This Week’s Sunday Stock Report – 11/11/18

– James F. Taulman, former Editor-in-Chief of the first independently licensed website to offer stock reports and services based on the CAN SLIM® investment system.

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BreakOuts This Past Week | 5 Stocks on Our WatchList for the Week

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The major averages rallied for four consecutive sessions this past week, then each sold off sharply on Friday.

The Dow Jones fell -0.9% that day as the index struggled to hold above its 50-day line while the Nasdaq closed back below its 200-day moving average and lost -1.7% on the session.

Chart courtesy of stockcharts.com

Chart courtesy of stockcharts.com

The S&P 500 lost -1.1% during Friday’s sell off, yet managed to hold above its important 200 DMA.

A look at the chart of the S&P 500 and we can see that the index failed this week at the previous highs, before Friday’s more definitive push-back of that resistance.

Chart courtesy of stockcharts.com

For the week, all three main benchmarks did, however, post gains. The Dow increased +2.8%, the S&P 500 ended with a net gain of +2.1%, while the Nasdaq eked out a +0.7% gain.

The Russell 2000 was down -2.4% during Friday’s session. Technicians would point out that the small cap index could see a so-called death cross manifest with a possible 50 DMA and 200 DMA convergence, should the current downtrend continue.

More importantly – on Wednesday, we had a Day 7 follow-through with the bullish action in the session confirming a – by the book – uptrend. We also had an increase mid-week in the number of stocks breaking out from our watch list, which was another good accompany sign. However, Friday’s negative broader-market action, dealt a serious blow to the recently confirmed uptrend.

There was also higher volume on Friday which shows that institutional investors were selling into the week’s rally. Heavy-volume selling that early into a newly confirmed uptrend is not a good sign.

Friday’s selloff has us starting next week’s trading in a somewhat defensive stance on Monday morning. We need to closely watch our still fledgling individual breakouts. (more specifics on those below)

I ran my full stock screens over the weekend, yet only found one new stock to add to our watch list for the week. Somewhat odd for the start of a new rally….

We now have a total of stocks which we will be watching for a potential breakout. (see below)

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