Some caution signs, but market, tech stocks still positive
The trend picture remains positive overall for the major market indices and sectors, with only minor negative trends (so far) creeping into the DJIA, S&P 500, and Hong Kong indices, as well as the Financial and Healthcare sectors. One especially positive note is that the technology sector, including semiconductors, may finally be kicking into gear.
Possible negatives include signs of slowing upside momentum in the major indices – which could portend an increased possibility of a near- or intermediate-term correction. Another concern is that put/call ratios – a commonly followed sentiment indicator – are currently negative, according to The Option Strategist.
New positions
Alcoa (AA) – On Thursday I sold some March 35 puts on AA during an intraday dip:
The stock has clearly been a strong performer lately, no doubt helped by recent takeover rumors. Downside support appears to be about 32-1/2 to 33-1/2, while upside resistance appears to be in the 35-1/2 to 36-1/2 area.
International Paper (IP) – On Wednesday I sold some March 37.5 puts on IP during an intraday sell-off:
The stock has been doing well lately after the company recently reported better-than-expected fourth-quarter profits. Downside support looks to be about 35 to 35-1/2, and upside resistance appears to be at about the 38 and 40 price levels.
Oshkosh Truck (OSK) – On Tuesday I sold some March 55 puts on OSK during an intraday dip:
The stock has been doing well lately and appears to likely have further to go over the intermediate term. Downside support appears to be about 55 and 52-53, while upside resistance appears to be at about the 58 and 60 price levels.
Watchlists
New “upside strength” candidates this week include Allied Waste (AW), Analog Devices (ADI), Andersons (ANDE), Brinker International (EAT), Cabela’s (CAB), Centerpoint Energy (CNP), CKE Restaurants (CKR), Dollar Tree Stores (DLTR), J. M. Smucker (SJM), Longs Drug Stores (LDG), Lowes (LOW), Oakley (OO), Packaging Corporation of America (PKG), Toro (TTC), Tupperware (TUP), and Werner Enterprises (WERN).
The only new addition to my “oversold” watchlist this week is Constellation Brands (STZ).
