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Tom Aspray, professional trader and analyst was originally trained as a biochemist but began using his computer expertise to analyze the financial markets in the early 1980s. Mr. Aspray has written widely on technical analysis and has given over 60 presentations around the world. Many of the... More
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  • 4 All-Weather Picks Approaching Support 1 comment
    Apr 16, 2014 4:52 AM | about stocks: CELG, CTRX, DIA, LULU, IPGP, GILD

    All of the major market averages, except the NYSE Composite, closed last week below their quarterly pivot levels. The PowerShares QQQ Trust (QQQ) had closed below its quarterly pivot a week earlier, on April 4, and is now close to the quarterly projected pivot support at $83.53.

    Last Friday's review of the market's corrections in 2010, 2011, and 2012 revealed that they coincided with overly-pessimistic views of the economy or markets. The current concern seems to be focused on, what is expected to be, a weak earning's season. The positive long-term readings from the NYSE Advance/Decline identified that these corrections would ultimately lead to a good buying opportunity.

    That is also the case this time, but stronger sells signal are possible this week that would indicate that the current decline has further to go and will last longer. The growing tensions in the Ukraine do add a further "real" concern to the markets over the near term.

    The European markets were hit in early trading, before rebounding, and the US futures are now in positive territory. Many are watching the 1800 level in the S&P 500 which, if broken, could signal a decline to the 1770 area. However, a rally is likely below these stronger levels of support and could be tested.

    The improving relative performance of the SPDR Dow Industrials (DIA) indicates that some large-cap stocks should be on your buy list during the market correction, but what other stocks look attractive?

     


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    In the March 21 weekend edition of the WSJ, Mark Hulbert highlighted these six stocks in his article "Stock Picks From Intrepid Advisers." The table also included their current P/E, as well as their projected three-five year earnings. A technical review of these stocks revealed that four are approaching important levels of support, so investors should now be watching them.

     


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    Chart Analysis: Catamaran Corp. (CTRX) is an $8.03 billion technology software company that specializes in providing pharmacy and healthcare benefits' software.

    • The stock peaked last August at $58.73 and is now down 33.8% from its high.
    • The weekly chart shows major support, line a, from the 2011 high, is at $33.70.
    • The uptrend from the 2010 and 2011 lows is a bit lower at $32.60.
    • The quarterly projected pivot support at $38.44 was tested last week as the weekly starc- band was also reached.
    • The weekly relative performance is below its WMA and is still in a downtrend, line c.
    • The RS line is now getting closer to its long-term support at line d.
    • The OBV broke below support last summer but is now getting close to major breakout support, line f, from early 2012.
    • The OBV is still in a clear downtrend (line e) and the daily OBV shows no signs of bottoming.
    • There is initial resistance now in the $42-$44 area.

    IPG Photonics (IPGP) is a $3.84 billion dollar developer and manufacturer of fiber lasers that are used in the semiconductor industry. The stock was actually up just over 1% last Friday.

    • The weekly chart shows that it overcame resistance, line g, last November.
    • The quarterly pivot is at $70.73 with a seven week low at $66.17.
    • The former downtrend at $64.74 now represents stronger support.
    • The longer term uptrend, line h, and the weekly starc - band are in the $60.70 area.
    • The relative performance is above its WMA and shows a solid uptrend, line j.
    • A move in the RS line above resistance (line i) would be very positive.
    • The on-balance volume (OBV) closed the week below its WMA but is still above long-term support at line k.
    • The daily OBV (not shown) does look much stronger as it is rising and above its WMA.
    • There is resistance now in the $75.75-$76 area.

    NEXT PAGE: 2 More Large-Caps to Watch

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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  • vireoman
    , contributor
    Comments (866) | Send Message
     
    Taking comfort in the contrarian signal that there is virtually no interest in CTRX on Seeking Alpha, I'm a buyer at current prices. I've done well with competitor ESRX and see no reason I won't do as well with this company.
    20 Apr, 11:22 AM Reply Like
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