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Top Stocks With Helene Meisler

I Want to Be Bullish, But . . .

By Helene Meisler | 04/16/15 - 06:20 PM EDT
Stocks in Focus: CRM, HTZ, CVX, CSX

The Market

I really want to be bullish because I think the S&P really wants to cross that line -- if for no other reason than when we get so close it can't help but do it. But I thought that at the lows, as well you might recall. At the lows, I wanted to break the line so we could whoosh down and then go up, but instead we sat there for days and then just rallied.

And quite frankly, there is no selling, so it does make sense that they try and rally 'em up through the line. But today we find yet another sentiment reading that's bothersome. The put/call ratio for ETFs was once again under 100%. At first I figured I'd see several instances of that, but that was not the case.

I had to go back nearly 18 months to find another time we had back-to-back readings under 100%. Unfortunately, it fell on the last day of December 2013 and the first trading day of 2014. It's not as though the market fell apart right away, but two weeks later it surely had quite a flush to the downside (circle on the chart). Prior to that, we did see four such days in a row leading up to Christmas Day, and the market continued to climb as you can see (box on the chart).

Prior to that, I had to go all the way back to 2012 when we saw back-to-back readings in mid-September. It's what I typically refer to as the Apple (AAPL) high because that was when Apple hit $700. The S&P, as you can see, did not fall apart right away, it hung in there for a month. But then it fell over 100 points.

The good news is that the moving averages of these various put/call ratios are still falling. Below, you can see the chart of the 10-day moving average of the put/call ratio, and it has even made a lower low. It's tough to say when it might turn back up (turning up is bearish for the market). My best guess is the middle of next week.

With Friday being options expiration, perhaps they can finally get the S&P up and over that line and the Russell to tag that line I drew in last night. But in order to get some real downside, we need to see some selling.

New Ideas

Salesforce.com (CRM) has actually done a decent job of consolidating its gap up from earnings in late February. If it can get up and over $70, that would not only clear the downtrend line but the two spike highs that have kept it in check.

Today's Indicator

The 10-day moving average of the put/call ratio is discussed above.

Q&A

Helene welcomes your questions about Top Stocks and her charting strategy and techniques. Please send an email directly to Helene with your questions. However, please remember that TheStreet.com Top Stocks is not intended to provide personalized investment advice. Email Helene here.

Hertz (HTZ) has saved itself once again, only this time I might actually like the chart. There is a ton of resistance as you can see between $21.50 and $22. But there is also a downtrend line. What if it gets through the downtrend line? It would be the first time all year, and therefore we'd have to consider that a positive, especially since the stock could not break on the downside. At the very least it should make a try for the $23 level, where it then runs into more resistance. But quite frankly, if it makes it over $22, it would be the first higher high, so it just changes the chart from negative to positive.

We looked at Chevron (CVX) a few weeks ago when it gapped down and looked like a cleanout near $101. It has been a nice run, although there are other oil names with better runs. I do think this $112 area will be tough to eat through on the first time up. If it can get through $112 on the first try and stay over it, that would be more than impressive. It would set up a much longer-term target in the mid-$120s, so let's see how it handles that level.

Right now, CSX (CSX) is trapped between a decent support uptrend line at $32 and resistance at $33. The issue is that the spikes both up and down have been so volatile, I have to believe weak holders were taken out on both sides of the aisle. Thus, if it went back up and over $33, we'd have to view these last few days as a shakeout. If it cannot get over $33 and turns down, then we'd look at a downside target around $27.

Regards, Helene Meisler

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