U.S. stocks closed with marginal gains once again on Monday, continuing the pattern in place since last Wednesday. The overall trading pattern during the day has been repeated for a few days now...weakness in the morning due to ongoing European issues, and a very modest rally beginning after the European close.
The trading patterns are somewhat mixed...the Dow and S&P 500 look like they are ready to explode upward, while the Nasdaq and small cap averages are more mixed.
One stock I definitely do not like now is Google. Google had broken out recently to 52 week highs, with a nice basing pattern going back about one year. Today, it closed down over 4%, and formed an island reversal pattern in the process, due to the gap down. It closed below its 34 day EMA for the first time since late November. If there is follow through, expect some weakness in the NASDAQ.
Biotechs lead the way upward today, lead by Inhibitex, which is being bought out. It was up 140% today...yes, 140%!
We had a couple stocks on our watchlist that resulted in new buy signals. SPPI and MDVN both broke through their buy points today.
Scott Cole
www.whentobuyandsellstocks.com
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