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DAILY STOCK NEWSLETTER
Written 08/11/08 for 08/12/08
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Today’s Top Stock Chart
http://www.profittrading.com

Today’s Top Stock Picks
http://www.profittrading.com

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The 40 day moving average shows the S&P 500 is in a downtrend
and should be strong resistance for this rally.

If the S&P breaks thru the 40 day moving average
then a larger rally could develop,
but for right now I am expecting the 40 day to hold as resistance
and the market to break lower from here.

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I was just looking over the stocks we are short in the Premium Stock Newsletter
and we are in good shape if a move lower does develop as expected.

If you are a stock trader looking for some great trades
you really should give The Premium Stock Newsletter a try!!

http://www.profittrading.com/dsn.htm

Thanks !
Jim

The price of the Premium Newsletter increases to $99.00 a month September 1

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Here are some stocks we’ll be looking to go short
in the Premium Stock Newsletter
if the market breaks lower from here.

FLS
CF
MCF
BOLT
BTE
OMG
JAVA
IAG
TESO
GS

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COMMENTARY

Stocks finished higher Monday, but well off the best levels of the session.

According to preliminary data, the Nasdaq gained 1.1%, ending just above its 200-day moving average. The S&P 500 rose 0.7%, reclaiming its 50-day line and the 1300 level. Meanwhile, the Dow and NYSE composite climbed 0.4% each.

Volume rose slightly on both exchanges.

The major stock indexes pared gains after crude oil finished down 75 cents to $114.45 a barrel, off session lows of $112.72. News of tighter lending restrictions from banks also contributed to the pullback.

Monolithic Power Systems (MPWR) charged up 2.08, or 8%, to 27.91 on over triple its average volume. It cleared a 27.60 buy point from a cup base. The chipmaker ranks No. 19 in this week’s IBD 100.

Other chip issues fared well too. The Philadelphia semiconductor index climbed 1.9%, extending its win streak to six sessions.

Amazon.com (AMZN) zoomed up 7.58, or 9%, to 88.09 on volume. Citigroup doubled its sales forecast for the Internet retailer’s Kindle book reading device. The broker now sees 380,000 units being sold — the same number of iPods that Apple (AAPL) sold in its first year.

FTI Consulting (FCN) climbed 4.36 to 74.05 in heavy trading. During the session, it emerged from last week’s test of its 10-week moving average. The stock also cleared a 74.11 buy point from a three-weeks-tight pattern, though this formation usually forms after a breakout.

NetEase.com (NTES) rose 0.56 to 22.81 in wild trade. The Chinese provider of Internet gaming and content service had a big change of heart after falling 6% within the first 30 minutes of trade.

On the downside, past leaders got whacked.

Potash Corp. of Saskatchewan (POT) tumbled 10.60, or 6%, to 160.91 in busy trade. It sliced its 200-day moving average and closed below the line for the first time in over two years. The stock has lost one-third of its value since its June 19 peak.

U.S. Steel (X) dropped 9.24, or 7%, to 128.46 in heavy trading. The steel maker sliced its 200-day line.

Stocks pulled back from new highs in afternoon trading Monday after crude oil pared some losses.

At 2:43 p.m. EDT, the Nasdaq was up 1%, down from 2% at session highs. The S&P 500 gained 0.5%, the Dow 0.3% and the NYSE composite 0.2%.

Volume has turned higher on both exchanges.

Crude oil settled at $114.50 a barrel, down 70 cents. It fell as low as $112.72 a barrel.

Apparel stocks put on a show.

Warnaco (WRNC) climbed 1.43 to 52.23 in busy trading. The maker of Speedo swimwear and Calvin Klein jeans cleared a 51.32 buy point from a lopsided base. Volume was tracking about 80% above average.

Urban Outfitters (URBN) reversed earlier losses, gaining 0.70 to 36.29. But it slipped from a record high of 37.09. The retailer got hit with two downgrades earlier. The stock cleared a 34.27 buy point from a double-bottom with handle Friday. It also passed the middle of the “W” at a slightly higher buy point the same day.

True Religion Apparel (TRLG) rallied 2.35, or 9%, to an all-time high of 31.21. The maker of high-end jeans was on pace for its fifth straight heavy-volume gain.

On the downside, metal and oil stocks again continued to sell off.

Tenaris (TS) dropped 4.03, or 7%, to 50.33 in heavy trading. That sliced the steel maker’s 200-day moving average. The stock has lost about one-third of its value since its June 30 peak.

Continental Resources (CLR) fell 3.11 to 41.72 in fast trade. The oil and gas producer has plunged 50% since its July high. Meanwhile, Fluor (FLR) fell 0.88 to 75.44 ahead of its earnings after the close. Analysts expect the engineering firm to earn 82 cents a share, up 55% from a year ago.

A rebound in crude oil turned sour Monday, helping the major stock indexes to pack on more gains by midday.

At 12:40 p.m. EDT, the Nasdaq outshined, rising 1.4%. The tech-heavy index also punched above its 200-day moving average.

The S&P 500 rallied 1%. It cleared the 1300 level and regained its 50-day line. Meanwhile, the Dow and NYSE composite rose 0.7% and 0.6%, respectively.

Advancers led decliners by over 2-to-1 on the Nasdaq and nearly 2-to-1 on the NYSE. But turnover was tracking lower on both exchanges.

Crude oil reversed early gains, falling $1.95 to $113.25.

Stanley (SXE) rallied 1.64, or 5%, to an eight-month high of 37.70 in active trading. That puts the government contractor 6% past a 35.60 buy point from a cup-with-handle pattern.

Salesforce.com (CRM) rose 0.61 to 70.20 in fast trade. It regained its 50-day line in heavy trading Friday. The business software maker reports earnings Aug. 20. Analysts expect a fourth straight quarter of triple-digit growth. Views are for 8 cents a share, up 167%.

Quality Systems (QSII) jumped 2.14, or 6%, to a 52-week high of 39.94. It extended Friday’s 13% gain. The company makes information systems for the medical industries. Its earnings growth accelerated in recent periods.

On the downside, Baidu.com (BIDU) tumbled 14.27 to 304.99 in fast trade. It slumped further south of its 200-day moving average. Aside from a 16% surge in nearly twice its normal trade on July 24, heavy-volume gains have been scarce.

Mosaic (MOS) dropped 6.64 to 97.78 in brisk trade. On Friday, the fertilizer maker closed below its 200-day line for the first time in over two years. The stock’s Accumulation/Distribution Rating has degraded to E from A in June.

Indexes ran in place in mixed trading at midday Monday.

Some semiconductor and other technology issues were higher, while oil prices hovered slightly higher and commodities were mixed.

The Nasdaq composite continued to lead with a 0.4% gain at 10:57 a.m. EDT. The S&P 500 rose 0.1%, while the Dow slipped 0.2% and the NYSE composite remained unchanged.

Volume was a fraction lower on the NYSE and 10% higher on the Nasdaq. More than 60% of IBD’s 197 industry groups had moved higher so far in the session.

Oil prices edged up but remained below $116 a barrel. Other commodities were mixed as the dollar eased after Friday’s solid gain. Gold and copper prices slipped; natural gas and corn moved higher.

Amazon.com (AMZN) surfed 6.20 higher to 86.71. The move punched the online retailer’s shares above resistance around 85 in powerful volume. The stock was still 15% below its October high.

Almost Family (AFAM) adopted a 2.53 advance to 44.30. If it holds, it will be the in-home nursing services provider’s fifth straight advance. Shares were 62% above a buy point of 27.42.

FTI Consulting (FCN) added 2.69 to 72.38. Shares continued to consolidate in the fourth week of what could be a pullback or a soon-to-be flat base.

CF Industries (CF) suffered a 6.38 loss to 128.26. The tumble left shares near their 40-week moving average and at their lowest mark since May.

Overseas, China’s markets continued the dive begun last week. The Shanghai composite dove to a 20-month low after data showed another jump in consumer prices and a Goldman Sachs report said the Olympics would slow the country’s economy. Hong Kong’s Hang Seng index ticked a fraction lower.

The Nikkei 225 in Tokyo jumped 2% on a stronger dollar and lower oil prices.

In Europe and the U.K., stocks traded generally higher in afternoon action. London’s FTSE 100 perked up 0.9%. The CAC-40 in Paris added 0.6%.

Stocks opened lower Monday, but later turned mixed as crude oil retreated from earlier highs.

At 10 a.m. EDT, the Nasdaq was up 0.2% and the S&P 500 0.1%. The Dow slipped 0.1%, while the NYSE composite was mostly unchanged.

Volume was tracking slightly lower across the board.

Crude rose 25 cents to $115.45 a barrel. It traded as high as $116.90 a barrel earlier.

Fuel Systems Solutions (FSYS) fell 3.46 to 50.32 in fast trade, pulling back after Friday’s 29% surge. The Santa Ana, Calif.-based company makes alternative fuel systems and components.

Houston Wire & Cable (HWCC) fell 0.78 to 20 on cost concerns. Before the open, the company posted Q2 results in line with views, but its gross margin dropped to 24.9% vs. 26.6% a year earlier.

On the upside, Apple (AAPL) gained 1.41 to 170.96 in active trading. The iPod maker is nearing its 50-day moving average. It found resistance at the line last month.

Monolithic Power Systems (MPWR) rose 1.44 to 27.19 in heavy trading. The chipmaker is closing in on a 27.60 buy point from a cup base. I has already traded over half of its 50-day average volume. The stock is No. 19 in this week’s IBD 100.

Stocks futures pointed to a lower start for equities Monday, as crude oil bounced back from recent lows. Nasdaq futures fell 4 points vs. fair value, S&P 500 futures lost 3 points and Dow futures dropped 35 points.

Crude rose 65 cents to $115.85 a barrel on worries that fighting between Russia and Georgia could lead to supply disruptions. Still, oil prices are down about $30 from its July 11 peak.

On the M&A front, Waste Management (WMI) raised its hostile bid for rival Republic Services (RSG) to $37 a share, or about $6.73 billion. It offered $34 a share, or $6.19 billion last month. Shares of Republic gained about 2% in the pre-market.

In another deal, JDA Software Group (JDAS) said it would buy i2 Technologies (ITWO) for $346 million in cash. Shares of i2 rose 2% in the pre-market.

Meanwhile, Petrohawk Energy (HK) tumbled 8% in the pre-market on news of a share offering. The oil and natural gas producer said it will sell 25 million common shares to help repay debt and for general corporate purposes. Shares of Petrohawk have tumbled about 50% off their recent high.

Urban Outfitters (URBN) fell 3% in the pre-open after Roth Capital cut the retailer to hold from buy. Urban reports earnings on Thursday. Views are for 30 cents a share, up 58% from the prior year.

AgFeed Industries (FEED) surged 22% after it smashed views and raised guidance. The Chinese animal feed and hog producer posted Q2 earnings of 27 cents a share, up from 5 cents the prior year and a dime above views. Sales rose more than five-fold to $35.6 million. AgFeed pegged full-year profit at $1.08 to $1.20 a share vs. views of 95 cents. Revenue is expected at $145 million to $155 million vs. views of $136.9 million.

No economic reports are scheduled for today. Key data due later on this week are Wednesday’s retail sales report and Thursday’s consumer price index.

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THANKS!
Jim

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