Closing Technical Market Comments for Mon Apr 30, 2007
Definitive Down Day
By Harry Boxer, TheTechTrader.com (www.thetechtrader.com)
The indices had a definitive down day to start the week and a nasty one at that, especially in the last couple hours when the sell-off accelerated. But the day started out with a move lower, a rally back, and a narrowing, coiling wedge-type pattern. By mid-afternoon when they started those patterns out to the downside and breaking their intraday rising bottoms lines, the indices then accelerated to the downside, taking out the morning lows and then selling off hard into the close.
Net on the day the Dow was down 58, the S&P 500 11 3/4, the Nasdaq 100 23.31, and the Philadelphia Semiconductor Index (SOXX) down 5.73.
The technicals were definitely confirming, with advance-declines 3 to 1 negative on New York and about 2 ½ to 1 on Nasdaq. Up/down volume was even worse, about 4 to 1 negative on New York on total volume of about 1.7 billion. Nasdaq traded 2.1 billion, with a more than 5 to 1 negative ratio.
TheTechTrader.com board was mixed, with several point-plus losers. They were led by Sigma Designs (SIGM), which got downgraded and lost 3.33 on 3.7 million shares and broke through the neckline of a head-and-shoulders topping formation. Very negative action there.
Solar energy stocks got slammed today, with JA Solar (JASO) down 1.99 and Solar Fun Power (SOLF) down 1.28. Evergreen Solar (ESLR) was down 52 cents, and Energy Conversion Devices (ENER) was down 47 cents. Elsewhere,Dynamic Materials (BOOM) gave back 1.36, Force Protection (FRPT) down 1.11, Chindex (CHDX) 87 cents, the SMH down 46 cents and the Q’s (QQQQ) 61 cents.
On the plus side, the only point-plus gainer was Jones Soda (JSDA), which gained 1.57 on 5.6 million. Even that was about 1 ¼ off the high earlier in the session. DXP Enterprises (DXPE) snapped back 65 cents, and low-priced Avanir Pharmaceuticals (AVNR) was up 23 cents on 7 ½ million. FuelTek (FTEK) gained 55 cents, and Chart of the Week DG Fastchannel(DGIT) gained 23 cents.
Stepping back and reviewing the hourly chart patterns, the indices plunged below their rising 40-day moving averages and lateral price support, and accelerated lower late in the afternoon. It looks like this could be a trigger for additional downside price progress. But we’ll have to see how deep it gets. Consider short-term support on the NDX right now at around 1860, 1850, and 1840, the latter being a very important one.
The S&P 500 closed near 1482 support. Beneath that is short-term support at 1478 and then 1475.
Good trading!
Harry
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