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[Previous entry: "Fibmaster's Daily Update"] [Main Index] [Next entry: "ALKS Exit for -.56, 4.8%"]

10/04/2004 Archived Entry: "Fibmaster's Daily Update"

Sector Update:
IYR = real-estate ETF
Sept 15th - Possible double-top on the weekly chart. Daily chart turning down now. Bears look out for support at $106.00 and even stronger support at $102.50
Sept 20th - Those support levels are still valid. We really need to see the 106.00 level break for this to be a top. Until then, this chart is still in rally mode (daily) or at worst consolidation mode.
Sept 23rd - Looking like consolidation for now. If $106 support breaks, we have a top and permission to short rallies.
Sept 28 - No change in my outlook. If 106 breaks, then short down to 102 area is the play.
Update Oct 4 That support held at $106, and IYR is headed back towards the prior high of 111 approx. Watch that high area for possible resistance. Above there, bulls may buy dips. Bears will be looking to short on signs of resistance near the prior high.

IBB = NASD Biotech
Sept 15th - The biotech sector has rallied from the Aug 9th low of $61.22 to a recent high of $71.35. Why is this significant? This sector is now in a resistance zone! IBB has SK resistance on the daily chart at $70.30 to $70.94, so you bulls should look for profit exits on signs of resistance. The IBB weekly trend is up, but recovering from the March-04 to Aug-04 downtrend. The current resistance could stall this market in the near-term. Stocks to watch in this sector: Amgen Inc, Biogen Idec Inc, Teva Pharmaceutical Industries Ltd SPDR, Genzyme Corp-General Division, Gilead Sciences Inc, Chiron Corp.
Short term traders may consider scalping with the bears on signs of weakness.
Update Sept 20th - IBB has rallied a little above the $70.30/$70.94 resistance zone (say $71.00 approx), but can still fall back. The next higher resistance is $76.00 so bullish till there if the $71.00 resistance level doesn't hold.
Sept 23 - IBB issued a sell trigger on the daily chart yesterday. This gives traders permission to short rallies intra-day, and to look for short entries on longer time-frame swing charts. Intra-day scalpers will take profits on intra-day support. Swing traders, exit shorts if the daily chart triggers and exit, or can't remain below the SK resistance zone.
Sept 28 - IBB has intraday resistance at $69.75 today, for a possible short scalp entry. The daily chart is still in selling mode, down to support in the $67.50 to $68.25 area where we could see support.
Update Oct 4. IBB broke intraday resistance, and has reversed the daily down-trend, giving the bulls a chance. Bulls should watch out near $72.00 and $72.50 and then $74.25 for possible resistance.

XLF = SPDR Financial
Sept 20th - For DiNapoli pattern fans, the monthly XLF chart just completed a "bread and butter" or "B&B" pattern with a profit-objective of $29.18.. Where does it go from here? The Daily and weekly charts look week, with short-term support at about $28.50 for the scalping bears. Longer term there is support (weekly chart) at $26.75 and even stronger support down at $26.00 if it should get that low. If you prefer to trade the XLF components, look at Citigroup "C".
Sept 23 - The XLF chart has dropped to the first key support level on the daily chart at $28.50, so intraday bears should consider covering on signs of support. There is weekly support down at $26.75, but we will probably have a short-term rally before XLF can get that far down. Looking at the daily chart, I'd say that we want to short financial stocks on rallies to resistance. Where that resistance is can only be calculated once XLF finds some support and begins a mini-rally.
Sept 28 - The XLF daily chart is showing signs of support now, a little under the $28.50 projected area. A rally could give good shorting opportunities in the future, perhaps in the $28.75area (valid only if current levels hold for support).
Update Oct 4. Did that support hold or what??? I hope you bears bailed out at $28.50 ! look at it now, popped up to $29.26 so far. Even with this bounce, this chart is not very bullish. The $29.50 level looks like a probable resistance area again. Only above there does XLF get really bullish.

SMH = Semiconductor Holders Trust
Sept 23 - This sector has been ruled by bears since January this year, where it topped out at about $45.00.. There is some hope, for those poor "buy-and-hold" investors, but it's not that great.. The weekly chart for SMH has some support at $27.75/$28.25, so we may see some buying at those levels.
I'm not too optimistic though. There is a huge down-sloping channel on the weekly chart, with a bottom currently at about $27.75 and a top at about $34.25. In addition, the weekly chart has significant resistance at the $35.00 level (SK resistance). So the upside is at about $35.00 on my chart.
That gives enough room for near-term traders to take a respectable profit, but not for the sector to recover. I would not be surprised to see this chart consolidate in the $27.75 area to $35.00 area. This is a longer term weekly chart. So intra-day and on an end-of-day chart there are profit opportunities in that range of $27.75 to $35.00. Suggestion: Look to buy semiconductor stocks when SMH is near the lower level $27.75, and look for shorting opportunities near the upper boundary $35.00.
Sept 28 - SMH didn't rally much, and looks like it could get to support at $27.75 or a little higher. Not much trading opportunity yet.
Update Oct 4. That support at $27.78 held, and the bulls are rallying a bit. The Sept 23 comments about resistance, especially the $35 area are still valid. Could be some good shorting setting up in the future!

Neal Hughes, FibMaster at http://www.FibMarkets.com, is a widely respected expert on Fibonacci Analysis. Neal has been in the markets for over 20 years, and has distilled what he has learned into a complete trading methodology that maximizes gains and controls risk which he publishes in his newsletter, ProfitPoint. He is also the author of several universally acclaimed Video Seminars on his website. For those new to Fibonacci analysis, Neal provides FREE Fibonacci lessons, available here: http://www.fibmarkets.com/cgi-local/aefs/signup.cgi
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