Blain’s Nightly Stock Picks, March 24 2008
Posted by Blain Reinkensmeyer
March 24, 2008 at 6:11 pm
A big day for the markets as news of JP Morgan raising its bid for Bear Stearns to $10 a share had the market giddy. As predicted techs lead the way with the NASDAQ racing ahead 3% on the session.
Immediate concern is addressed with the overall volume, which was completely lackluster. The NASDAQ didn’t even post avg volume, and the S&P 500 missed the avg mark by a mile. We may be seeing a short term rally, but long term sustainability is bleak.
Last night I gave evidence of a market ready to rally technically, and called for the upside to be seen. I would proceed with caution. Consumer confidence is due out tomorrow morning which could halt this rally dead in its tracks, and even with positive results we have yet to see institutions step up to the plate and truly back this latest move.
I commented yesterday on tech leading any rally stating, “A lot of articles and interviews I’ve seen since late last week suggest big tech will be at the forefront of any upswing. Keep an eye on the likes of Google, Apple, IBM, CSCO, etc. this week.”
Thus the focus tonight is on tech, which did in fact lead the rally today. I think there is room to play some of these stocks to the upside, just be ready to take profits quickly and move to cash when necessary.
NASDAQ Composite
S&P 500 (SPY)
Baidu.com (BIDU)
BIDU broke down technically when it hit resistance at the 50 MA and then crashed below the key $225 level. Any rally at this point is merely another opportunity to enter a long short position. Personally I think a move to $260ish would make for a great entry.
Apple (AAPL)
You can’t fight the trend, and Apple had a nice move today breaking through its 50 day moving average resistance. Next stop is the gap range from January 23rd. Also look for resistance at the 200 MA which isn’t shown but lies at $148ish.
Google (GOOG)
Priceline.com (PCLN)
Good volume today suggests even though the stock stalled at new highs it may push past them in the near future.
Intuitive Surgical (ISRG)
Research in Motion (RIMM)
A nice building here for RIMM suggests higher prices in the short term. The lower volume though is just depressing.
GDX
This ETF which tracks the gold miners index basically represents your gold high fliers such as AUY, GOLD, GG, ABX, BVN, etc.
Even though we have seen quite a sell off here, I wouldn’t rule gold out of the long term picture just yet. A 20% correction would bring this ETF to its 200 day moving average, a convenient place to find strong support. I may try a few if we see this support area tested.
See you tomorrow morning.
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