Trend, sentiment indicators still positive
A still all-positive trend picture and a declining but not-yet-extreme put/call ratio point to a still-intact intermediate-term uptrend in the major U.S. stock indices. Certainly many stocks are “stretched” here and could correct at any time, but until the intermediate-term trend and sentiment indicators suggest otherwise, I’ll continue to view sell-offs as buying – i.e., put selling – opportunities.
Near-term upside resistance levels that I’ll be keeping an eye on are 1510-1520 and 1530 for the S&P 500, and 2590-2610 for the Nasdaq. Near-term downside support levels appear to be about 1490 and 1470-1475 (S&P 500); 2530 and 2500-2510 (Nasdaq); 860 and ~845 (Russell 3000); and 13,000, 12,900, and 12,800 (DJIA).
New positions
No new positions this week. On the put side, the modest sell-off early last week wasn’t enough to trigger any of my pre-opening limit orders to sell puts. And on the call side I’m still waiting to see if the market offers some better opportunities at higher prices to sell covered calls against some of my long stock positions (such as Alcoa (AA) and General Electric (GE)).
Watchlists
Some new stocks (and re-additions) that caught my eye in this week’s “upside strength” scans include Aetna (AET), American International Group (AIG), Bristol Myers Squibb (BMY), Federal National Mortgage Association (FNM), Cambrex (CBM), General Electric (GE)*, K2 (KTO), McKesson (MCK), MeadWestvaco (MWV), Microchip Technology (MCHP), Mueller Industries (MLI), Olin Corp. (OLN), Orbital Sciences (ORB), Park Electrochemical (PKE), Pfizer (PFE), SK Telecom (SKM), Statoil ASA (STO), St. Jude Medical (STJ), Tribune (TRB), UAP Holdings (UAPH), Universal Health Services (UHS), and Watsco (WSO).
New stocks of interest in this week’s “oversold” scans include Avery Dennison (AVY), Circuit City (CC), Gevity HR (GVHR), OfficeMax (OMX), and Omnicare (OCR).
* I currently own and/or have an options position on this stock.
