republicans against the proposed stimulus package (for the most part) I do not believe the Street will take it very well either.
EVERYBODY is watching and eying the symmetrical triangle on the SPX, at the top of which is the 912 pivot. The "Herd" decided to jump in on the long side Monday when the SPX broke through Friday's highs and that 912 pivot started hitting the newswires. Monday's highs may very well have been the highs for this leg up. Even if it isn't, they will sell before the next leg up starts, most likely at the bottom! The "Smart Money" was kind of quiet on Monday, but did hit the tape pretty hard on the sell side when the indexes turned green. They have built up enough selling volume to take the tape lower . . . maybe much lower.
The reason for my thinking lower in the SPX -- and maybe much lower -- before higher is the fact that everybody is eying the same pattern and target of 912. Yes, that was my original target and it could still play out, but I see the 826 area being tested before it makes a run for that pivot. I wouldn't be surprised to see the bottom of the channel coming into play with this anticipated pullback . . . in the 790-770 area.
Jack Steiman, author of SwingTradeOnline.com (www.swingtradeonline.com), is more positive:
It was very interesting on Monday to watch stocks such as Baidu.com (BIDU) and especially General Electric (GE) get huge bids today. BIDU hasn't followed its brothers in rocking off the bottom. It has been lagging its pals Research in Motion (RIMM), Google (GOOG) and Apple (AAPL). Today it exploded. GE took out five red candle stocks in one days worth of action and did so on gargantuan volume. Normal 30- day volume is just shy 110 million shares. Monday, on the big up day, it did 232 million shares, more than 100 percent above average. It doesn't mean things are great, but if GE was only going to bounce for a day and move back down, it likely would have done so on much lighter volume. The volume on Monday suggests its down trend may be over for a little while and this too would be a positive for the market. You try to find the little things that may be talking to us all and I think the action in BIDU and GE do talk to us all. It's not saying go nuts and buy haphazardly. To me it is saying that weakness can be bought for now and again, only now.
The SPX made many attempts to get through its last 50 day moving average on Monday at 876. It tried and tried and wanted to join the Nasdaq in trading over the 50's but failed. All of the important indexes need to trade above the 50's for the market to be in far healthier technical shape. The SPX has to join in or the market will struggle. This is why it's such an important time. We're close and we're about to get the stimulus news and the SPX is going to have to show more guts than its been able to thus far. The Nasdaq leads and it's good to see it hold its 50's, but the SPX has not been able to get the job done thus far. With the banks/financials along with the transports and energy areas looking better technically, there is a real chance the SPX will be getting the job done shortly. Nothing is guaranteed, of course, but the weekly's are confirming the daily's and that's all you can ask for if you are leaning bullish. One day at a time. The next few days should be a blast.
Mike Paulenoff, author of MPTrader.com (www.mptrader.com), also gives the nod to the bulls:
During Obama's first prime-time press conference, the S&P 500 E-mini Futures pressed to -12 points and remained in relatively deep negative territory until about 6 am, when some shorts decided to cover ahead of today's government-sponsored festivities. I have no idea now all of this will work out, but based on the enclosed hourly chart pattern as long as the e-SPH holds above key near-term support between 851 and 848, I have to give the benefit of the doubt to the bulls.
That is, the pattern argues for another upleg that hurdles yesterday's recovery rally peak at 873.00 on the way to my next optimal target zone of 883-886. Only a sustained breach of 848.00 will indicate that Mr. Market is totally unconvinced about the efficacy of the Geither Plan and has decided to "sell the news."
