Trend indicators look good; sentiment, not so much
No surprise that the current weekly trend picture for the major market indices and sectors – with the notable exception of Semiconductors – remains up. While the trend and momentum suggest that the market will continue higher, sentiment indicators are beginning to caution that more and more participants are coming on board.
New positions
Wal-Mart Stores (WMT) – Last Wednesday I sold some November 47.5 calls against my long position in WMT (purchased 8/17/07) as the stock opened sharply higher after the company raised its quarterly earnings estimate:
The stock has bounced off the bottom of its long-term trend channel and is currently in a short- and intermediate-term uptrend. Overhead resistance at the 48-1/2 to 50 level may keep the stock within a 45 – 50 trading range for a while.
Watchlists
New and returning “upside strength” candidates of interest this week include Ameren (AEE), Amgen (AMGN)*, Anheuser Busch (BUD), Apollo Group (APOL), General Motors (GM), Illinois Tool Works (ITW), Kroger (KR), Molson Coors (TAP), Peabody Energy (BTU), sanofi-aventis (SNY), Western Digital Corp. (WDC), and Yum Brands (YUM).
New beaten-down “oversold” candidates this week include Acxiom Corp. (ACXM), Avery Dennison (AVY), Bemis (BMS), Benchmark Electronics (BHE), Brunswick Corp. (BC), Kenneth Cole Productions (KCP), Liz Claiborne (LIZ), Masco (MAS), Oxford Industries (OXM), Precision Drilling (PDS), Toyota Motor (TM), Watsco (WSO), and YRC Worldwide (YRCW).
* I currently own and/or have an options position on this stock.
