May 17, 2022

SUN 12/9: Market Runs into Solid Resistance – 2 New Watch Additions

 This Week’s Sunday Stock Report – 12/9/18

– 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.


2 BreakOuts This Past Week | 4 Stocks on Our WatchList for the Week


Drama remained high on Wall Street this past week as there were hopes of a resolution to the trade war with China, then the arrest of a Chinese executive, all while the Dow was making 1000 point swings.

Recent rally hopes were destroyed as the major averages turned again volatile and negative.

We started the week off strong, and on the heels of a solid previous week where we had a “follow through day” in the market on Wednesday, then more bullish action on last Friday.

First thing, Monday morning, the major averages opened with a gap higher. This quickly put the Dow and the S&P 500 just above our noted technical points of resistance of their respective moving averages.

However, the gains and the bullish optimism wound up being very short-lived as on Tuesday we had another fierce sell off. Seems there was some confusion over the terms of a deal that was struck over the weekend between China and the United States. Main-stream investors have been closely monitoring the trade conflict between the U.S. and China while looking for the Fed to back off from its tightening bias.

The exchanges were closed on Wednesday which gave many of us a needed pause.

The ride continued with another, although less severe,  gap lower on Thursday morning followed by continued declines before a positive reversal took hold mid-day. The Nasdaq made a 200 point run and actually closed with a gain on the session.

The indices looked poised to continue higher for Friday morning, however, stocks resumed their sell-off following a weaker-than-expected jobs report.

It became the biggest weekly percentage decline for all three benchmarks since March, while also marking the worst start to a December since 2008, according to Dow Jones Market Data.

As we can see on the charts below, the Dow Jones shot up right to our chart-noted resistance, and remained in its previously noted longer-term downtrend losing -4.5% on the week.

Chart courtesy of

The Nasdaq shed another -4.9% on a weekly basis, and fell back into its downward channel.

Chart courtesy of

The S&P 500 index lost -4.6% this past week as the benchmark pulled back from near previously noted resistance of its moving averages.

Chart courtesy of

We called the caveats in this latest rally last week with – “…let’s keep in mind that there is still a good deal of overhead supply – leftover from the recent selloff, and several points of resistance for us to watch. Two out of three of the major averages are below their respective 50- and 200-day moving averages – with only the Dow being above its 200 DMA.”

Based on the environment and noted technical concerns with the major averages I said – “We will let our breakouts continue to be our guide.”

From our watch list last week of 4 high-ranked stocks, we had
breakouts this past week.

As I say – you should always maintain a watch list of high-ranked leader which are setting up in bullish technical bases. This weekend, I ran my routine stock screens and added 2 new stock to our watch list.

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



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