Stocks Rally On Solid Earnings & Economic Data

Wednesday, October 13, 2010
Stock Market Commentary:

Stocks rallied after the latest round of stronger than expected earnings and economic data hit the wires. Volume patterns remain healthy as the major averages continue marching higher. Healthy volume patterns are important because they suggest large institutional investors are aggressively buying, not selling, stocks.   It is also encouraging to see, market internals remain healthy evidenced by an upward sloping Advance/Decline line and the fact that new 52-week highs continue to easily outnumber new 52-week lows on both exchanges.
The rally began overnight when Japan reported machinery orders surged +10.1% compared to a -4.5% decline forecast. More stronger than expected economic data was released in the US when import prices fell in September, reflecting a drop in energy prices. The -0.3% decline in the import-price index topped the median forecast and followed a +0.6% gain in August. Earnings news also topped estimates with companies such as CSX Corp (CSX), Intel Inc. (INTL), and JPMorgan Chase (JPM) releasing their Q3 results. The fact that the market rallied on the news bodes well for this 7-week rally.

Market Action- Confirmed Rally:

So far, the action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been very strong and stocks are simply pausing to consolidate their recent gains. It was encouraging to see the bulls show up and defend support (formerly resistance) in recent weeks. The next level of support for the major averages is their September highs, then their respective 200-day moving average (DMA) lines while the next level of resistance is their respective April highs. Trade accordingly.

Market Technicians Association
Charity Auction
: Take An Analyst To Lunch- Adam Sarhan

Nasdaq 100 Is Forming A Very Bullish Pattern (Updated)



This article was first published on September 26, 2010 (Click here for Full Story). The Chart Has been updated & as of this writing, the NDX is currently testing its Neckline!

Technical Analysis:

The tech-heavy Nasdaq 100 (NDX) is forming a very bullish two year inverse head and shoulders bottoming pattern. The accompanying annotated graph illustrates all the important events since the financial crisis began in 2007. It is very healthy to see that this index has nearly repaired all the damage of 2008 and is perched just below the neckline of its large base. It is also important to note that April 2010’s highs correspond with the highs in June 2008 which form the neckline of this pattern. Technically, a new buy signal will be triggered if the NDX manages to trade above the neckline (2060) of this very large pattern. Until then, this market is extended and patience is paramount.

Fundamental Analysis:

Fundamentally, the market is trading higher thanks to the ongoing global recovery, quantitative easing (QE 1 & 2), solid earnings, and a weaker dollar. As long as these factors remain at play, higher prices will likely follow. Trade accordingly.

Special Notice!
Advisory Services

Sarhan Consulting provides both global macro and equity only consulting services to institutional clients around the world. For years, its clientele has participated in the firm’s objective market-based outlook, which has one primary goal: to provide stable trading ideas across all asset classes.
Sarhan Capital’s consulting arm allows clients to participate in the idea generation process and be privy to many of Sarhan’s best ideas long before they are highlighted in other publications. In addition, clients receive objective feedback on their own ideas and are alerted each time Sarhan Capital traders buy and sell. Many institutional clients including hedge funds, private family offices, brokerages, registered investment advisers, and corporations, have turned to Sarhan Capital for personalized advisory/consulting services in recent years.

How We Can Help You:

  1. We employ a discretionary long/short global macro strategy that is profitable in both bull and bear markets.
  2. Achieve better results in the market by working with an objective third party who is not an internal “yes” man.
  3. Provide you with sound buy/sell ideas in real-time
  4. Provide objective feedback on your investment ideas and market outlook
  5. Contribute profitable ideas to your investment committee
  6. All investment ideas are fully transparent, unbiased, and based on market action, not someone’s opinion.
  7. Help create uniformed structure within your organization!

Contact Us Today To See How We Can Help You!

30 Stocks With Strong Technical Patterns

Monday, December 14, 2009

Market Overview:

The S&P 500 and Dow Jones Industrial Average closed at fresh 2009 highs on Monday. At this point, the major averages are just below important resistance levels for the year (Full commentary here) and appear poised to move higher. If they manage to close above their respective resistance levels on heavy volume then odds will favor a new leg higher will commence. That said, the above table is a list of 30 stocks that sport strong technical chart patterns.

Want More?

In-depth market analysis is available at our Store!
Consulating Services are also available for Institutional Investors- Click here