Market uptrend still intact
All signs continue to suggest that the market’s current intermediate-turn uptrend has further to go. It would probably take a break below key near-term downside support levels – about 1490-1500 (S&P 500), 2630-2640 (Nasdaq), 13,500 (DJIA), and 865-870 (Russell 3000) – to change the current positive market trend picture.
New positions
Alcoa (AA) – Last Wednesday I sold some October 40 calls against my long position in AA (purchased 8/17/07) as the stock continued to rally from its severely oversold condition in the low 30s that it reached during the August sell off:
AA is in a clear short- and intermediate-term uptrend, and appears headed higher. If the stock can move above the 39-40 resistance level, a move to the 42 – 43 area seems likely. Near-term downside support is at 37 – 38.
Watchlists
New stocks of interest showing up on this week’s “upside strength” scans include 3M (MMM), China Telecom (CHA), Coca Cola (KO), Colgate Palmolive (CL), Cypress Semiconductor (CY), Ecolab (ECL), Intel (INTC), Olin Corp. (OLN), PepsiCo (PEP), Timken Company (TKR), Whole Foods Market (WFMI), Vodaphone (VOD), and Worthington Industries (WOR).
New candidates of interest on the “oversold” scans include Briggs & Stratton (BGG), Cardinal Health (CAH), Foot Locker (FL), Group 1 Automotive (GPI), Home Depot (HD), Office Depot (ODP), Staples (SPLS), SuperValu (SVU), Tektronix (TEK), Tellabs (TLAB), and Werner Enterprises (WERN).
