Hello, everyone. It’s Stephen Whiteside here from TheUpTrend.com. and in this presentation, we’re going to take a look at the Dow 30 stocks. You remember back in the middle of July, the VIX gave us a buy signal that told us that options traders were preparing for the market to move lower. You can see the huge spike we had on Monday.
And then the VIX has traded down throughout the week, closing at a low for the week on Friday. So on Monday, we’re looking for a close on the VIX below 19.73. That would give us an indication, the first indication, that options traders are getting more bullish about the market once again. Now, looking at the Dow 30 stocks, we currently have six on buy signals coming into Friday. We added two more on Friday at the close.
So coming into Monday, there’s eight Dow 30 stocks on buy signals. There’s currently 22 on sell signals. So that’s what the Dow 30 looks like right now. We traded up, filled the open gap after that big move down on Friday, last Friday, and then a big move down on Monday. Gap lower.
So 385 appears to be a big area of support at the moment. We’ll have to see how long that holds. But moving up, we closed in the channel. So anytime you close in the channel, you’ve got to be prepared for a new buy signal. If we can close above $400.12 on Monday, and of course, dollar 400 is a big round number, could act as potential resistance.
Now looking at the stocks that are currently on buy signals, none of them really performed that well on Friday. Kind of a weak close for most of these. Starting off with IBM, we had an inside day and a small pullback on Friday. Then looking at Coca Cola, again, we had an inside day and a very small pullback. Then looking at McDonald’s, McDonald’s trading back in the channel.
So anytime you close, you’re coming down and closing in the channel. There’s a mathematical possibility of a sell signal the next day. So looking for a close on Monday below $263.75 then looking at three m, we had an inside day. Three M has been stuck to the 125 level for a couple of weeks now. After gapping higher, that big move up.
And so here we are. If we can take out the recent high, then 137.50 comes into play. Otherwise, if we start moving down, if we take out this recent low, then 112.50 comes into play. If we take out that low, then a move down to dollar 100 and at least to fill the, the open gap would be expected. Then looking at Nike, Nike’s, on a second day of a buy signal, but I don’t think anybody cares.
I wouldn’t do anything unless I saw Nike start to close above the recent high from late July. At the same time, the trade would probably just be up to the bottom of that open gap. I don’t see it moving higher than that at this particular time. Now looking at Procter and Gamble inside day with a lower close, remember, these are the stocks that close that are still on buy signals on the Dow. Now looking at new buy signals from Friday, and they were very weak buy signals for both Caterpillar and Salesforce closing just above the upper channel line by pennies.
No real love there for those stocks, but they are technically back on buy signals. So I certainly wouldn’t get overly excited. And if I wanted to go long, I would take a small position and then add to it if the stock continues to move higher. Now there’s a huge list of stocks still waiting for buy signals. And again, I don’t care about them unless they’re closing in the channel.
And that is certainly the case for Apple looking for a close on Monday above $218.32. So yes, our next target is 225, but we’ve got an open gap there that hasn’t been filled yet, so they might try to fill it on Monday. Let’s hope they can fill it and move higher. That gap’s at $217.71. Then looking at Amgen closing right at the lower channel line.
No joy there. We saw Amazon trade up to the lower channel line, so nothing going on there. American Express and Financial seem to get a lot of love on Friday. Looking for a close above $241.60 on Monday to give us a buy signal. Nothing going on for Boeing.
Nothing going on for Cisco, Chevron. Nothing going on there. Then looking at Disney, Disney had an inside down Friday. Nothing going on there. Then looking at Dow, Dow has been trading in the channel for the past two days.
On Wednesday, it traded up right up to the upper channel line. This stock is still looking pretty ugly. Yeah, we probably put in a double bottom, but is that going to outweigh the series of lower highs and lower lows? I’m not sure, but that’s what it looks like right now. So on Monday, we’re looking for a close above $53.36 to give us a buy signal.
And I’d be more excited if it could break out above that downtrend line, and that certainly hasn’t happened yet. Now, as I mentioned, looked like a lot of love for financials on Friday. There’s Goldman Sachs trading right up to the upper channel line. So we’re looking for a close on Monday above $491.71. No joy for Home Depot closing below the lower channel line.
No joy for Honeywell on Friday. And certainly no joy for intel inside day on Friday. I’m sure Intel’s going to be removed from the dow at some point in the not so distant future. It is certainly underperforming the rest of the sector. JPMorgan, another financial stock, trading up.
I think it’s got a couple of pennies more to go before it fills that gap. And then we’re looking for a close on Monday above $207.32. No joy for Merck trading right up to the lower channel line. Similar situation for Microsoft on Friday. The travelers group in the channel.
Once again, technically we need a close above $213.98. Not a stock I’d really chase at the moment. You can see we’re basically right where we were back in early April. So nobody’s had any love for this stock in a few months back here. Yeah, that’s.
There was a low risk buying opportunity. We moved up, had a nice move up, got up to the $230 level and then retreated. And we’re still holding 200, which is acting as support. So we’re in a trading range between 200 and 230, and we’re below the middle of that trading range at the moment. Then looking at Visa, Visa is still a very ugly chart.
Series of lower highs. Lower lows. Is this a higher low? Well, only time will tell. On Monday, we’re looking for a close above $263.35.
So another financial stock, but certainly not looking as strong as the other financial stocks. Then Verizon. Verizon is technically back on a buy signal. I didn’t add this to that, the list of buy stocks, because again, it’s a very weak one. This is incredibly weak.
We’re looking for a close above $40.74. Nine. And we closed at $40.75. So a 10th of a cent above the upper channel line. So I would say that is an incredibly weak buy signal.
Then looking at Walmart. Walmart closing just above the lower channel line, looking for a close on Monday above $69.13. And Walmart has come down to the flypaper channel and found support once again. And this is the time and place where buyers would be buying the dip, looking to move it back up. And I would certainly be interested in buying Walmart if the buy signal shows up.
Now, one stock actually generated a sell signal on Friday, and that stock was United Healthcare. And there it is closing below the lower channel line on Friday. So that is a new daily sell signal. Okay, folks, that’s all for this presentation. That was quite a recovery off last Monday’s low.
The market gapped lower on Monday, made a low and has come back. The VIX made a high and has come down over the past couple of days. Are we going to see fall through to the upside this week? Well, we certainly need it because we only have a handful of Dow 30 stocks on buy signals right now. And for the market to have a sustainable trend higher, we need the majority of those stocks back on buy signals.
Enjoy the rest of your weekend. Next time you’ll hear my voice is actually later today.
Stephen Whiteside
TheUpTrend.com
Sunday, August 11, 2024
